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Mining

The mining sector in Cambodia is mostly undeveloped, and active mining enterprises are typically small-scale quarries producing materials for construction, such as laterite, marble, granite, limestone, gravel and sand. There are also thousands of artisanal miners recovering gold and gemstones, often on a seasonal or part-time basis. There is no industrial-scale extraction of minerals yet, although many exploration licenses have been granted to mining companies and some have reported promising finds of gold.1 In September 2016, the first industrial mining license for gold was issued to a mining company working in Ratanakiri.2

The world museum of mining by Tjflex2 , taken on July 5, 2013. Creative common license: Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

The world museum of mining photo by Tjflex2 , taken on July 5, 2013.Under license: CC BY-NC-ND 2.0

Laos and Vietnam have large-scale extraction of minerals such as gold and copper. Civil war, the presence of land mines and unexploded ordnance, inadequate infrastructure and other issues have meant that Cambodia lags behind its neighbors. The sector also faces risks such as inadequate regulation and poor transparency.

Due to a lack of comprehensive geological surveys, the size of exploitable mineral resources in Cambodia is not clear, but in the past the Ministry of Industry, Mines and Energy (today the Ministry of Mines and Energy, MME) has stated that copper, gold, iron ore, zinc, lead, tin, bauxite, sapphire, ruby, kaolin and limestone are amongst the most prevalent resources.3

While many of the resources have hardly been touched, a few have been heavily exploited. Comparatively large quantities of rubies and sapphires were extracted around Pailin in the 1970s, for example, and few large stones are found today.4

Applications for a license should be submitted to MME.5 Licenses can only be issued if the applicant is commercially registered in Cambodia, and after a thorough consideration of the technical and financial capability of the applicant.6Further details of industrial mining regulations, artisanal mining and gemstone mining are covered in those pages.

Prospects for the future

Various stakeholders have raised concern that the regulatory framework for mining in Cambodia is not adequate to deal with the increase in activity that the sector may see in the future. In late 2015, for example, the Managing Director of Australian-based Geopacific Resources, which is exploring for gold in Cambodia, told an interviewer that legislation was the biggest stumbling block.7

Ministry of Mine and Energy(MME) is preparing new legislation modeled on the West Australian Mining Act. The proposed law would replace the existing contractual system for obtaining licenses with a concession system which would give the same rights to all mining companies.8

A good regulatory framework also needs good implementation. This will require that alongside legal development, progress is made towards improving transparency and governance of the mineral sector, improving the technical capacity of ministry staff, allocating adequate resources for investigating and monitoring mining operations, and improving cooperation between the different ministries involved.

One progressive step has been the formation of the Cambodia Association for Mining & Exploration Companies. However, the direction of the world economy will largely determine progress with resource development in Cambodia. Falling commodity prices and mineral prices today make greenfield projects less viable, and many mining companies are refocussing on existing assets of proven value. BMI Research headlined its May 2015 report on Cambodia “Mining potential to remain in the ground”. The company expressed the view that “Given the inherently risky nature of greenfield projects in frontier markets, we believe that a resource boom is unlikely to catch up with Cambodia anytime soon.”9

Last updated: 2 November 2016

References

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