VietNamNet Bridge – Japanese-owned Kobe Steel, one of the world’s largest steel makers, has been left waiting for the details of Vinacomin-backed Thach Khe iron mining project to be clarified before making a decision to invest.

According to a report compiled by Ha Tinh People’s Committee, the Ministry of Industry and Trade ordered the mining project’s owner Thach Khe Iron Joint Stock Company (TIC) and its largest stakeholder Vinacomin to approve an adjusted plan for the project in February. The new plan specifies the mine will increase iron ore exploitation from five million to seven million tonnes.

In addition, Vinacomin and TIC have to require all stakeholders to contribute VND2.4 trillion, or $114 million at the current exchange rate, for its registered capital. Vinacomin currently holds a 49 per cent stake in TIC.

If the stakeholders fail to contribute enough registered capital, TIC could invite Kobe Steel in, as the Japanese steel maker received the green light last August from the government to engage in Thach Khe iron ore mine.

“Vinacomin has yet to issue any documents approving the adjustment in registered capital, which would allow TIC to get on with implementing the project,” Ha Tinh People’s Committee commented in the report.

The delays have left Kobe Steel’s plans for Thach Khe mine on hold.

Located in central Ha Tinh province, Thach Khe is estimated by geologists to hold iron ore reserves of some 500-600 million tonnes, at least 300 million tonnes of which are thought to be commercially exploitable.

Kobe Steel wants to invest in the iron ore mine to ensure raw material supplies for its $1 billion factory in Nghe An, which has been delayed while awaiting approval for investment in TIC.

The factory will produce and market 2.4 million tonnes of iron nuggets per year. Kobe Steel also said that production at the plant would use the next-generation ITmk3 iron making process.

Once operational, Kobe Steel’s plant will contribute to meeting rising demand for iron. Vietnam is largely dependent on importing scrap and semi-finished steel products to meet its requirements.

Kobe Steel has already signed a memorandum of understanding with Vinacomin for providing finance and technology to this mining project if it invests in TIC. Kobe Steel has also agreed to co-operate with TIC on construction of an iron refinery in Ha Tinh with total annual capacity of two million tonnes.

TIC’s stakeholders currently include Vinacomin with 49 per cent; Vietnam Steel Corporation with 20 per cent, Ha Tinh Mining and Trading Corporation 24 per cent, Bitexco 4 per cent and Thang Long Mineral 3 per cent.

Source: VIR