The world’s fourth largest steel maker Kobe Steel is still waiting for acquiring a stake in Vietnam’s largest iron ore deposit before it can start construction of its mega project in central Nghe An province.
“Since the $1 billion iron nugget manufacturing facility was relocated from Hoang Mai Industrial Park to Dong Hoi Industrial Park a year ago, it remains standstill,” said Phan Xuan Hoa, deputy director at Nghe An South East Economic Zone Authority.
In March 2010, Kobe Steelwas licenced to develop the 2.4 million tonne steel facility. The production at this plant would use the next-generation ITmk3 iron-making process that the firm developed. A Kobe Steel representative told VIR that: “Kobe Steel wants to use iron ores from Thach Khe deposit in central Ha Tinh province to produce nuggets. To do that, it needs to hold a stake in this deposit.”
He said Prime Minister Nguyen Tan Dung had approved Kobe Steel’s proposal to take part in Thach Khe Iron Joint Stock Company (TIC) to exploit iron ores at 544 million tonne Thach Khe deposit. “Kobe Steel is still waiting for the Ministry of Industry and Trade’s (MoIT) direction on capital contribution,” said the representative.
Established in May 2007, TIC had nine shareholders - Vinacomin (30 per cent), Mitraco (24), Vietnam Steel Corporation (20), BIDV (5), Song Da Group (5), Vinashin (5), VNPT (4), the Binh Minh Import-Export (4) and Thang Long Mineral and Metallurgy (3). Last year, Vinacomin decided to buy out Vinashin, Song Da and VNPT’s stakes while domestic steel maker Hoa Phat replaced BIDV in TIC.
A senior MoIT official told VIR that foreign investors’ participation in TIC including Kobe Steel’s would be taken into account after TIC’s restructuring plan, already submitted to the prime minister, was approved. Preparations for mining works at Thach Khe deposit stopped in mid-2011 due to this restructuring plan.