Bauxite reserves in Mondolkiri province abandoned by Australian mining firm BHP Billiton in 2009 are now being explored by China’s Mongolia Erdos Hongjun Holding Group, the same firm that is behind the controversial development of Boeng Kak lake in Phnom Penh.
Kong Pisith, director of the Mondolkiri department of industry, mines and energy, said that Mongolia Erdos Hongjun and its local partner, Cambodia International Investment Development Group, had been granted an exploration license in early 2010 and is currently conducting a feasibility study to mine 36,000 hectares of land in Sen Monorom City and O’Reang district.
“Some parts of the land was formally explored by BHP,” Mr Pisith said.
“Today, they started conducting the feasibility study on 360 square kilometers of land in two districts,” he said.
In an interview given last July, Mr Pisith said that a joint venture company from Cambodia and Vietnam called Alumina had been granted a two-year exploration license in December 2009, allowing it to carry out preliminary studies on 1,254 square km of terrain in Keo Seima, O’Reang and Pech Chreada districts as well as in Sen Monorom City. Mr Pisith declined to say whether Alumina was still operating in the area.
According to published maps, the area that Mongolia Erdos Hongjun is now exploring straddles land formally occupied by BHP, which was exploring on an area of 96,600 hectares. BHP officially terminated its activities in December 2009 without explanation.
In late 2010, Mongolia Erdos Hongjun merged with Shukaku Inc to develop Phnom Penh’s Boeng Kak lake. Thousands of families have since been evicted from the site in ways that human rights groups say are illegal.
Rights and non-governmental groups yesterday raised concerns that the mining project was falling short in its obligations to inform locals of its activities and urged the government to share information on the Mondolkiri project publicly.
Sann Dy, a translator for Cambodia International Investment Development Group, said that Mongolia Erdos Hongjun had started digging activities since May and plans to finish the feasibility study by December.
“They will conduct research until 2012,” he said. “The company will also build an aluminum processing factory in 2013, creating jobs for 1,500 people.”
While Mongolia Erdos Hongjun appears to be gearing up for exploration work in the area, very little information has been given to local communities.
Rights groups say locals, including ethnic Banong villagers, have been growing anxious since the company began work in the area.
Nget Vanndy, a representative of the Banong community in O’Reang district’s Dak Dam commune, said that Mongolia Erdos Hongjun had started digging “several” 8-meter-deep holes in the area and that more than 369 families in three villagers had raised fears about the project.
At a meeting on June 15, he said, local authorities met with villagers in order to put their fears to rest.
But “villagers said that the company did not inform their community in advance, making them feel concerned about [encroachment on] sacred burial sites and holy areas,” Mr Vanndy said.
Mam Sambath, chairman of the Cambodians for Resource Revenue Transparency, a coalition of NGOs fighting for transparency in Cambodia’s extractive industries, said that he was unaware of Mongolia Erdos Hongjun’s presence in Mondolkiri province.
“We are not aware of this project,” he said in an e-mail.
“We need to follow up the Mongolia Erdos Hongjun and ask the [government] to share this information publicly.”
The company needs to inform and consult with local communities regarding their programs, so that concerns and possible impacts can be managed and minimized, he added.
Minister of Industry, Energy and Mines Suy Sem and Sok Leng, director general of the department of minerals, could not be reached.
Mining activities in Mondolkiri province have had a long history of poor transparency.
In a May 2008 US diplomatic cable, published by the anti-secrecy organization WikiLeaks, local authorities in Cambodia were said to be completely in the dark about mining projects planned in their areas, and the interests of residents were often ignored when mining licenses were allocated.
Underscoring that observation, the cable stated that Dave McCracken, a representative for the global miner BHP Billiton, which was exploring for bauxite in Mondolkiri province at the time, dealt “only with national authorities, often the Prime Minister himself.”
BHP, which departed Cambodia in 2009, drew negative scrutiny to the government in April last year when it announced that the company was the target of an investigation by US authorities over what appeared to be undocumented “tea money” payments made to the government in 2006.