Ministries at odds over fate of Thach Khe iron mine

Ministries at odds over fate of Thach Khe iron mine

Ngoc Lan

HANOI – The Ministry of Industry and Trade has insisted on continuing Thach Khe iron ore mining project while the Ministry of Planning and Investment has proposed suspending it.

The Ministry of Planning and Investment on July 13 wrote to the Prime Minister proposing that the country’s largest iron mining project in Ha Tinh Province be suspended due to low commercial viability. Months earlier, the government of Ha Tinh Province had also sent a petition to central agencies suggesting that the project be put on hold due to impacts on environment and poor business performance. 

The Ministry of Planning and Investment in its document said that if the project is canceled as proposed, an interdisciplinary team should be set up to proceed with the liquidation process, including the settlement of financial problems and half-done construction components after an overall assessment. 

The interdisciplinary team will be led by the ministry, and is comprised of representatives of Ha Tinh government, Vietnam National Coal and Mineral Industries Group (Vinacomin) and Thach Khe Iron Company (TIC).

After receiving the Ministry of Planning and Investment’s document, the Government Office asked related ministries, including the Ministry of Industry and Trade, to give their feedback.

According to the Ministry of Industry and Trade, the Ministry of Planning and Investment failed to provide a scientific rationale for suspending the project. A halt should be carefully weighed as it would affect the business environment of Ha Tinh Province and that of Vietnam as a whole.

Besides, there should be detailed assessments on the project’s contribution to the country’s economic development, gross domestic product (GDP) growth and trade deficit reduction, as well as social security and order.

The Ministry of Industry and Trade cited a report released by TIC in March 2017 as saying that the project’s investment cost has been revised down from over VND14.5 trillion (about US$639 million) as approved to nearly VND12.2 trillion, while the period required to recoup the investment has been shortened from 9.5 years to 7.5 years.

In addition, the project would bring huge profit from by-products, including about 80 million cubic meters of clay to make bricks, 280 million cubic meters of sand and pebbles and hundreds of millions of cubic meters of crushed stones for construction that might help prevent overexploitation of sand from rivers. 

Fresh waster collected from the mining process can be used for agricultural and industrial production and daily life after treatment.

In a report submitted to the Prime Minister in February 2017, the Ministry of Industry and Trade said TIC has enough financial capacity to resume the project and ensure sustainable production and consumption of products.

In regard to environmental protection, the ministry has given solutions to deal with landslides and response to other environmental incidents.

Since the project was kicked off ten years ago, major shareholders of TIC have failed to contribute enough capital to ensure the project’s stable operation.

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