Lam Dong Aluminium-Bauxite complex posts trillions in losses

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Báo Dân Trí English - 5 month(s) ago 4 readings

Results at Lam Dong Aluminium-Bauxite Complex show that the complex has incurred a loss of nearly VND3.7trn (USD162m) after three years of operation, according to an anonymous Dan Tri/DTiNews source.

Results at Lam Dong Aluminium-Bauxite Complex show that the complex has incurred a loss of nearly VND3.7trn (USD162m) after three years of operation, according to an anonymous Dan Tri/DTiNews source.

Lam Dong Aluminium-Bauxite complex posts VND3.7trn (USD162m) in losses

According to Dan Tri/DTiNews' source, an inspection has been carried out at Lam Dong Aluminium-Bauxite Complex and the conclusion is that it had not been effective and investment costs had increased much higher than estimated.

The initial investment for the project in 2006 was VND7.7trn (USD337m) and was expected to be completed in 2009. The complex is expected to produce 600,000 tonnes of alumina per year and would increase its output to 1.2 million tonnes by 2015.

However, after four adjustments, this figure had ballooned to VND15.4trn (USD805m) and the deadline was pushed back to 2013. Since 2014, Vinacomin has completed the main project and started building support constructions, including a red mud reservoir.

The cause is because the complex's capacity was increased to 650,000 tonnes per year, while the technology and tax policies were changed and wages increased, compensation for ground clearance was also adjusted. Inflation, lack of experience by investors and contractors could also have been contributory factors in making the investment increase.

From October 2013 to September 2016, the complex posted losses of VND3.7trn (USD162m). Business and production loss totalled VND2.5trn and losses caused by changes in the exchange rate reached VND1.17trn. The project's delay and adjustments were also blamed for the losses. In addition, falling aluminium prices and the increasingly high taxes had added to the losses.

However, the project's operation has stable now and it is estimated that the project will recoup the losses this year.

The Nhan Co Aluminum Factory project was approved in 2007 and scheduled to be completed in 2010. However, it also went through three adjustments. Costs increased from VND3.2trn to VND16.8trn and the completion date was changed to 2014 because the factory's capacity had increased from 300,000 to 650,000 tonnes per year.

Construction was halted for two years for re-examination of its effectiveness because of exchange rates, compensation for ground clearance and inflation.

Last year, Dak Dao Stream in Dak Nong Province was polluted by alkaline substances from Nhan Co alumina plant.

It went into pilot operation and will go into commercial operation within the first quarter.

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