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.
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

FIFA Indictments Put Gold Cup Tournament Under Cloud

Experts say US indictments could lead to charges of other world soccer officials, and lead to major shakeup in sport's governance More

Video Seoul Sponsors Korean Unification Fair

At a recent even in Seoul, border communities promoted benefits of increased cooperation and North Korean defectors shared stories of life since the war More

Video VOA EXCLUSIVE: Iraq President Vows to Fight IS 'Until They Are Killed or We Die'

In wide-ranging interview with VOA Persian service reporter, Fuad Masum describes conflict as new type of fight that will take time to win 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.
Forced to Return Home, Afghan Refugees Face Increased Hardshipi
X
Ayesha Tanzeem
May 28, 2015 6:48 PM
Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Forced to Return Home, Afghan Refugees Face Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video Floodwaters Recede in Houston, but Rain Continues

Many parts of Texas are recovering from one of the worst natural disasters to hit the southwestern state. Heavy rains on Monday and early Tuesday caused rivers to swell in eastern and central Texas, washing away homes and killing at least 13 people. As VOA’s Greg Flakus reports from Houston, floodwaters are receding slowly in the country's fourth-largest city, and there likely is to be more rain in the coming days.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video US Voters Seek Answers From Presidential Candidates on IS Gains

The growth of the Islamic State militant group in Iraq and Syria comes as the 2016 U.S. presidential campaign kicks off in the Midwest state of Iowa.   As VOA’s Kane Farabaugh reports, voters want to know how the candidates would handle recent militant gains in the Middle East.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Film Festival Looks at Indigenous Peoples, Culture Conflict

A recent Los Angeles film festival highlighted the plight of people caught between two cultures. Mike O'Sullivan has more on the the Garifuna International Film Festival, a Los Angeles forum created by a woman from Central America who wants the world to know more about her culture.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.

VOA Blogs