In buying out its partner in a Mondolkiri province gold mine in 2009, the Australian company OZ Minerals paid hundreds of thousands of dollars to people who are reportedly the family members of government officials, according to a company memorandum.
The deal occurred just five months before the company announced an initial resource discovery of 605,000 ounces of gold at the mine. However, the company said in January that subsequent results had been “disappointing.”
Both OZ Minerals and the Ministry of Industry, Mines and Energy last week categorically denied any wrongdoing, with Minister Suy Sem asserting that no ministry officials had received any payments and that the ministry had strictly observed the law.
“Wherever we operate, we act in accordance with local regulations and with international standards. We deny any allegations of inappropriate business practices,” said Natalie Worley, a spokeswoman for OZ Minerals. She did not answer detailed questions.
The disclosure follows last year’s announcement that another Australian company, BHP Billiton, the world’s largest miner, was under investigation by US authorities for potential bribery over a canceled mining project.
Australian newspapers said at the time that the investigation concerned an abandoned project in Cambodia, where BHP had been exploring for bauxite until 2009. BHP said last week that it continued to cooperate with US authorities in the investigation. But BHP has not said which government may have been involved. Officials here have denied any wrongdoing.
The OZ Minerals payments stem from activities in Cambodia prior to the creation of the company in a 2008 merger between Oxiana Ltd and Zinifex Ltd, a zinc producer.
Oxiana in 2006 entered into a joint venture with Shin Ha Mining Co, a local firm that held permission to collect geological data at a prospective location in Mondolkiri’s Keo Seima district.
The company was founded in 2005 by the South Korean investor Wujin Park and named after Mr Park’s stepson Yang Shin, who was given a controlling share in the company.
Prior to concluding the joint venture agreement with Oxiana in 2006, Shin Ha added four women to the board, three of whom were reportedly related to ministry officials.
As exploration progressed in October 2009, Oxiana, then known internationally by its current name, OZ Minerals, bought Shin Ha’s 20 percent stake in the project for $4.6 million, according to a memorandum of agreement.
As a result, a total of $1.15 million was paid to the four women shareholders who had been added to the Shin Ha board in 2006, with $923,077 going to the women with reported ties to the Ministry of Industry, Mines and Energy, also known as MIME.
Sok Sunnary, identified by ministry officials as well as by an internal Shin Ha e-mail as the mother-in-law of Keo Rottanak, the current managing director of Electricite du Cambodge, held 10 percent of Shin Ha’s shares and received $461,539, according to the agreement. Mr Rottanak was MIME’s Cabinet director in 2006, the time of the joint venture.
Sar Sa Um and Sok Sovanchivy, each holding 5 percent of Shin Ha, both received payouts of $230,769.
A woman answering the door at Ms Sovanchivy’s address in Tuol Kok district said last week that Ms Sovanchivy was the daughter of Sok Leng, who is director general of MIME’s general department of mineral resources.
The relationship between the two was also confirmed by MIME officials who spoke on condition of anonymity and by the internal Shin Ha e-mail.
Ms Sa Um is identified in the company e-mail as the mother-in-law of Yos Monirath, a director at the same MIME department.
According to the memorandum of agreement with OZ Minerals, the sale required Shin Ha to provide OZ Minerals with new exploration