TKV: Boosting Mining Cooperation in Cambodia

A series of large-scaled projects invested by Vinacomin are being carried out in Cambodia. The group also opened a representative office in the neighbouring nation.

 

The iron ore project in Cambodia’s northern province of Steung Treng is a joint venture between Vinacomin and two private Cambodian firms, namely Try Pheap mining Co., Ltd and Mom Good Luck Mining Co., Ltd. The Steung Treng mining joint venture is licensed by the Cambodian Ministry of Trade to operate in 99 years in the country. On March 25, 2008, the Steung Treng mining joint venture started operations in Steung Treng province where it is headquartered.

 

In addition, the Southern Mining Company is a joint venture between Vinacomin and a Cambodian military-run company to exploit chromites in Pursat province. Koh Kong was set up by Vinacomin and P.S.Y Co., Ltd to tap antimony.

 

At present, both joint ventures have obtained the operating licences from the Cambodian Ministry of Trade. The surveying and exploring permit has been granted by the Cambodian Ministry of Industry, Mining and Energy to the Southern Mining Company while Koh Kong Mining Company is waiting for approval.

To encourage investment and create a free and fair trade environment, in March 2003, Cambodia ratified the amended Investment Law issued in August 1994 with new favourable regulations for mining companies from Vietnam. One of the advantages is the three-year tax exemption and another three-year grace, depending on investment field or operations. Tax payment starts when the company makes profit but not exceeding four years starting from the date of operations.

 

Moreover, investors are exempted from tariffs if they import construction materials, production equipment and machinery, intermediate products, crude materials and machine parts. They are also guaranteed from not being nationalised.

 

Vinacomin Group also enjoys several preferences such as leasing land in 99 years on agricultural land, partially owning the land through cooperation with a local enterprise with more than 50 percent of stake. Especially, the group is not imposed pricing control.

 

As regards public administration, one-door administrative procedure is processed at the Cambodian Development Council (CDC) to facilitate and accelerate investing process. The verification of qualification or disqualification is completed within three business days and the official licence granting is made within 28 business days starting from the date of qualification verification.

 

After one year implementing the Investment Law, in 1995, CDC approved a total investment capital of US$2.3 billion in Cambodia. In recent years, the fresh investment capital ranges from US$200 million to US$250 million each year. According to statistics, the total investment capital was US$7.3 billion from 1995 to 2005. FDI capital increased steadily. In 2000, foreign investors injected only US$160 million but the figure amounted to US$342 million in 2004, US$831 million in 2005 and US$4.3 billion in 2006.