'Rare Earth' Exploitation Could Begin by 2015: Officials

Kong Sothanarith, VOA Khmer
Phnom Penh Friday, 19 November 2010

“It means they haven't found enough minerals to exploit."

Cambodia expects the exploitation of “rare earth” materials in 2015, but officials say there is no clear data for its potential.

China produces the vast majority of the minerals, which are critical in the construction of today's hi-tech goods, but experts say some of those materials may be found in Cambodia.

Companies have already begun exploring parts of Cambodia for the rare materials, but none have confirmed an intent to exploit them in earnest, Cambodian officials say.

“We receive from time to time the data, but due to the lack of a real outcome, we don't have confirmation about exploitation from any one company,” said Suy Sem, Minister of Industry.

However, the government is compiling all data related to mineral resources in a bid to attract investment, he said.

At a mining conference held in Cambodia earlier this year, Richard Schodde, a consultant for CRU Strategies, said there is “strong speculative interest” here in “strategic minerals” like lithium and rare earth minerals like scandium, yttrium and other so-called Lanthanides.

Around 60 companies, especially from Australia, China, Malaysia, South Korea, Thailand and Vietnam, have licenses for mineral exploration here. Cambodia has an estimated 25 different mineral types, from bauxite to zinc, gold, iron, and gems.

Mam Sambath, executive director of Development Partnership in Action, said many of those companies are not ready for exploitation. “It means they haven't found enough minerals to exploit,” he said.

But experts say the industry is in its infancy, and a 2001 law on mineral management will eventual help bring more investment.

Economic pacts to be signed on Korean leader's visit to Cambodia

Oct 22, 2009
DPA

Phnom Penh - South Korean President Lee Myung Bak arrived in Phnom Penh Thursday on an official two-day visit focused on economic matters.

'His visit will strengthen relations and cooperation between the countries,' Cambodia's Foreign Ministry spokesman Koy Kuong said Thursday. '[A number of] documents will be signed today, especially on economics and investment.'

Lee was first due to meet King Norodom Sihamoni and later Thursday was to hold talks with Prime Minister Hun Sen, during which the two nations plan to sign several agreements.

Among those deals is one mapping out further loans to Cambodia from South Korea's Economic Development Cooperation Fund over the next three years.

The leaders were also scheduled to sign memoranda on mineral exploration in Cambodia as well as an extradition agreement.

South Korea is a key investor in Cambodia. In recent years, its firms have been involved in a number of infrastructure development projects, including power transmission lines, a sewerage system and a hydroelectric plant.

South Korean companies have also invested in the property sector, particularly in the capital, Phnom Penh, although a number of those projects have been put on ice since the global economic crisis hit last year.

Figures released to local media by the South Korean embassy in Phnom Penh showed bilateral trade between the two nations over the four years to 2008 totalled 750 million US dollars with the bulk of that comprising South Korean exports to Cambodia.

South Korea is also important as a source of tourists to the kingdom although the number of its nationals visiting dropped one-third in the first eight months of the year from the same period last year to 123,000.

Cambodia is hoping that arrivals from South Korea would pick up as it heads into its peak tourism period in the coming weeks.

On Friday, Lee was due to visit Siem Reap to see the Angkor Wat temple complex before flying to Thailand for the Association of South-East Asian Nations (ASEAN) summit in Hua Hin. The regional body has scheduled talks with a number of non-ASEAN nations, including South Korea.

Contract for Marble Exploration in Cambodia Signed Between Terra Insight Services and The Millennium International Group

NEW YORK, Oct. 19 /PRNewswire-FirstCall/ - Terra Energy & Resource Technologies, Inc., a natural resource exploration services technology company, announces that the Company's service subsidiary Terra Insight Services, Inc. signed a service contract with The Millennium International Group, LLC, a US limited liability company.

Terra Insight Services is to perform a two phase marble exploration utilizing Sub Terrain Prospecting Technology (STeP(R)) on an approximately 100 square kilometer service territory in Cambodia.

"The client's payment for our services will be in cash and an overriding royalty in all natural resources which may be produced or extracted from the service territory of two percent for the first phase and one percent for the second phase of the contract. We have been engaged in phase one of the contract, for which we have already received a prepayment," said Dr. Alexandre Agaian, President of Terra Energy & Resource Technologies, Inc.

"Terra aims at utilizing its unique and innovative exploration capabilities for economic interests in natural resource exploration projects in addition to regular service fees," said Dmitry Vilbaum, the Company's Chief Executive Officer. "Consistent with our business model and plans, we see The Millennium International Group as becoming a valuable Southeast Asia market partner for
the Company."

About Terra Energy & Resource Technologies, Inc.

Terra Energy & Resource Technologies, Inc., through its subsidiary Terra Insight Services, Inc., provides mapping and analysis services for exploration, drilling, and mining companies related to natural resources found beneath the surface of the Earth. The Company uses a suite of innovative and efficient technologies, which facilitate the prediction and location of commercially viable deposits of hydrocarbons, gold, diamonds, and other natural resources, and assesses them for any given geographic area - on or offshore. For more information, visit http://www.terrainsight.com.

Safe Harbor for Forward-looking Statements

This press release may contain forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. There are many factors that could cause the Company's expectations and beliefs about its operations, its plans to acquire interests inexploration properties or technologies, plans to drill or drilling results to fail to materialize, including, but not limited to: competition for new acquisitions; availability of capital; unfavorable geologic conditions; prevailing prices for oil, natural gas and other natural resources; and general regional economic conditions.

CONTACT: Terra Energy & Resource Technologies, Inc., (212) 286-9197,
info@terrainsight.com

SOURCE Terra Energy & Resource Technologies, Inc.

Terra Energy & Resource Technologies, Inc., (212) 286-9197,
info@terrainsight.com

Reported mineral exploration in national park raises concerns

Thursday, 05 June 2008
Written by Cheang Sokha and Tracey Shelton
The Phnom Penh Post

An Australian company exploring for minerals in Virachey National Park is reported to have asked villagers to build helicopter landing pads in the forests of the ecologically rich, ASEAN heritage-listed site, highlighting fears that Cambodia's nascent mining sector will undo conservation efforts in the country's fragile environment.

Yang Ke, 48, a member of the Proeu minority, said the request was made last month as he guided representatives of Indochine Resources Ltd., on a visit to the park, which straddles the borders of northeastern Ratanakkiri and Stung Treng provinces.

"We spent two nights traveling in the jungle from my home to the exploration site," Ke told the Post in an interview at his bamboo house in Taveng district, about 50 kilometers from the Ratanakkiri provincial capital, Banlung.

He said the company officials had asked villagers to clear four different landing sites for helicopters because of the difficulty of traveling through the thickly forested park.

An Indochine Resources spokesman, who asked not to be named, said the exploration work was taking place under a permit granted by Ministry of Industry, Mine and Energy in 2007, and with the permission of the Ministry of Environment.

The spokesman said that while he could not say when mining operations might begin, partly because of the difficulty of access, the company recognized that the project would affect the environment.

"But we will try to minimize the impact and our project is strictly monitored by officials at the park."

Environmentalists, however, worry that mining in the park could seriously damage the Se San River and its tributaries.

“The river system in Virachey is one of the most pristine and unique in all of Cambodia,” said David Emmett, the deputy regional director of Conservation International, which has conducted surveys in the park for the last three years.

"The river contains species that don’t exist anywhere else on earth," he said.

"If runoff from mining was to change the water's pH level the whole ecosystem could collapse.”

Emmett said camera traps and surveys have identified populations of rare otters, turtles and frogs, endangered water lizards and pythons and fish species previously unrecorded in Cambodia.

Australian mining firm begins drilling in Cambodia

Nov 28, 2007
DPA

Phnom Penh - Australia's Southern Gold Ltd has commenced mining for gold in north-eastern Cambodia, the company said Wednesday.

In a statement also released to the Australian Stock Exchange, Southern Gold said it had started 'its first drilling campaign in Cambodia' at its 80-per-cent-owned Snoul Prospect in the south-eastern province of Kratie.

Southern Gold and another Australian mining giant, Oxiana Ltd, have taken out adjoining lots in the remote area with both reporting promising pre-drilling exploration findings on gold and base metals. Oxiana already operates the massive Sepon gold mine in neighbouring Laos.

Southern Gold - which like Oxiana also mines for base metals, including lead and zinc - said it expected first assay results in early 2008.

Environmentalists have expressed concern as mining companies flock to newly opened Cambodia, concerns the Cambodian government has said are unfounded.

Chinese mining companies are exploring for iron ore in the country's north, and Australia's BHP Billiton, the world's largest mining company, has reported promising finds in initial explorations for bauxite in the eastern province of Mondulkiri and also has interests in as yet untapped anticipated off-shore oil reserves.

After stripping Cambodia of almost all its natural resources, now come the mining invasion ... when will it stop?

Cambodia Braces for a Mining Invasion

21 September 2007
Douglas Gillison
Asia Sentinel

Some of Indochina’s last protected areas are being opened to mineral extraction with few protections in place

Cambodia’s once-abundant natural resources, whose timber reserves already were stripped to fund its disastrous civil war, are ripe for more exploitation. Saddled with a weak and often corrupt government, it is now in danger of seeing its mineral rights looted, as even officials charged with protecting the environment say the time has come to sacrifice some protected areas to mining development.

Environment Minister Mok Mareth said in a recent interview that a balance must be struck between conservation and development, hinting that the balance would fall on the side of development. "There are too many people worried that it may destroy all the resources, all biodiversity, all ecosystems," he said. "Of course, it's right. It destroys some part, not all. We have to understand that."

In considering exploitation, the ministry obtains binding guarantees that companies will respect the environment and not harm indigenous rights, he claimed, adding that Cambodia was in the process of changing from "100 percent conservation" to a system that can accommodate development.

"We're in the phase of what we call transition," he said.

The issue of how that transition is handled came to the fore in recent weeks when, through a little-known Australian firm, Indochine Resources, two flamboyant Australians won the right to explore for unnamed minerals in 180,000 hectares, or 54 percent, of Cambodia’s Asean-heritage listed Virachey National Park. The concession itself was as big as 254,600 hectares.

Both the Cambodian Environment Ministry and the World Bank, which has funded the management and conservation of the park to the tune of nearly $5 million, were caught by surprise.

The two are geologist Jeremy Snaith and David Evans, who in April became known across Australia as the “bananas in pajamas” after their nude antics aboard a Sydney-Abu Dhabi flight and subsequent arrest for sexual harassment and drunkenness forced them out of their company, Jupiter Mines. That an area so large and so sensitive was now in the hands of men ensnared by a drunken slapstick scandal gave pause to some. The World Bank, for one, announced it was seeking clarification from the government.

“[W]e continue to encourage the government of Cambodia to make good choices when they pick business partners… to ensure that their partners are committed to socially and environmentally responsible development,” a World Bank official wrote in an email.

A rumor in Phnom Penh held that a more reputable Australian mining firm also seeking the concession had been beaten out by Indochine Resources. The case is only one chapter in an unfolding story in Cambodia, which devotes a surprisingly large share of its territory to conservation. According to a 1992 review by the UN's World Conservation Monitoring Center, Cambodia's set-aside level of 26.3 percent was far higher than the land reserved for conservation in Thailand (16.3 percent), the US (11 percent), Indonesia (10 percent) or Australia (5.3 percent).

The country’s 32 environmentally protected areas, such as Virachey National Park, cover more than a quarter of its landmass. These areas also contain gold, copper, chromium and bauxite, creating the potential for Cambodia’s regulators to see dollar signs without foreseeing desolation.

Critics question whether Cambodia has the means, or even the desire, to control how and where mines are dug, or to determine whether the environmental damage they cause is acceptable. Global Witness, the environmental watchdog, has contended that the country’s natural resources until now have formed little more than a cash cow for the country’s elite and that exploiting Cambodia's resources in the absence of the rule of law will not necessarily lead to development or increased prosperity.

For their part, government officials have in recent months repeatedly and rather ominously from the point of view of environmentalists, said that riches to help lift Cambodia out of poverty should not be beyond reach simply because they lie buried beneath the turf of an endangered species.

Environment chief Mok Mareth maintained that the 47,845 square kilometers of land devoted to protecting the environment are hardly sacrosanct.

Critics who feel his ministry is weak and routinely shoved aside in favor of more muscular industrial interests simply do not understand, he added.

"When we developed that," Mok Mareth said of Cambodia's system of protected areas, first created in 1993 around the time that the UN mandate period ended, "we didn't know all the potential of our natural resources, our richness. So we need to have the exploration.”

Cambodia is hardly different from much of the rest of the world, where many protected areas are also routinely open to mining. Authorities permit mining in about 78 percent of South Australia's 332 protected areas, according to the state's regional government.

In Cambodia, however, the matter comes down to a question of management. At a 2004 workshop, Environment Ministry officials and conservation NGOs found that mining was already occurring in nine protected areas and threatening 13 of them.

Since then, the government has lifted a prohibition on mining in protected areas and has invited companies like Indochine Resources as well as BHP Billiton, Southern Mining Company and Oxiana Ltd to explore for minerals sometimes in parts of sanctuaries believed to be crucial for protecting biodiversity.

All four companies have promised to be good to Cambodia's environment. But such deals are being struck even though many of the country's protected areas are under-funded, understaffed, lack comprehensive management plans and most importantly, do not have zoning to protect their most environmentally sensitive areas. These problems, outlined by the 2004 workshop, persist to this day, NGOs say.

Seng Teak, country director for the Worldwide Fund for Nature, said last week that certain core zones must be protected from mining, as the viability of other ecosystems depends on them.

It's called a core zone, he said, "You can't touch that area from a biodiversity point of view."

Mok Mareth said, however, that a consensus with other ministries had emerged that even future core zones were not necessarily off limits for exploitation.

"We got already the reaction, even from the Ministry of Tourism, Ministry of Industry, Ministry of Agriculture and others," he said.

"They also raised the concern: If I accept conservation of this area, a core zone, if we can find a billion dollars for the mining there, how can we exploit these millions of dollars in this area?”

“We did not define any core zones to date," he added.

However, Seng Teak said Cambodia is simply not yet ready to deliver its protected areas into the hands of mining companies.

"I think it may be too early to bring the companies in to invest in the protected areas. It has to have clear zoning," he said. "The right to use the resources should be based on a clear land use plan first."

In weighing development against conservation, the government is poised to make a fateful decision, Seng Teak said.

"The crossroads is balancing the two, because the government sees economic development as a priority and conservation second," he said. "It's a challenge to make that decision."

Bananas head for jungle in Cambodia

July 25, 2007
Jamie Freed
The Sydney Morning Herald (Australia)

JETSETTING Jupiter Mines directors David Evans and Jeremy Snaith certainly get around.

The pair - dubbed "bananas in pyjamas" after inappropriate antics in first class on a flight to Abu Dhabi earlier this year - have turned their attention to the Cambodian jungle.

Through a private company called Indochine Resources - in which Jupiter is a shareholder - Mr Evans and Mr Snaith have gained rights to roam among elephants, tigers and leopards as they pick up rock chip samples in the ASEAN heritage-listed Virachey National Park.

One of their fellow Indochine directors is Robert Coghill, a fellow first-class passenger on the infamous Etihad Airways flight. He provided an affadavit in support of Mr Evans and Mr Snaith.

Last month their lawyer, Ross Hill, said he was "unaware of any connection" between Mr Coghill and his clients. But last night Mr Hill could not reach Mr Evans to confirm.

The fourth and final Indochine director is Chris Eddy, an Australian based in Dubai.

Mr Evans and Mr Snaith were on their way to Dubai when they were arrested at the Abu Dhabi airport. Mr Hill said the visit was in part to attract investors to Indochine. It is believed Mr Evans and Mr Snaith have both travelled to South-East Asia since receiving suspended sentences from an Abu Dhabi judge.

The Cambodia Daily recently reported Indochine - previously named Battle Mountain Minerals - had signed a memorandum of understanding to search for minerals in Ratanakkiri province.

A geologist at Perth's Great Australian Resources, which has exploration projects in Cambodia, said a MOU would allow a company to survey an area and take rock chip samples but the concession would have to be converted to an exploration lease before drilling could take place.

The World Bank has been pushing for the Virarchey National Park to be protected from mining, having provided $US1.91 million ($2.16 million) in loans and $US2.75 million in grants to an environment ministry program since 2000.

World Bank spokeswoman Pichaya Fitts said the Cambodian government was expected to pass a law imposing a strict ban on mining in core areas of the park later this year.

Because very little minerals exploration has been conducted in Cambodia it has been deemed a highly prospective region.

Oxiana hit 33 metres at 9.9 grams per tonne of gold at an exploration project there and its annual report said "field assessment of other areas and projects of interest is ongoing".

Acting Jupiter chief executive Rob Benussi said his company previously had a direct investment in some of the Indochine leases but had converted the holding to shares in the unlisted company. In its March quarterly report, Jupiter said it had invested $120,000 in seed capital.

Meanwhile, Mr Snaith has sold another $28,000 of Jupiter shares. Jupiter is holding a meeting to vote on ousting Mr Evans and Mr Snaith as directors next month.

Why miners dig Indochina

May 30, 2007
By Andrew Symon
Asia Times (Hong Kong)

PHNOM PENH - War and political instability, uncertain legal and regulatory regimes, and the sheer difficulty of working in isolated mountainous and jungle terrain have long conspired against modern mining activities in Cambodia, Vietnam and Laos.

Now the combination of high global mineral prices and more market-friendly governments is propelling a wave of foreign mining investments and pushing exploration and production to levels never before seen in the Mekong region. In French colonial times, there was exploration in the region, but not on a large scale apart from coal operations in northern Vietnam.

Western mining companies made limited forays in the region in the early and mid-1990s, but the 1997-98 Asia financial crisis, flat global commodity prices and vacillating government policies toward foreign investment stymied most of those efforts. Now, small and medium-sized Australian, Canadian and New Zealand exploration companies are in growing numbers taking the regional plunge, most prominently on gold and copper, but also on bauxite, iron ore, nickel, zinc and lead.

Unexploded ordnance from the region's many wars still poses life-and-limb operational challenges to miners. Upon making discoveries, the companies now active in the region often either sell the rights to bigger multinational operators, possibly maintaining an interest, or after raising capital to transform themselves into full-blown operators themselves.

At the same time, the world's largest miner, Australia's BHP Billiton, is also in the regional hunt, including for bauxite in eastern Cambodia's Mondolkiri area in a joint venture with Japan's Mitsubishi. And consistent with China's growing commercial presence in the Mekong region, Chinese mining companies are also taking up positions.

One Western company leading the way is Australia's Oxiana Resources. Listed on the Australian stock exchange, the miner began operating the first of what promises to become a wide array of new mines in Laos run by foreign mining companies. Oxiana started producing gold in Savannakhet province's Sepon area in 2002 and in 2005 expanded into copper. At the time, the US$285 million open-pit mining and processing operation was the first large-scale foreign-invested project in the country.

Jointly developed with support from the World Bank and its private-sector financing arm, the International Finance Corp, last year the mine exported 173,000 ounces of gold dore and 61,000 tonnes of copper cathodes on to the global market. Gold and copper deposits already discovered in the Sepon district hold an estimated 3.9 million ounces of gold and 1.9 million tonnes of copper - and the company says it expects further discoveries.

Sepon's output now makes up a substantial part of Laos' total exports, strengthening the country's trade position and providing desperately needed revenues to the cash-strapped government. In 2005 and 2006, Oxiana paid the national government $50 million and the provincial government $21 million - a sizable amount considering that total central-government revenues from local sources and overseas development assistance is less than $400 million annually.

Oxiana's Vientiane-based Asia manager, Peter Albert, believes that Laos - and the wider largely unexplored Mekong region - have good long-term prospects. Oxiana recently entered an alliance with AngloGold Ashanti, the world's second-largest gold-mining company, to explore for gold throughout Laos. The company has also turned its attention since 2006 to Cambodia and is exploring in the east in the Mondolkiri province for both copper and gold.

Albert acknowledges that managing mining operations does not stop at the pit and plant. As with multinational petroleum companies, miners often find themselves in complex social and political situations, especially in economically underdeveloped countries such as Laos and Cambodia.

Albert emphasizes the benefits the project is providing for local communities, not only through employment and the use of local suppliers, but also through community-development projects provided under a trust fund set up by the mine. He says that of the mine's total 3,500 or so workers, about 2,000 come from the local area and the rest from other parts of Laos - excluding about 350 expatriate employees.

This is hardly surprising, as the social and environmental impact of mining projects are - and will be - scrutinized closely by governments, development assistance agencies, international and local non-governmental organizations and the media. The question of transparency of payments to governments - and the transparency in the use of revenues by governments themselves - is another major issue that has complicated operations in such places as Indonesia.

Oxiana, for its part, sees that its ability to operate long-term in Laos and elsewhere depends on its ability to achieve good relations not just with national governments, but also with communities and local governments in the vicinity of its projects. Albert said Oxiana's Sepon project is a model for both governments and mining companies.

"The project's success rests on four corners - macroeconomic benefits, direct benefits to government, indirect benefits to local communities, and flagship benefits stimulating more investment and setting good standards," said Albert.

Golden opportunities

Other foreign companies in Laos include Pan Australia, which already has a large copper-mining operation in Thailand and began operating Laos' Phu Bia gold mine about 120 kilometers north of Vientiane in November 2005. The mine is also to produce copper beginning next year.

Australia's Rox Resources is developing the Pha Luang zinc-lead-silver zinc mine north of Vientiane and is reportedly looking at copper, gold, iron ore and coal prospects elsewhere in the country. Australian mining company Argonaut Resources is exploring for copper gold in southeastern and northwestern Laos.

In Cambodia, Australian explorer Southern Gold is looking for gold and base metals such as lead in the country's eastern regions, including in Mondolkiri and Kratie provinces.Chinese companies are also reported to be looking for coal in the area, while four Chinese state-owned steelmakers recently announced a joint venture to explore and develop iron-ore mines in the country. Wuhan Steel, China's fifth-biggest steel mill, is leading the project.

In Vietnam, New Zealand's Zedex and Canadian-run Olympus Pacific Minerals began operating in April 2006 the Bong Mieu gold mine at Phu Ninh in the central province of Quang Nam and are reportedly looking at other prospects. Elsewhere, Knight Piesald, of New Zealand, is developing a nickel mine at Ban Phuc in the mountainous northern province of Son La.

The legal and regulatory regimes are similar in Laos and Cambodia, where foreign mining firms pay royalties and corporate taxes under long-term mining licenses. Government or government entities commonly have minority partnership interests in the projects, with that equity carried and subsequently to be paid for through future project earnings.

In the case of Oxiana's Sepon project, the Laotian government has the option of taking up to a 10% interest by forgoing dividends, which it will likely take up this year, according to company sources. The central government receives corporate and other taxes and the provincial government production royalties and taxes. The project received a tax holiday on profits for the first two years, and then pays 16.6% tax for the next two years, and 33.3% for the remaining years of operation.

Vietnam runs on a different set of regulatory gears, because of various state-owned enterprises already active in the mining sector. The country already produces a range of minerals and coal, although far below levels that geologists and the international mining industry think is possible.

Hanoi is now encouraging expansion through the state-owned consortium, the Vietnam National Coal and Mineral Industries Group (Vincomin), which is embarking on several new projects under the government's 10-year mining master plan for the period 2006-15. These include lead and zinc mining and processing in the northern mountainous provinces, bauxite mining and aluminum production in the Central Highlands, and in partnership with China's Chalco for iron ore in the north-central province of Ha Tinh.

All of these are open to foreign investors up to a 30% stake, and foreign interest in Vietnamese ventures is strong. But some foreign miners tend to find Vietnam's legal and regulatory framework more cumbersome than those in Cambodia and Laos, where there is no competition from state-owned enterprises. Despite recent market-opening initiatives, the Vietnamese government still prefers to see national companies positioned strongly in project partnerships.

One important future project is the Nui Phau tungsten project, managed by Canadian miner Tiberon some 80km northwest of Hanoi; the open-cut mine is set to begin production in early 2009. Tiberon executives say Vietnam could become one of the world's largest tungsten producers. The operation is distinguished by the fact that ownership of Tiberon, currently listed on the Toronto Stock Exchange, was recently taken over through an equity buyout by a Vietnamese investment company, Dragon Capital.

Set up by young expatriates in 1994, the investment fund has grown quickly with Vietnam's rapidly rising fortunes in the past five years and has established a profile for institutional investors interested in Vietnam through, among other things, its Dublin-listed Vietnam Enterprise Investment Fund. Dragon's new commitment to mining is arguably a barometer of the momentum now building in the industry in Vietnam and the wider Mekong region.

Andrew Symon is a Singapore-based journalist and analyst specializing in energy and mining.