News / Asia

Cambodia's $11 Billion Mystery

A man rides a motorcycle past a signboard for the Cambodia Iron Group at the Rovieng District in Preah Vihear province, February 10, 2013.
A man rides a motorcycle past a signboard for the Cambodia Iron Group at the Rovieng District in Preah Vihear province, February 10, 2013.
TEXT SIZE - +
Reuters
— The remote district of Rovieng was once a battleground between Cambodian government troops and Pol Pot's genocidal Khmer Rouge. Unexploded bombs still lurk in its fields and forests.

So does something more desirable - iron ore - and supposedly in such huge quantities two Chinese companies have an $11 billion plan to extract it.

Their proposal - a steel plant and seaport linked by a 404-km (251-mile) railroad - has alarmed environmentalists, mystified mining and transport experts, and bolstered Cambodia's reputation as an agent for Chinese expansionism in a region where the United States is increasingly competing for influence.

It is the latest in a series of mega-projects underscoring China's growing economic clout in mainland Southeast Asia, while improving China's access to supplies of raw material and ports in the Indian Ocean and South China Sea.

Work will soon begin on a $7 billion railway through Laos to  link China's Yunnan province with northeast Thailand. And in Burma work is almost finished on a $3 billion twin pipeline project to carry oil and gas to Yunnan from Burma's Bay of Bengal coast.

The railway, port and steel project will be Cambodia's largest, with a price tag not far off the value of the country's $12.9 billion economy. The steel plant in Rovieng, in northern Cambodia, will be its first. The seaport on a Cambodian island in the Gulf of Thailand will be connected to the mainland by a 3-km (1.9-mile) bridge. The railroad will almost span Cambodia, although its exact route hasn't been revealed.

"This is 65 percent iron,'' says Sun Qi Cai, 58, caressing a heavy, gleaming lump of Rovieng rock. "Not many places have such high-quality ore.''  That includes China, the world's largest steel-maker, where most ore has an iron content of less than 40 percent.

Sun is a Chinese site manager for Cambodia Iron and Steel Mining Industry Group, which on Dec. 31 signed a deal to build the three-part project with China Major Bridge Engineering Co, a subsidiary of state-owned behemoth China Railways Group.

The iron ore is destined for the steel plant - by law, ore cannot be exported from Cambodia. Mining experts could not hazard a guess as to how much ore is recoverable in Rovieng and there was no indication of how much steel it would produce and where the products would go.

Those are just some of the unanswered questions about the project.

China's Clout

Speaking at the signing ceremony, Cambodia Iron and Steel General Manager Zhang Chuan You said work would begin in July and be finished within four years. But Cambodia's transport minister Tram Iv Tek, who also attended the ceremony, professed to know almost nothing about it. The conspicuous absence of authoritarian Prime Minister Hun Sen also left many wondering whether China's mystery train was going anywhere.

"There are a lot of real things happening here with Chinese money,'' says Daniel Mitchell, a long-time American resident who runs a Phnom Penh investment firm called SRP International. "I don't think this railroad is one of them."

Mining experts question whether northern Cambodia has enough mineral wealth to justify the project's costs. Transport experts wonder why the Chinese railroad will not connect with Cambodia's existing train system, which is already being refurbished at a cost of at least $141.6 million, or either of its ports.

The ambitious project could be as much strategic as economic. Chinese investment pledged in Cambodia has totaled $9.1 billion since 1994, including almost $1.2 billion in 2011 - eight times more than the United States, according to the Cambodia Investment Board. China is also Cambodia's largest aid donor.

That money carries political clout. Last year, Cambodia used its powers as chair of the Association of Southeast Asian Nations (ASEAN) to stymie discussion on the South China Sea, where China's territorial claims overlap those of five other countries. Cambodia emerged as a staunch China ally willing to put the interests of its giant neighbor over those of its ASEAN members.

The lesson for Washington was clear.

"For U.S. strategists, if you neglect certain ASEAN countries you hurt U.S. interests," says American scholar Carlyle Thayer, an Asia Pacific security expert at the Australian Defence Force Academy in Canberra. "There's a price to pay ... because China's economic dominance carries political influence, the U.S. has to compete across the board."

Amateurish Facade

Cambodia Iron and Steel doesn't look like a billion-dollar company or, as Chinese media reports describe it, a Cambodian one.

It is registered to three Chinese nationals who, says Rovieng site manager Sun, are brothers. The only Cambodian found working at its Phnom Penh headquarters, a five-story building flanked by a paint shop and a Korean restaurant, was the cleaner.

Despite its amateurish facade, other evidence suggests that Cambodia Iron and Steel is moving ahead with its project, and Cambodian officials know more than they publicly state.

On July 15 last year, telecoms and electricity officials were summoned to the Ministry of Public Works and Transport to explain to a Chinese representative from Cambodia Iron and Steel where the country's fiber optic and electrical cables were buried.

"He wanted to know so that the train track didn't cut through them," said a Cambodian who attended the meeting.

An official at the company's Shanghai-based partner, China Major Bridge Engineering, said it would begin construction this year but gave no specific date.

Catalysts for Protest

In Burma, where a quasi-civilian government replaced a military dictatorship in March 2011, Chinese mega-projects have been catalysts for protest. China armed and supported Burma's hated military during decades of Western sanctions, and is still resented by many people.

China's ambassador to Burma, Li Junhua, has promised greater transparency from Chinese companies doing business in the country. In Cambodia, however, Chinese companies remain tight-lipped and closely allied with an authoritarian government that last year jailed record numbers of land-rights activists.

In one token of their close collaboration with the government, Chinese projects in Cambodia are often guarded by soldiers or military police. Chinese workers often dress in military fatigues.

No sign marks the entrance to Cambodia Iron and Steel's vast site near Rovieng village, only a ramshackle house occupied by armed Cambodian soldiers who stopped Reuters from entering.

"I'm scared the Chinese will get angry," one soldier said.

Som Soeun, 64, a community leader, was among hundreds of villagers who attended a 2011 ceremony in Rovieng to announce the building of a steel plant. Also present was Suy Sem, Cambodia's Minister of Mines and Energy, who told villagers not to protest against a plant "needed for the country's development," Som Soeun recalled.

Trucks are seen in the compound of the Cambodia Iron Group at the Rovieng District in Preah Vihear province, February 10, 2013.Trucks are seen in the compound of the Cambodia Iron Group at the Rovieng District in Preah Vihear province, February 10, 2013.
x
Trucks are seen in the compound of the Cambodia Iron Group at the Rovieng District in Preah Vihear province, February 10, 2013.
Trucks are seen in the compound of the Cambodia Iron Group at the Rovieng District in Preah Vihear province, February 10, 2013.
With the help of local people, Reuters reporters entered the same area and found no sign of construction. Trucks and other heavy machinery lay idle. Lumps of iron ore littered the deserted access roads.

The Cambodia Iron and Steel's depot in Rovieng village already occupies what used to be community ground: the local soccer field. The depot also lay dormant. A villager who had befriended its few Chinese workers said they complained of being broke, bored and homesick.

The prospect of a railroad cutting a swath through homes and land is unsettling, says Som Soeun. So is the continued silence from government and company officials.

"I am worrying every day now," he says.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

This forum has been closed.
Comment Sorting
Comments
     
by: Davis K. Thanjan from: New York
February 14, 2013 10:44 AM
Don't cry for Cambodia and don't cry for Burma. The US do not have the capability to start mega projects in foreign countries by the private sector or public sector. China captured the world raw material market by the interface of Chinese private companies used as front for the expansion of industrial growth by the Chinese government. The Chinese captured raw materials from Latin America, Africa and the South East Asia leaving the rest of the world at the mercy of China. But crying foul, citing environment reasons, is not a satisfactory reason for the inability of the US.. The US is too late to realize the dominance of China in procuring natural resouces used in industrial production. The rest of the world is begging for industrial products from China, because no other country can supply cheap products.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid