Two Firms Land Million-Hectare Exploration Deal

Australian mining giant BHP Billiton and Japanese firm Mit­subishi Corp have been given permission to explore for bauxite, gold and copper on what could be up to 1 million hectares of available land, Commerce Minister Cham Prasidh said Saturday.

Speaking at Phnom Penh International Airport after he and Prime Minister Hun Sen returned from a six-day visit to Australia, Cham Prasidh said Cambodia could become a world leader in bauxite mining, and that the land is mostly in Mondolkiri and Ratanakkiri provinces.

He added that the Cambodian government has high hopes for the two firms because they are international.

“The land for exploration can be about 1 million hectares because Mondolkiri is a poor [province] but it has a gold and bauxite treasury underground that we have not recovered,” Cham Prasidh said. “When we have peace we must explore and do business.”

“If they can find aluminum, they will build an international factory to produce aluminum,” he said of the two firms, adding that their joint project could eventually be bigger than all other investments in Cambodia.

A spokesman for the Australian Embassy confirmed that BHP Billiton, Mitsubishi and the Cambodian government signed an agreement on Oct 11 in Canberra, but declined to discuss its details.

BHP Billiton said last week that studies will be conducted to assess the environmental impact of the project, Forbes magazine reported on Wednesday. The report did not reveal the size of the exploration area.

The two firms will have exclusive rights to negotiate a mining agreement with the government once the initial studies and exploration are completed, which will most likely be by the end of 2008, Forbes said, citing a unnamed BHP Billiton spokeswoman.

Nharang Chan, Mondolkiri provincial deputy governor, said he welcomed mineral exploration in his province.

“My people will have more employment because now they rely on farms that can’t provide them with enough food,” he said.

He added that he has no concerns over the environmental impact of exploration in his province.

“The company must comply with the law, I don’t have any concerns,” he said.

Chinese firm Wuzhishan has already stoked controversy in Mondolkiri with a vast tree-planting concession. Ethnic minority villagers claim the concession has destroyed their ancestral burial areas and spirit forests.

Ratanakkiri Provincial Governor Moung Poy declined comment on BHP Billiton and Wuzhishan, saying he was unaware of the agreement.

Teak Seng, country director for the World Wildlife Fund, said he was not aware of the geographical boundaries of the exploration area.

He said this makes it difficult to meaningfully assess potential social and environmental impacts of the project. However, the sheer size of the potential mining area is a concern.

“It must overlap with protected areas,” he said.

The WWF is working with other environmental groups to form a coalition to study the issue and, hopefully, work with BHP to minimize any negative environmental impacts, he said.

“This coalition needs to be formed quickly,” he said. “Our big worry is the destruction of biodiversity and the social impacts.”

He also expressed concern over the project’s potential impact on indigenous groups still living off the land.

“Bauxite is more destructive than gold,” Teak Seng said. “With gold, you drill down. In bauxite mining, they take off the ground layer.”

Bretton Sciaroni, chair of the International Business Club, said that although he was unaware of the specifics of the agreement, BHP Billiton and Mitsubishi would have to adhere to international standards.

“There are a lot of companies that have had problems in the past and learned from those experiences,” he said.

“I see positives. The appearance of really large mining concerns will upgrade the quality of mining,” he added.

But SRP leader Sam Rainsy said he was very concerned by Cham Prasidh’s announcement.

“Cambodia’s land area is only 18 million hectares. So if you take 1 million hectares out, it’s a lot,” he said.

“This will bring about the same results if we don’t control the process properly,” he said.

BHP Billiton officials in Australia did not respond to an e-mail seeking comment Sunday.

Mitsubishi officials in Phnom Penh could not be reached for comment on Sunday evening.

(Reporting by Yun Samean, James Welsh and Erika Kinetz)


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