Kobelco company of Kobe Steel Group has been approved to invest in Thach Khe Joint Stock Company. Photo dantri.com.vn

HA NOI (Biz Hub) — Deputy Prime Minister Hoang Trung Hai has approved a proposal from the Ministry of Industry and Trade allowing the Kobelco company - a subsidiary of Japan's leading Kobe Steel Group - to invest in Thach Khe Iron Joint Stock Company (TIC) in the central province of Ha Tinh.

Kobelco's contribution to the total investment will be decided after forthcoming negotiations, Nguyen Manh Quan, head of the Heavy Industry Department under the Ministry of Industry and Trade, told Vnexpress.net.

"The government has asked TIC to meet the new investors and report their impressions to the Ministry and the People's Committee of Ha Tinh Province before September 30. After that, the new investors will determine their investment rates," he said.

The Thach Khe iron mine project has been delayed due to shortages in its shareholders' investment capital. A TIC report showed that Viet Nam National Coal - Mineral Industries Holding Corporation Limited (Vinacomin) injected nearly VND19.5 billion (nearly US$929,000) to help the company out of financial difficulty in the first quarter of this year.

The report also said that other shareholders have not contributed their full VND1.210 billion investment ($57.6 million), equivalent to 45 per cent of the charter capital of the company.

The Ministry of Industry and Trade has urged Vinacomin and other shareholders to contribute money quickly so that the company has enough charter capital to run its operations.

TIC was founded in May 2007 with charter capital of VND2.4 trillion ($114.28 million) contributed from nine shareholders: Vinacomin (30 per cent), Ha Tinh Trading and Minerals Corporation (Mitraco, 24 per cent), Viet Nam Steel Corporation (20 per cent), Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV, five per cent), Song Da Corporation (five per cent), Viet Nam Shipbuilding Industry Group (Vinashin, five per cent), Bitexco Group (four per cent), Viet Nam Post and Telecommunications Group (VNPT, four per cent) and Thang Long Minal and Metallurgy Company (three per cent).

However, in July 2011, Prime Minister Nguyen Tan Dung asked VNPT, Song Da Corporation, BIDV and Vinashin to remove their investment out of the project to focus on their main business operations.

According to Dau Tu (Investment) newspaper, a news source from the Ministry of Industry and Trade revealed that the investment withdrawal of the four shareholders finished at the end of 2012 and Vinacomin would replace these shareholders to contribute to the charter capital.

Kobelco was previously approved to work on a project building a factory with an investment of $1 billion, which would have produced two million tonnes of iron nuggets, at the Hoang Mai Industrial Zone in central Nghe An Province's Quynh Luu District.

Howver, Phan Xuan Hoa, deputy head of Nghe An South-east Economic Zone management board, said that the project was abandoned.

Thach Khe is considered to be the largest iron mine in the Southeast Asia. It is located eight km northeast from central Ha Tinh City. It is estimated that the total amount of iron at Thach Khe mine is as much as 400 million tonnes. — VNS