I. Overview of Gemstone Mineral Resources

Cambodia boasts a long and renowned history of gemstone mining, with a wide variety of gemstones including sapphires, rubies, zircons, and spinels. The primary type of deposit is placer deposits. The primary source rocks are gem-bearing inclusions or phenocrysts found within basaltic rocks dating from the Pliocene to Early Pleistocene epochs. Placer deposits occur on river terraces or floodplains, forming either residual slope deposits or alluvial deposits. These deposits are widely distributed across several provinces in northern Cambodia, including Battambang, Koh Kong, Preah Vihear, Siem Reap, and Ratanakiri. However, the types of gemstones produced vary from one locality to another: the western regions yield predominantly rubies, while the eastern regions are characterized solely by zircons—among which the largest deposit is located in Phnom Penh, Battambang Province. This area, situated at the edge of an ancient uplift zone controlled by fault zones, hosts several alkaline basaltic eruption centers dating back to around 2.14 million years ago. Overlying pre-Cenozoic rock formations, these eruptions have given rise to mineralized alluvial layers and associated deposits, such as the Yat Mountain sapphire mine in Phnom Penh; ruby deposits at OTang Mountain (7 km northwest of Phnom Penh) and KoNgoap Mountain (6 km north-northwest of Phnom Penh); and the ruby deposits near the Thai border in the Samlot mining district (22 km south-southeast of Phnom Penh), found along riverbeds and alluvial terraces.

The Banteay Meanchey region boasts a long history of gemstone mining and processing. Before World War II, annual production already reached between 2,000 and 5,000 carats; some estimates even suggest that output could have amounted to hundreds of thousands or even millions of carats. Today, the region has become the nation’s leading center for gemstone production. In the Thmei Hills, located about 35 km northeast of Roveng in Pailin Province, numerous small bodies and sheets of Miocene–Early Pleistocene olivine basalt intrude into Permian andesites. The residual and alluvial deposits in this area are rich in sapphires, followed by zircons; rubies, however, are absent. In Bakeo, Ratanakiri Province, in the northeastern part of the country, basalt outcrops cover an area of up to 1,500 km². The residual and alluvial deposits here are particularly rich in high-quality coarse zircon crystals as well as gem-quality garnets and spinels; sapphires are notably absent. Annual zircon production in this region amounts to approximately 1,500 kg. Furthermore, amethysts are also found in fractures and geodes within Mesozoic rhyolites or granites in the provinces of Svay Rieng and Kampong Thom.

II. Overview of Gold Mineral Resources

Gold deposits are widely distributed, primarily in the northern provinces of Siem Reap, Pailin, and Ratanakiri. The gold deposits are mainly of the quartz-vein type and placer type. Gold-bearing quartz veins are commonly found within Mesozoic granitic bodies and their adjacent contact zones with surrounding rocks; some are also hosted in structural fractures—particularly compressive-torsional faults—in Permian limestones or pre-Mesozoic sedimentary metamorphic rocks, occurring either as fine veins or network-like structures, and occasionally as larger veins ranging from several meters to over a hundred meters in length.

Arsenopyrite and pyrite are closely associated with quartz veins in gold deposits, often occurring at relatively high grades—some reaching as high as tens of grams per tonne. The quartz-vein-type deposit exemplified by the Ba Sup Trup gold deposit in Oudong Province is particularly noteworthy. These network-like gold-bearing quartz veins are accompanied by fine-grained granite dikes that intrude into Devonian-Carboniferous shale and limestone formations. The vein widths range from 750px to 40 meters. Occasional sulfide minerals such as pyrite, sphalerite, galena, and chalcopyrite are found within the ore, and the ore grades vary considerably, with the highest gold content reaching 94.42 g/t and an average grade of 4.14 g/t. Additionally, there is the Rom Day gold deposit in Pailin Province, where gold-bearing quartz veins are hosted within dioritic granite intrusions. The vein widths here range from 3 to 2,250px, and the ore contains small amounts of pyrite and arsenopyrite. The highest grade recorded is 20.4 g/t, with an average grade of 7.16 g/t; however, this deposit is relatively small in scale. Similar deposits include the Kambor Mountain gold mine in Siem Reap Province, the Lung Mountain gold mine in Pailin Province, the ThmarMeas Mountain gold mine in Battambang Province, and the Memung gold mine in Mondulkiri Province—all of which remain at a very low level of exploration.

There are two types of placer gold deposits: One is located near the aforementioned quartz-vein-type gold deposits—for example, around the Ba Sup Trup gold deposit, where an alluvial placer gold deposit with an area of approximately 20 km² has been identified, with a grade of 0.9 g/t. The other type occurs in river alluvial deposits, such as those along the Tonle Sap River and its tributaries in Ratanakiri Province. Recently, a red-soil gold deposit has been discovered in Kampong Cham Province in the south; the red-soil layer is 3–4 meters thick and contains coarse-grained placer gold particles ranging in size from 0.1 to 3 mm, with an average grade of 2.77 g/t.

III. Mining Investment in Cambodia

1. All mineral resources are owned by the state.

The Ministry of Industry, Mines and Energy of Cambodia is the national agency responsible for the management and enforcement of all activities related to mineral exploration and extraction (excluding oil and gas) as well as those governed by mining laws. The General Directorate of Mines is a subordinate unit of the Ministry of Industry, Mines and Energy. This department is in charge of mineral development and geological research, and also assumes the function of enforcing the relevant laws.

2. Cambodia has five types of licenses in total.

分别为:

(1) Hand-mining permit (issued only to Khmer nationals).

(2) Mining permits for mines and quarries;

(3) Gemstone mining license;

(4) Exploration license;

(5) Industrial Mining Permit. (Issued only to holders of Exploration Permits, with the purpose of conducting exploration activities and mining commercially viable ore deposits within the boundaries delineated by the Exploration Permit.)

Exploration License: The maximum area limit is 200 square kilometers. The initial approval period is two years, renewable twice for additional periods of two years each. Mineral rights can be transferred.

Mining Permit: The maximum area is unlimited. The initial approval period is 30 years, renewable five times, each time for an additional five-year term. The mining rights can be transferred.

3. Exploration license, mining license for mines and quarries

Gemstone mining licenses or industrial mining licenses may be issued to companies, groups based in Cambodia, or groups based outside Cambodia. If the applicant is a foreign legal entity, it must be duly registered in Cambodia in accordance with the law, establish an office in Cambodia, and appoint an agent authorized to carry out business activities.

4. Materials to be submitted and注意事项 for applying for a prospecting license:

(1) The application form for an exploration license can be obtained from all regional offices of the Ministry of Industry, Mines, and Energy, but it must be submitted only to the Mineral License Registration Office of the Ministry, located in Phnom Penh, for registration.

(2) The application for an exploration license shall include the following information:

① Commercial address and registration certificate shall be provided upon request;

② Financial and technical capability documents;

③ The project team’s professional certificates;

④ Metric location map of the requested area (1:50,000);

⑤ A detailed exploration work plan and budget;

⑥ A bank guarantee with a two-year term, as determined by the minister.

(3) The exploration license is issued by the Minister and has a validity period of two years.

(4) At least 60 days before the expiration of the exploration license, an application must be submitted. The Minister may amend the exploration license up to three times, each extension lasting two years.

For each change to the exploration license, the license holder shall relinquish at least 30% of the area held at the start of the previous validity period. The license holder may not apply again for the land that has been relinquished within one year from the date of relinquishment.

(5) The initial area of the exploration license should not be less than 4 square kilometers, nor greater than 200 square kilometers.

5. Industrial Mining Permit

(1) An application for an industrial mining permit shall be accompanied by a final mine feasibility study report, which should provide all or part of the following key information: mine planning, processing plan, site and facility analysis, environmental impact assessment study and management plan, mine closure and reclamation plan, market and sales plan, financial analysis, capital and operating cost analysis, and employment and training analysis.

(2) The following information will be attached to the mining license after being approved by the Minister:

① Employment, education, and training programs for Cambodian residents;

② A plan to purchase products and services that Cambodia can provide.

(3) The term of the mining license shall be equal to the maximum economic life of the mine as determined in the final mine feasibility study, but it shall not exceed 20 years.

(4) The holder of a mining license shall commence commercial production within three years after obtaining the mining license, in accordance with the regulations prescribed by the Minister, and shall continue mining throughout the validity period of the license.

(5) Exploration licenses, mining licenses for mines and quarries, gem-mining licenses, or industrial-mining licenses may be transferred, mortgaged, or inherited only with the written permission of the Minister.

6. The applicant for a mineral license will receive a formal, dated confirmation of registration of the application, issued by the Minister according to the principle of priority based on early application. Within 45 days thereafter, the Minister will either issue a formal license or notify the applicant of the denial of the license.

7. In addition to manual mining permits, applications for exploration and mining permits registered under the authorization of the “Cambodia Mines and Minerals Law” may be designated as an investment project by the Minister in accordance with the provisions of the Investment Law.

IV. Tax Rates and Fees for Mineral Enterprises

Currently, Cambodia’s tax policies primarily impose the following taxes and tax rates on mining enterprises: a mineral income tax of 30% (although, as no mining companies have yet filed tax returns, the government is still studying the specific income tax liabilities for mining enterprises; according to the CDC, the rate may be reduced). Additionally, import tariffs on equipment and materials required for mining operations are exempt.

Investors legally enjoy ownership of real estate and personal property located on the project land. The rental rate for mining area land is USD 20 per square kilometer for the first and second years, USD 40 per square kilometer for the third and fourth years, and USD 50 per square kilometer for the fifth and sixth years.

The resource tax for mining areas is calculated on a two-year cycle. For the first two-year period, the tax rate is US$400 per square kilometer per year; for the second two-year period, it rises to US$600 per square kilometer per year; and for the third two-year period, it further increases to US$800 per square kilometer per year. Thereafter, the maximum tax rate remains at US$800 per square kilometer per year. When calculating the tax, eligible reductions may also be granted based on the size of the reserves. The export tax rate for non-ferrous metals ranges from 2.5% to 3.5%. In 2002, the personal income tax threshold was set at 600,000 riel (equivalent to US$150), with a tax rate of 5%. For incomes exceeding 150 million riel (approximately US$40,000), the tax rate rises to 20%.

V. Approval Authority for Mining Project Investments—Office of the Cabinet

Generally speaking, the Cambodia Development Council is the one-stop service agency responsible for overseeing reconstruction, development, and investment activities. It comprises the Cambodia Reconstruction and Development Committee and the Cambodia Investment Committee. This agency is tasked with evaluating and making decisions on all reconstruction, development efforts, and investment projects; approving qualified investment projects submitted by investors; and issuing final registration certificates.

However, investment projects meeting any of the following conditions must obtain approval from the Cabinet Office: (1) investments exceeding US$50 million; (2) projects involving politically sensitive issues; (3) exploration and development of mineral and natural resources; (4) projects that may have adverse impacts on the environment; (5) infrastructure projects, including BOT, BOOT, BOO, and BLT projects; (6) long-term development strategies.

VI. Introduction to the “Mineral Resources Management and Development Law”

The “Law on the Management and Development of Mineral Resources” is the primary regulatory law governing the mineral resources sector in Cambodia. According to this law, mineral resource permits must be issued by the Ministry of Mines and Energy, and permit holders are entitled to carry out mineral resource exploration and development activities. No legal entity or natural person may engage in the exploration or development of mineral resources without obtaining a permit issued by the Ministry of Mines and Energy. However, private landowners or lawful occupiers may, even without a permit, extract materials such as gravel, sand, stone, and clay from their own properties, provided that these materials are not removed beyond the boundaries of their land. Thus, landowners can exploit resources like gravel, sand, stone, and clay on their own land without needing to apply for a mineral resource permit from the Ministry of Mines and Energy. It is worth noting that the Cambodian Constitution stipulates that natural or legal persons who are not Cambodian citizens cannot acquire land ownership.

Non-Cambodian natural or legal persons, as well as Cambodian natural or legal persons who are not landowners, shall apply to the Mineral Resources Management Department for a mineral resources license. In Cambodia, mineral resources licenses are categorized into six types: manual mining permits, mine and quarry permits, gemstone mining permits, mineral processing and transformation permits, exploration permits, and industrial mining permits. Each type of license has different target applicants, applicable rules, and covers different scopes and types of mining activities.

VII. Approval Procedures for Direct Overseas Mining Investments by Chinese Enterprises

According to the relevant laws and regulations of our country, Chinese enterprises' overseas mining investments must be submitted for approval to the National Development and Reform Commission (hereinafter referred to as “NDRC”) and the Ministry of Commerce. Only after obtaining the “Certificate of Overseas Investment” issued by the commercial authorities can the investing enterprise apply to the foreign exchange management authority for foreign exchange registration. Once the foreign exchange registration is completed, the investing enterprise may remit the investment funds abroad and repatriate its investment income back to China.

(1) Approval by the NDRC

Provincial-level NDRCs may approve foreign investment projects of the following types: resource-development projects with Chinese investment of no more than US$300 million, and non-resource-development projects with Chinese investment of no more than US$100 million. (Special projects are excluded.)

The aforementioned overseas investment projects implemented by centrally-administered enterprises are independently decided by the enterprises themselves and filed with the National Development and Reform Commission.

National Development and Reform Commission: Foreign investment projects involving resource development with Chinese investments of US$300 million or more; and non-resource development foreign investment projects with Chinese investments of US$100 million or more.

Approval by the State Council: Investment projects intended for countries that have not established diplomatic relations or are subject to international sanctions, or for countries and regions experiencing war, unrest, or other similar conditions—particularly those involving sensitive sectors such as basic telecommunications operations, transboundary water resource development and utilization, large-scale land development, trunk power grids, and news and media—shall, regardless of investment amount limits, be initially reviewed by provincial-level development and reform authorities or centrally-administered enterprises before being submitted to the National Development and Reform Commission for approval. Alternatively, such projects may be reviewed by the National Development and Reform Commission and then submitted to the State Council for approval.

(2) Approval by the competent commercial authority

The Ministry of Commerce is responsible for reviewing overseas investment transactions and approving the establishment of corporate entities involved in such transactions. Enterprises must obtain approval from the relevant authorities before the contracts or agreements they sign abroad relating to overseas investments take effect.

(3) Foreign Exchange Registration with the Foreign Exchange Administration Authority

Domestic institutions undertaking overseas mergers and acquisitions are required to register their direct overseas investments with the State Administration of Foreign Exchange (SAFE). Domestic institutions may use freely convertible foreign exchange funds, domestic and foreign currency loans, RMB converted from foreign exchange, or in-kind assets, intangible assets, and other foreign exchange assets approved by SAFE as sources for their direct overseas investments. The registration with SAFE shall be carried out only after the investment has been approved by the competent authorities for direct investment—namely, the Ministry of Commerce and the National Development and Reform Commission—and following the payment of preliminary expenses.

(4) Overseas mining investments by special-purpose companies established by individual residents within China.

Residents within China can make overseas mining investments by establishing special purpose companies.