VietNamNet Bridge - While the Ministry of Industry and Trade (MOIT) wants to resume exploitation of Thach Khe, the largest iron mine in South East Asia, after eight years of interruption, Ha Tinh provincial authorities are reluctant to do so.

Local authorities are hesitant to develop the project due to doubts about raising capital. To date, shareholders have contributed VND1.809 trillion in charter capital, which means VND244 billion more is needed. 

Of the five shareholders, only Vinacomin has contributed the committed capital. Mitraco, one of the shareholders, has said it would withdraw from the project.

Meanwhile, it is estimated that the project needs VND14.5 trillion, including VND7 trillion for the first phase.

According to Ha Tinh provincial authorities, Thach Khe Iron JSC has contacted domestic and foreign banks, but it has not received any official agreement on loans. 

Meanwhile, nearly all the VND1.809 trillion contributed has been disbursed for the project.

However, Truong Thanh Hoai, director of the Heavy Industry Department, said the ministry has submitted to the government a plan to restructure shareholders.

Regarding the three shareholders which have not contributed enough capital, certain shareholders will be asked to transfer their capital contribution to others. MOIT does not intend to prolong the capital contribution process, he said. Vinacomin is considering contributing more capital.

MOIT is also considering calling for capital from private investors, such as Hoa Sen and Hoa Phat Group.

“They (private investors) have money, and if they contribute capital, they would be in charge of consuming the iron ore to be exploited, which will ensure the feasibility of the project,” he said.

While the Ministry of Industry and Trade (MOIT) wants to resume exploitation of Thach Khe, the largest iron mine in South East Asia, after eight years of interruption, Ha Tinh provincial authorities are reluctant to do so.

The iron consumption capability is also a concern for Ha Tinh provincial authorities. 

Vinacomin has asked for the PM’s decision to delay implementation of a 2 million ton per annum ingot steel project, which would use iron ore from Thach Khe. 

Ha Tinh fears that the iron ore from Thach Khe may not sell well because of limited domestic demand.

The ore exploited in Vietnam is mostly provided to Hoa Phat, Thai Nguyen and Viet Trung steel mills. Some mining companies have recently asked for permission to export iron ore in inventory.

An analyst said that it was not by chance that MOIT has decided to restart Thach Khe mining. A series of large blast-furnace steel projects such as Ca Na and Dung Quat are also being considered.