Miner Vinacomin Picks Up Where BHP Left Off

Mondolkiri province bauxite reserves abandoned last year by the Australian miner BHP Billiton are now being explored by Viet­nam’s state-owned mining company, an official said yesterday.

According to Kong Pisith, director of the Mondolkiri department of industry, mines and energy, Viet­nam National Coal Mineral In­dustries Group is conducting feasibility studies for a bauxite mine on sites explored by BHP between 2006 and 2009.

The news represented a reversal for BHP, which unceremoniously exited the country last year after its 2006 arrival here was announced with fanfare by the government. Unconfirmed reports indicated that BHP was reluctant to refine the ore locally but failed to negotiate its transshipment out of Vietnam to an African refinery.

The Australian company, the world’s largest miner, also revealed earlier this year that it is the target of a US bribery investigation concerning abandoned exploratory projects. Australian media reports claimed these were in Cambodia but officials here deny this.

Mr Pisith said yesterday that Vinacomin was granted a two-year license in December 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.

The area formerly licensed to BHP also straddled those districts, according to published maps.

“There are a few Vietnamese companies in a joint venture but Vinacomin is leading the operation,” Mr Pisith said. “After the firm received its two-year license for conducting studies required under the mineral law, it visited the site in January and started operations in April.”

Mr Pisith said Vinacomin’s activities were currently taking place in “some of BHP’s former exploration sites,” which totaled an area of 966 square km and were officially terminated by the company in December 2009.

BHP spokeswoman Amanda Buckley declined to comment yesterday.

So far Vinacomin has drilled about 400 test holes in Pech Chreada district, an operation that Mr Pisith described as the “first step” in Vinacomin’s feasibility study.

“By November, the company will fly over the area of protected forest to study the geography of the land in the second step,” Mr Pisith said.

He added that if Vinacomin decided the area is fit for full-scale exploration, the company must first conduct an environmental and social impact assessment before the government grants an exploration license.

Yun Heng, director of the department of evaluation and incentive within the Council for the Development of Cambodia, confirmed yesterday that Vinacomin had acquired a license from the government in Mondolkiri and referred all other questions to the Ministry of Industry, Mines and Energy, where officials could not be reached.

Vinacomin representatives did not respond to written questions. Since BHP decided to terminate its exploration activities in Mondolkiri province, the government had been mum on whether other companies had shown interest in the area’s bauxite deposits.

In advance of an investor conference held in Ho Chi Minh City, Prime Minister Hun Sen said on Dec 23 that the government was to provide a license to an unnamed Vietnamese company to explore bauxite-mining opportunities in Mondolkiri province.

In the case that Vinacomin does progress to the exploration stage, Mr Pisith said the government will make decisions on whether or not trees inside protected zones will be cut down in favor of development of the mineral sector.

“There are lots of issues to be discussed to ensure the benefits from mineral exploration are in line with policies on environmental protection,” he said, adding that any affected communities would be fairly compensated.

Contained near to the earth’s crust, bauxite is extracted in large open cast mines that can require stripping the earth of its surface, destroying the vegetation and natural habitats above.

The energy-intensive refining process requires very high volumes of water and also produces large amounts of toxic, highly alkaline residue known as “red mud” that can pollute rivers and require difficult long-term storage. On average four tons of bauxite is needed to create one ton of aluminum.

Earlier this year, Vinacomin, which began large-scale investment in the aluminum industry in 2007, began construction on bauxite refinery in Vietnam’s Dak Nong province on the Cambodian border.

Vietnam contains the world’s third-largest bauxite reserves but has experienced national debate over the environmental cost of developing them, with war hero General Vo Nguyen Giap urging the government to halt mining plans.

Sam Sarin, provincial coordinator for local rights groups Adhoc in Mondolkiri, said that while no complaints had yet risen from Vinacomin’s activities in Mondolkiri, previous exploration activities by companies in the area had worried indigenous communities that places of spiritual significance inside forested areas would be destroyed.

“Local communities always ask the firm to help organize their indigenous celebrations in areas where the firm is operating in forested areas,” Mr Sarin said.


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