BHP to assess Mondulkiri mining venture

Written by Peter Olszewski
Friday, 18 April 2008

Courtesy of Phnom Penh Post at http://www.phnompenhpost.com

Australian mining giant BHP Billiton will soon begin an initial evaluation of its joint-venture Mondulkiri exploration licence in eastern Cambodia to decide if it will start mining for bauxite in the region.
It will also determine the potential for an alumina refinery in the province.
In October 2006, Japan’s Mitsubishi Corporation and BHP Billiton signed a mineral exploration agreement with the Cambodian government to explore for bauxite in Mondulkiri. Most of the exploration sites are in protected forests.
The agreement requires a detailed evaluation of the Mondulkiri exploration licences to determine resource size and quality, environmental and community issues, risks from unexploded ordinances and the appropriate mining, processing and transport options.
Following the studies, which were originally said to be due in the first half of 2008, the partners have the exclusive right to negotiate a mining agreement with the government to develop the project. BHP Billiton and Mitsubishi previously partnered on the Mozal aluminium smelter in Mozambique.
A BHP Billiton spokesman told the Post on April 16 that the initial evaluation will commence this year.
“It is not known exactly how long the initial exploration period will last. If positive, further exploration evaluation can be expected to last up to an additional two years,” he said.
“A team consisting of exploration specialists and ERW (explosive remnants of war) clearance specialists will be based in Mondulkiri during the period, and they will be supported by community and environmental specialists.
“There is no certainty that a bauxite mine will be developed. A bauxite mine requires a large investment, not just in the mine but also in associated infrastructure and for transport of the bauxite.”
The spokesman continued: “This (agreement) does not provide us with a mining license – only a license to explore for bauxite.
“The whole period of exploration and assessment is likely to take at least five years. If a bauxite mine is eventually developed, BHP Billiton would be the operator of the project, but it’s still very early days.”
Commerce Minister Cham Prasidh accompanied Hun Sen on the six-day tour to Australia and on his return, during a press conference at Phnom Penh International Airport, Cham Prasidh said the land set aside for exploration could be up to 1 million hectares.
But during the same week Forbes magazine reported that the size of the exploration area was not revealed.
In December 2007, Prasidh said BHP Billiton would invest between $500 million and $1 billion in exploration in the Mondulkiri region, and Mitsubishi might invest an additional $3 billion if mining begins.
A report by the Australian Embassy said BHP Billiton is expected to invest $1.6-2.0 billion.