JFE Group of Japan has announced it has cancelled its investment in the US$3-billion Guang Lian steel plant project at Dung Quat Economic Zone in central Quang Ngai Province.— Photo Vnexpress

HA NOI (Biz Hub) — JFE Group of Japan has announced it has cancelled its investment in the US$3-billion Guang Lian steel plant project at Dung Quat Economic Zone in central Quang Ngai Province.

Vo Tien Dung, deputy head of the zone management board, confirmed this to Viet Nam News, saying the huge investment involved and the bleak outlook for the global steel market were the apparent reasons behind the decision of JFE, one of the world's largest steel producers.

E-United Group of Taiwan, the remaining investor will work with provincial authorities on project implementation tomorrow, Dung added.

According to Dung, E-United has two options. If it wants to continue developing the plant, it has to make a commitment on the plant's specific construction process. If it does not, the province will consider to refund its investment costs, reportedly worth $50 million to date.

The project was licensed in 2006 with a budget of more than $1 billion. Its investment certificate was amended four times, with the registered capital eventually rising to $3 billion.

Upon completion, the plant, envisioned to be one of the zone's two largest projects, will make use of blast-furnace technology and will have a capacity of three million tonnes in the first phase and five million tonnes in the second phase.

Baodautu.vn reported that in 2012, JFE signed an agreement to conduct a feasibility study on the project with E-United Group, which has a 90-per cent stake in the project.

JFE's participation was supposed to accelerate project implementation, and the Government was set to approve the investor's petition to raise its investment capital to $4.5 billion, the on-line newspaper said. —VNS