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PM halts $10.6bn steel plant

Released at: 20:30, 17/04/2017

PM halts $10.6bn steel plant

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Further studies needed on demand and environmental impact of Ninh Thuan project, Prime Minister said in statement.

by Anh Duy

Prime Minister Nguyen Xuan Phuc has halted work at a $10.6-billion steel plant that had previously been vouched for by the Ministry of Industry and Trade, calling for more studies to be conducted into demand and environmental impacts.

A statement from the Office of the Government cited Prime Minister Phuc as saying that preparations for the Ca Na steel plant in the south-central province of Ninh Thuan had been too “hasty”.

He said the parties involved should look at domestic and overseas demand as well as material supplies and available infrastructure to decide on the scale and development timeframe for the project.

They also need to assess the technology and possible environmental impacts to prevent a disaster similar to the one caused by Taiwan’s Formosa, he said in the statement.

“This project was proposed following the Formosa scandal and is very sensitive,” the Vietnamese leader said, referring to the wastewater spill that polluted 200 km of coastline in April last year.

The incident, considered Vietnam’s worst ever environmental catastrophe, devastated sea life and local economies dependent on fishing and tourism in north-central Ha Tinh province as well as the nearby central provinces of Quang Binh, Quang Tri and Thua Thien Hue. The Ministry of Natural Resources and Environment said it could take the region a decade to completely recover from the disaster, while experts predict it may set Vietnam’s economy back for years.

Prime Minister Phuc said the Ca Na project can proceed if studies prove it is viable.

The Hoa Sen Group, one of Vietnam’s largest steelmakers, announced plans in April last year to revive the mothballed project, which was first given to State-owned shipping giant Vinashin and Malaysia’s Lion Group in 2008, but the license was revoked three years later after the foreign investor pulled out.

The company plans to build a complex of more than 1,700 ha and produce 16 million tons of steel a year. The project has not been officially licensed but the Ministry of Industry and Trade included it in a national steel development plan, without naming the investors.

Officials argued that the country is still importing a large quantity of steel to meet domestic demand, despite a rich supply of iron ore. Vietnam imported 18.4 tons of steel worth more than $8 billion in 2016, up 18.4 per cent in volume from the previous year, according to customs data.

Minister of Industry and Trade Tran Tuan Anh said at a meeting with national legislators in November that steel plants will be not be built at the cost of environment and development is not motivated by “group interests”.

Hoa Sen is a leading steel maker not just in Vietnam but in Southeast Asia. In Vietnam, it has a 40 per cent share of the sheet steel market and 20 per cent of the steel pipe market. The 16-year-old company exports its products to 65 countries and territories.

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