$311m needed for iron ore mine

09:53 | 21/12/2016 Industry

Around VND7 trillion (US$311 million) has to be mobilised to restart work on the iron ore project in central Hà Tĩnh Province, a Ministry of Industry and Trade official said.  

311m needed for iron ore mine
Photo: vneconomy.vn

The project to exploit the Thạch Khê ore mine, which has the largest reserves in Southeast Asia, has been suspended since 2011 because of capital shortage.

Trương Thanh Hoài, director of the ministry’s Department of Heavy Industry, was responding to the request by Việt Nam National Coal-Mineral Industries Group (Vinacomin) for the capital to be mobilised from local steel consumers such as Hòa Phát and Hoa Sen, local newspapers reported.

The total reserve of ore in the mine is estimated at 544 million tonnes and its value at $35 billion. The mine would become a sound supply source for the country in the next five years, producing an estimated 20 tonnes a year, according to the Việt Nam Steel Association.

The project, which kicked off in 2009 and required a total investment of VNĐ10 trillion ($444 million), was managed by Thạch Khê Iron Joint Stock Company. However, two years later, the project was stopped after 13 million cubic metres of top soil were excavated. The reason given was the use of outdated technology.

The company was also short of capital at the time as only its biggest shareholder, Vinacomin, had fulfilled its commitments. To date, site clearance and the relocation of 4,000 households whose land has to be acquired, which will cost VNĐ3.5 trillion ($157 million), has not been completed.

In its request, Vinacomin said it has proposed the restructuring of shareholders in Thạch Khê and the use of new technology to extract ore. It has also asked the Government to allow the payment of mineral exploitation tax to be delayed until 2019 so that the company has funds for site clearance.

Officials said the ministry was considering approving Vinacomin’s request. Vinacomin expects the project to restart at the end of the year.

Theo VNS