Prime Minister Nguyen Tan Dung has requested drastic measures to speed up the slow pace of the Thach Khe iron ore project in the central province of Ha Tinh.
Thach Khe iron ore mine
Investor restructuring
Dung underlined the importance of the Thach Khe iron ore project, the biggest of its kind in Southeast Asia.
According to Dung, there were several shortcomings during the implementation of the project, including poor management and overly-slow sourcing of capital.
In order to deal with capital shortages, the PM requested four out of nine shareholders in the Thach Khe Iron Ore Joint Stock Company (TIC), to withdraw from the project. These shareholders include the Vietnam Post and Telecommunications Group (VNPT), Song Da Group, the Bank for Investment and Development of Vietnam (BIDV), and the Vietnam Shipbuilding Industry Group (Vinashin).
Remaining shareholders must contribute capital to the project according to their commitments as soon as possible, the PM demanded.
TIC was required to hasten the compiling of investment reports for two projects, including Thach Khe iron ore sorting and a steel ingot production plant with an annual capacity of two million tonnes.
The Government would take into account the restructuring of TIC after approving these two projects, Dung noted.
The PM asked TIC to stop work on uncovering the Thach Khe iron ore mine due to the investor’s difficulties in raising capital, investing in technology and carrying out an environmental impact assessment.
TIC would however be allowed to sell all iron ore mined during in the initial phase of the open mine to domestic steel ingot producers to boost its financial capacity.
He also requested the investor to co-ordinate with local Ha Tinh Province authorities to complete site clearance compensation in order to help stabilise the lives of locals in the six communes within the project’s site in Thach Ha District.
Positive effects
Ho Duc Binh, TIC General Director told DTiNews that the PM’s guidance would greatly affect the company’s decisions.
TIC General Director Ho Duc Binh
“We plan to organise a shareholders meeting in the near future following the Prime Minister’s intervention. As the PM has not assigned any specific enterprises to take over the stakes of the four partners that are withdrawing, the five remaining shareholders may have to share the responsibility,” Binh said.
TIC leaders will take drastic measures to require shareholders to complete their capital contribution commitments. To date, they have contributed nearly a combined VND1 trillion (USD48.37 million) of the expected VND2.4 trillion (USD116.11 million).
Binh was very happy with the news that the company could sell ore exploited during the initial phase of the project. He estimated that the firm would collect around one million tonnes of iron ore, worth VND1 trillion (USD48.37 million).
However, he said that the collection of the ore could cost around VND100 billion (USD4.83 million).
The company will seek Government approval to extend the deadline for further work on the Thach Khe open-cast iron ore mine as around 900,000 out of the 11.5 million cubic metres of soil had yet to be uncovered, he added.
Thach Khe iron ore mine covers an 38-square-kilometre area across six communes in Ha Tinh Province’s Thach Ha District. The mine has estimated reserves of around 544 million tonnes.
TIC was established in May 2007 with chartered capital of VND2.4 trillion (116.11 million). TIC has nine main shareholders, including Vinacomin that has a 30% stake, the Ha Tinh Mineral and Trade Corporation (24%), the Vietnam Steel Corporation (20%), BIDV (5%), Song Da Corporation (5%), Vinashin (5%), VNPT (4%), the Binh Minh Import-Export Company (4%) and Thang Long Mineral and Metallurgy Company (3%).