A view of Van Loi Steel Mill located in Vung Ang No.1 Economic Zone. — Photo nld.com.vn
The Van Loi Steel Mill, a VND1.8 trillion (US$ 79 million) steel plant in the central province of Ha Tinh, has been offically closed down due to prolonged financial problems.
A member of Ha Tinh Economic Zone’s management board was quoted by Lao Đong (Labour) newspaper as saying on December 20 that they have revoked the project’s investment certificate.
Van Loi Steel Mill occupies around 25 hectares of Vung Ang No.1 Economic Zone. It received its investment certificate in 2007, but work at the factory has been suspended for nearly six years now. The plant was supposed to specialise in refining steel and was to have a capacity of 250,000 tonnes per year in the first phase of the project and 500,000 tonnes per year in the second phase. It was scheduled to produce its first batch in August 2010, but because of financial problems, the project got stalled in 2010.
Ha Tinh Steel JSC, the investor, admitted that it cannot implement the project as committed.
In 2015, Ha Tinh Steel JSC Director Ho Van Dung said the company owed banks money to the tune of more than VND750 billion, and that the machines and equipment imported a decade ago had rusted and were damaged.
After Van Loi Steel Mill suspended operations, the VND158 billion Vu Quang steel production factory, which was set up in 2008 to provide iron ore to Van Loi Steel Mill, halted operations in 2012 as the raw steel produced cannot be used. More than 100 workers of the factory lost their jobs then.
The Vu Quang factory had begun operations in 2009 and had the capacity to produce 500,000 tonnes per year.
Another project in the province - to exploit Thach Khe ore mine, which has the largest reserves in Southeast Asia - has been similarly suspended since 2011 because of capital shortage.
The mining project, which kicked off in 2009 and required a total investment of VND10 trillion, was managed by Thach Khe Iron JSC. The mine, with an estimated total reserve of 544 million tonnes of ore, was expected to become a sound supply source for the country in the next five years, producing 10 million tonnes a year. However, two years later, this project ground to a halt, too.
Ha Tinh province officials had held a meeting to discuss the matter and prepared documents to submit to the government. — VNS