PHNOM PENH: Starting in April, exporters of mineral products will be required to deposit a portion of export royalties, with withdrawal permitted upon fulfilment of all contractual obligations.
The Ministry of Economy and Finance, in conjunction with the Ministry of Mines and Energy, issued an inter-ministerial prakas on “Forms and Procedures for the Payment of Non-Fiscal Financial Obligations for the Export of Mineral Products” on Feb 21.
The directive mandates that exporters must deposit a minimum of 5% of the royalties on mineral sales before shipping, in line with the quota policy and existing laws and regulations.
The prakas specifies that the mines ministry must cease issuing export certificates or seek cooperation with other relevant authorities to temporarily halt exports if the balance of the deposit guarantee settlement falls short of the non-fiscal financial obligations.
This applies both to the quantity of minerals based on the requested export certification and to the actual quantity of products shipped.
“Exporters are required to pay the minimum deposit and deposit guarantee at least five working days before the initial export of mineral products.
The minimum deposit should be made at a partner commercial bank with an account holder representing the finance and mines ministries [the Inter-Ministerial Debt Collection Working Group],” read the prakas.
“The aim of this inter-ministerial prakas is to establish the methods and procedures for paying non-fiscal financial obligations related to the export of mineral products. This is to ensure the transparent and efficient collection of revenue, prevent the potential for debt and support the cash flow of exporters of mineral products,” it added.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post that the directive was designed to enhance the efficiency and transparency of exports.
He said it also seeks to generate non-fiscal revenue for the national economy. He noted that income from mineral resources is becoming a significant component of the national budget, highlighting that the country, in addition to domestic refining and processing, ships a considerable amount of natural resources abroad.
“This is to improve the management of mineral exports and increase national income,” Vanak said.
Ung Dipola, director-general for Mineral Resources at the ministry, reported that in 2023, the country received approximately US$50.3 million in non-fiscal royalties from the mining sector.
He noted that the amount represents 144% of the target set by the 2023 budget law and marks a 25.21% increase from the $40.17 million collected in 2022. He attributed the rise to the growth of the industry.
Dipola highlighted that the main income sources for the sector currently include the mining construction business and the gold, cement and iron ore industries.
According to the website www.khsearch.com, major mining areas and their resources by province include: Pailin (precious stones); Pursat (marble in Phnom Ta Sayin); Kampong Thom (iron ore in Phnom Dek and gold and tin primarily around Phnom Chi and Phnom Loeung); and Kampot and Battambang (gems suitable for jewellery and deposits of limestone and phosphate).
The mines ministry report indicated significant growth in the sector recently, especially in the cement industry, which has expanded to 9 million tonnes per year.
It noted that gold refining production reached about 9.6 tonnes by the end of 2023, and construction mining operations and other minerals provide opportunities for the country to export sand, semi-finished sawnstone products, iron ore and dore bars.
The growth has led to a consistent increase in non-fiscal revenue from the sector, with the state’s annual earnings rising from nearly $2 million in 2013 to over $50 million in 2023, as per the ministry. - The Phnom Penh Post/ANN
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