Cambodia’s Economic Shift: Exploring the Impact of the Kingdom’s Gold Rush on Government Revenue and Employment Opportunities

Cambodia may not be the first country that comes to mind when you think of gold-producing nations, but a recent surge in production has reshaped the nation’s economic structure. Cambodia’s gold production commenced in 2021 after Renaissance Minerals, a major minerals exploration company, began operating in the Mondulkiri province. In the last two years, Cambodia has produced just under nine tons of gold, offering a new source of revenue for the nation’s economy.

“As of now, Cambodia has produced around 1,040 gold bars, totalling approximately 8,979kg. With the gold, the government has earned more than $14.4 million in royalties,” the Minister of Mines and Energy Keo Rattanak stated during the Mining and Energy Policy in Cambodia forum.

Rattanak explained that Cambodia currently has six primary companies refining its gold ore. Ung Dipola, the director-general of the General Department of Mineral Resources at the ministry, added that some of these companies are mining gold as well.

Dipola noted that Cambodia’s most prominent gold-mining operation is controlled by Renaissance Minerals in the Mondulkiri province. The Okvau Gold Project has estimated ore reserves of over 14 million tons, grading at an impressive two grams per ton for 907,000 ounces. The updated mineral resource estimate on the project is 17.7 million tons, with an estimated lifespan of seven years based on the latest feasibility study.

So far, Renaissance Minerals has produced 3.5 tons of gold for Cambodia at a 90% purity rate since its commercial operations began last June. In total, Renaissance Minerals’ production has yielded $5.1 million in royalty income. According to Hong Vannak, an economic researcher at the Royal Academy of Cambodia, Renaissance Minerals has experienced significant increases in gold production lately, greatly supporting Cambodia’s economic growth.

The Renaissance Minerals mining operation sits in the Okvau region on the eastern corridor of the Keo Seima’s Chung Phlas commune in the southwestern Mondulkiri province. Here, Renaissance Minerals hopes to produce an average of three tons per year. With that goal, Renaissance Minerals expects to generate around $185 million per year in pre-tax cash flow, which would contribute to $40 million in governmental funds through taxes and royalties.

Beyond Renaissance Minerals, though, Cambodia has numerous other high-yielding prospects. Delcom Campuchea Plc., a new joint venture between local and Chinese investors, recently began trial operations in the Preah Vihear northern province, extracting roughly 20 kilograms of semi-refined gold ore.

The company only recently began its extraction processes in early August but aims to quickly ramp up production. “It is a medium-sized company that is capable of producing around 340 kilogrammes of gold per year,” according to Dipola. Dipola expects the firm’s annual royalties to exceed half a million.

In July of this year, the Council for the Development of Cambodia also approved a proposal from Metal Jewelry (Cambodia) Co Ltd to invest $9 million in a jewelry factory within the Royal Group Phnom Penh Special Economic Zone, sitting just southwest of the capital city’s airport. The factory will produce and assemble jewelry made of various types of metal, including gold.

“It is wonderful news for our nation that a jewellery plant has sprung up, a non-garment venture,” Cambodia Chamber of Commerce vice-president Lim Heng commented. “The arrival of the jewellery plant demonstrates investor confidence in the country’s stability and peace.”

In total, the General Department of Mineral Resources has granted gold mining licenses to six promising companies, including Renaissance Minerals and Delcom Campuchea Plc. Dipola explained that there are currently no mining operations in the Ratanakkiri province, though three companies have active gold exploration licenses in the area, including two subsidiaries of Canadian-based Angkor Gold Corp and the Chinese company Oriental Wisdom.

According to Vannak, Cambodia’s blooming mining sector not only supports the nation’s economy but also provides promising labor opportunities to local communities. For example, Mineral Resources employs over 4,800 individuals alone. When looking at the total population of the Mondulkiri province, this single gold operation employs over 5% of the area, and that’s without excluding various age groups, like children.

“The government should persist in ensuring companies adhere to mining regulations and continue to license these types of firms for gold exploration in other areas,” Vannak suggests.

Ultimately, approving additional mining operations should support the government’s national budget while helping Cambodians land economic opportunities that support their families and futures. With gold prices excelling beyond record rates, it makes sense that nations like Cambodia want to capitalize on the opportunity to begin producing gold locally.

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