Deputy Prime Minister Hoang Trung Hai has instructed relevant agencies on measures to mobilize capital for an exploitation project of the country’s largest iron ore mine in the central province of Ha Tinh.
|On the construction site of Thach Khe iron ore mine in Ha Tinh (Photo: SGGP)|
He ordered the Ministry of Industry and Trade to guide shareholders of the project’s investor to change their capital contribution rates if they fail to sufficiently provide their parts by July 15.
In case these changes are still unable to mobilize enough capital, the Vietnam National Coal and Mineral Industries Group (Vinacomin) would raise their contribution level which will be considered by the Ministry of Industry and Trade.
The Thach Khe iron mine exploitation project was invested by Thach Khe Iron Company (TIC) that was established in 2007 with a total chartered capital of VND2.4 trillion.
The project aims to dig and process iron ore from the mine to supply local steel mills and exports. Afterwards, a steel billet plant will be built to use this material source.
Its implementation has been scheduled in nine years. Exploitation capacity is expected to reach five million tons a year in the first seven years and increase to 10 million tons in the next two following years.
The project was started in September 2009 with a total capital of VND14 trillion (US$642 million). Of these, 30 percent comes from shareholders and 70 percent from other sources.
Nine initial shareholders include Vinacomin, Ha Tinh Minerals and Trading Company, Vietnam Steel Corporation, Vietnam Posts and Telecommunications Group (VNPT), Song Da Corporation, the Bank for Investment and Development of Vietnam, Vietnam Shipbuilding Industry Corporation (Vinashin), Binh Minh Export Import Production Company and Thang Long Mineral and Metallurgy Company.
They contributed only VND221.5 billion instead of VND1.3 trillion as per commitments in 2010.
Mid 2011, the Prime Minister instructed four large shareholders including VNPT, Song Da, BIDV and Vinashin to withdraw capital from TIC to focus on their main fields.
Thach Khe is the largest iron ore mine in Vietnam locating eight kilometers northeast of Ha Tinh city and 66 kilometers from Vung Ang Seaport. It was spotted in 1960 with a reserve of 544 million tons.
Authorized agencies calculated that exploitation output will reach 370-400 million tons.
The project is expected to make Ha Tinh among the country’s largest heavy industry centers and biggest steel exploitation and production centers.