A production line at Trai Cau iron mine in Thai Nguyen Province. The Viet Nam Steel Association recently proposed that the export of iron ore be halted in order to ensure the adequacy of raw materials available for domestic production. — VNA/VNS Photo Ha Thai

HA NOI (Biz Hub)— The Viet Nam Steel Association (VSA) recently proposed that the export of iron ore be halted in order to ensure the adequacy of raw materials available for domestic production.

The association said that several furnaces had been forced to stop due to a shortage of ore.

There are 14 furnaces in the country, with a total production capacity of 3.8 million tonnes of cast iron per year. However, output last year reached only 500,000 tonnes.

Next year the demand for iron ore from the Viet Nam Steel Corporation alone is estimated at 2.2 million tonnes, about 820,000 tonnes of which will need to be bought from outside sources.

In response to the VSA's proposal, the Ministry of Industry and Trade said that the export of iron ore was aimed at clearing high inventories and tackling difficulties facing enterprises, according the Viet Nam Economic Times newspaper.

Due to the country's current economic difficulties, the Government deemed the policy of allowing the export of iron ore to be appropriate.

The ministry said that many furnace building projects in the country have fallen behind schedule, resulting in an imbalance between mining output and consumption capacity in the domestic market.

They added that if domestic steel producers committed to collecting all inventories of iron ore in the country, then the exporting would be stopped.

Currently, iron ore from mines in over ten provinces are already reserved for domestic production.

To limit the export of iron ore, the export tax has been increased to 40 per cent. — VNS