State-run Vietnam Steel Corp (VSC) has lodged an application to establish a new US$175 million venture to tap into the Quy Xa iron deposits and construct a large-scale billet factory in the border province of Lao Cai.
Nguyen Phuc, a planning official from VSC, said the Viet-Trung project would comprise of VSC, Lao Cai Mineral Co and Kunming Steel Holdings.
Local investors will contribute a 55% stake in the venture, with VSC providing 45% and Lao Cai Mineral Co 10%.
“We have received strong support from the central government, as this is the first iron-mining project in the country. We hope to receive an investment licence soon, in order to commence construction work in Quy Xa early by 2006,” said Phuc.
Phuc told Vietnam Investment Review that the development of the Quy Xa complex, which includes mining work and the construction of a 500,000-tonne billet factory, would be carried out over different phases, and is scheduled for completion in 2015.
Initial findings from a study show that the Quy Xa deposit contains 120 million tonnes of iron ore reserves.
VSC plans to exploit around 1.5 million tonnes of iron ore per year by 2008, and between 2.5 and three million tonnes annually during the latter phases.
The iron ore will be reserved for domestic steel production and export to China in exchange for coal.
Phase two of the project will see the construction a billet-making factory in Tang Loong Industrial Park by 2010, supplying 500,000 tonnes of billets per year -the raw material used to produce construction steel.
In order to support the project’s development, Phuc said the Lao Cai government will commence work on a new bridge linking the province with China, and supply the venture with adequate transportation means and infrastructure.
Roads and railway lines between Hanoi and Lao Cai will be also be upgraded to assist in the transportation of materials.
VSC is also currently working on the Thach Khe mining project in central Ha Tinh province, an undertaking which is 10 times the size and scale of the Quy Xa venture.