VND2 trillion loss predicted if mining at Thach Khe stops
VietNamNet Bridge – The Ministry of Planning and Investment (MPI) has suggested stopping mining operations at Thach Khe, the biggest iron ore operation in SE Asia, but the Ministry of Industry and Trade (MOIT), Vinacomin and Thach Khe Iron JSC (TIC) have disagreed about the plan.


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The proposal by Vinacomin to resume mining at Thach Khe is supported by MOIT but the Ha Tinh provincial authorities, where the mine is located, have expressed concerns about existing problems. Thus, the Prime Minister has asked MPI’s opinion.

MPI has proposed halting the project as well as the 2 million ton per annum project on ingot steel. 

Nguyen Quoc Hung, TIC’s CEO, said he could not understand why he should stop mining at Thach Khe, a good iron ore mine which he calls the ‘bread for Vietnam’s black metallurgy industry’. Vietnam still has to import iron ore, and needs 15.5-18 million tons by 2020.

According to Hung, though the project has been suspended, TIC is still investing in support works to improve the environment and security conditions.

The Ministry of Planning and Investment (MPI) has suggested stopping mining operations at Thach Khe, the biggest iron ore operation in SE Asia, but the Ministry of Industry and Trade (MOIT), Vinacomin and Thach Khe Iron JSC (TIC) have disagreed about the plan.

“Legal procedures were completed one year ago and we have been waiting for the government’s nod to continue the project,” he said.

As for weak capability of the investor, Hung said only when the government gives the ‘go-ahead’ signal will the shareholders contribute capital and the banks disburse money.

“Bankers have committed to provide loans. We will sign credit contracts soon after the Prime Minister allows the project. We will have money then,” he said. “Shareholders are capable of contributing capital.”

Because three shareholders have not contributed capital since 2011, Vinacomin has decided to increase its capital contribution ratio from 51 percent to 60 percent, while Thang Long Company will increase the ratio from 3 percent to 12-13 percent.

If the government agrees on the restructuring, the weak shareholders will be excluded and replaced with more capable shareholders.

“Both Vinacomin and Thang Long have committed to contribute capital of VND200 billion,’ he said.

Vinacomin said that the reasons cited by MPI to reject the project, including problems in environment, financial capability and iron consumption, are ‘groundless’. The miner has conducted thorough research on the issues and found solutions.

MOIT warned that if the project is forced to terminate, the shareholders will suffer heavily. They have poured VND2 trillion into the project since 2007.

The ministry says that if the project is implemented, it would make up 0.3 percent of GDP every year.


RELATED NEWS

Ministry urges Thach Khe Iron Mine termination

Ha Tinh proposes cancelling Thach Khe iron mine project


Luong Bang

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