A highly controversial, Chinese-backed hydropower project in the Areng Valley could be delayed in favour of mining, should “research” for the dam approved by Phnom Penh in February uncover precious metals or gems.

Sinohydro Resources Ltd, a holding company for Sinohydro Group, was granted approval on February 19 for six months of extensive drilling, geological mapping and prospecting in the dam concession in a letter signed by Minister of Mines and Energy Suy Sem Set and obtained by the Post last week.

Pich Siyun, Koh Kong provincial director of the Ministry of Mines and Energy, said yesterday that he did not know whether the firm would discover any minerals in the dam concession.

“If they find minerals [in the dam concession] and know what kind of minerals, they can ask permission from the government to invest in mines,” Siyun said.

The former operator, China Guodian, scrapped the project after it found it could not make enough profit to warrant investment.

Leung Ping, a governor of Sinohydro United, a local “affiliate” of Sinohydro Group, declined to comment, adding that he was meeting with representatives of the Ministry of Mines and Energy yesterday about the project.

The letter from Sem Set, which was sent to Siyun, authorises Sinohydro to “conduct research and collect further data at the site of the Chaey Areng dam”.

Alex Gonzalez-Davidson of NGO Mother Nature Cambodia said the situation was “something that we’ve feared”.

“They are allowed to go ahead with this project, as they are doing already, conduct ‘research’ on dams, logging, but also mining,” he said.

China Guodian, the previous lease-holder of the Areng concession, said in an annual report in February that it had backed out of the project because its own research had shown building and running the dam “was not economically viable”.

Ame Trandem, Southeast Asia program director at International Rivers, said yesterday that “news that China Guodian has pulled out of the Cheay Areng Dam should trigger new warnings that this is a project that clearly should not be built”.

“It’s ethically dubious that Sinohydro would even consider investing in the project, which has been earmarked by previous dam developers as being environmentally and economically unsound,” she added.

“With the dam still being considered, one can only wonder whether the project is simply a front for illegal logging and the future demise of the Central Cardamons Protected Forest.”

The letter obtained by the Post also said that, despite official denials, some level of construction of the dam had been approved.

“The Ministry of Mines and Energy has authorized Sinohydro Resources Ltd. to invest in the construction of Chaey Areng dam in Koh Kong province,” it reads.

“It’s certainly not research,” Marcus Hardtke of conservation group ARA said yesterday. “They’ll probably have to research something about the rock formations, some drilling you can expect, but not that much. I have to assume they [China Guodian] did all the research before. They just have to tick the box and pay something to the Ministry of Environment.”

The government approved 60 Sinohydro employees to do the prospecting and construction. “This work, importantly, includes the use of explosives,” the letter continued.

Siyun, however, denied that explosives would be used.

“Explosions will never be used in the process of studying at Areng,” he said, adding that the company planned only to drill into the ground to study both the layers of earth and mining prospects.

Sinohydro Resources’ website states that it “is endeavored to promote the development and investment of power and mineral resources projects in countries such as [the] Kingdom of Cambodia”.

When asked about Siyun’s comments and the letter from Sem Set yesterday, Ith Praing, secretary of state at the Ministry of Mines and Energy, said “I do not know anything about that.”

Affected villagers have rallied to put a stop to the project, peacefully manning the access road and blocking Sinohydro from transporting machinery into the concession area since last week.

“With more than 60 workers and heavy machinery coming into the area, the villagers are rightly concerned that this may be the start of the dam’s construction,” Trandem added.

“Given the area’s biodiversity significance, it’s also rather questionable that the use of explosives has been permitted during the research. By using explosives in their research, its clear Sinohydro has thrown caution to the wind and has little respect for the biodiversity and environmental importance of the Areng Valley.”

ADDITIONAL REPORTING BY PHAK SEANGLY