Ninh Thuan seeks new investor for US$9.8-billion steel project

HCMC – The central province of Ninh Thuan has said it is seeking a new investor to replace Lion-Vinashin joint venture to continue a US$9.8-billion steel mill project in Ninh Phuoc District, according to a document issued by the provincial government.

The document says the joint venture between Maju Stabil Shd of Malaysia’s Lion Group and Vietnam Shipbuilding Industry Group, or Vinashin, got an investment certificate in November 2008, but has not made a move on the Ca Na still project due to problems with financial capability and experience.

“By this time, the province has good reason to take back the investment certificate from Lion-Vinashin joint venture at any time, and we are finding another investor, particularly from foreign countries with enough experience and financial capacity, to continue the project,” said Nguyen Kim Hung, director of Ninh Thuan’s Department of Industry and Trade.          

Hung told the Daily on the phone on Tuesday that if a new investor agreed to replace Lion-Vinashin venture, the provincial government would ask the Prime Minister and the Ministry of Industry and Trade for approval to transfer the investment certificate to the new investor.          

Hung said the province wanted Posco Group from South Korea to be the new developer of the project, but Posco had not responded. “Some other large investors have also come to express their interest but no deal has been finalized,” he added.

The province has also asked the Ministry of Industry and Trade to introduce other competent, experienced and prestigious investors to get involved in the project.          

Earlier, the Government agreed to include Ca Na steel project into the nation’s master plan for steel development. Given that, Ninh Thuan set aside 1,650 hectares of land in Ninh Phuoc District for the project.          

The director of the industry department of Ninh Thuan also said the province was still working on site clearance for some 1,000 hectares of land to make room for the new investor.

Ca Na steel project has total production capacity of 4.5 million tons of steel a year, and comprises other important components such as a 700MW thermo-power plant, a 15 million tons/year seaport, a lime oven, an oxygen production factory and some other works.

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Gov’t orders check on Guang Lian steel project

HCMC – Deputy Prime Minister Hoang Trung Hai has told the Ministry of Industry and Trade to check the ability of mobilizing investment capital for Guang Lian Dung Quat steel project.

The order comes after the project developer proposed expanding the designed production capacity from five million to seven million tons a year.

According to a document issued by the Government Office, Hai also required the industry and trade ministry to check the product lines of this large project and report the results to the Government within this month.

An official of the Vietnam Steel Association (VSA) told the Daily on Monday that it was necessary to carefully scrutinize whether the project developer could raise as sufficient capital as needed to ensure the viability of the long-delayed project.

The project has been underway for over four years but has turned out no steel products.  

Guang Lian Steel Vietnam Limited Company as developer of the project in the central province of Quang Ngai has asked the Government and relevant ministries to allow it to raise the production capacity.

The output adjustment will send the total cost of the project in Dung Quat Economic Zone rising to US$5 billion from the previous US$3.5 billion, the official of VSA said. “The project has changed hands four times so far.”

The steel association official said the proposal for scaling up the capacity of the project could be seen as a time-buying tactic as the investor had difficulty mobilizing enough capital for the project.

The official, who declined to be named, said the association also petitioned the Government to ask Quang Ngai Province to set a deadline for the developer to finish the whole project; otherwise, the investment license would be revoked.

The official described the proposal of Guang Lian Steel Vietnam Limited Company as irrational. The investor wanted to increase steel production by two million tons a year, but they suggested boosting their annual processing capacity by only 500,000 tons of cast iron as the main material.

Dung Quat Economic Zone Authority says on its website that while waiting for approval for expanding the production capacity at the steel mill, piling work is still taking place so that factory construction can start early next year.

The authority said Guang Lian steel project was licensed in 2006 and that the groundbreaking ceremony took place a year later.

According to the newly-proposed plan of Guang Lian Steel Vietnam, construction of the first phase is scheduled to finish in late 2013 and the steel mill would be up and running after that.

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