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VIR-news
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Quy Xa iron ore mine to be assessed
Update: 20-7-2004
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The government has given the green light for Vietnam Steel Corporation and China’s Kun Ming Steel Group to study an iron ore mining reserve in Quy Xa in northern province Lao Cai.
An official contacted by Vietnam Investment Review said Vietnam Steel Corporation (VSC) planned to meet the Chinese group and the Lao Cai provincial authority by the end of this month to discuss cooperation details including investment and production capacity.
“We can not say much about the cooperation except that we expect it will help us develop the Quy Xa project, which has been left idle for years,” said the official.
Initial studies show Quy Xa mine could have hefty reserves of up to 120 million tonnes of iron ore.
The official said VSC’s plan could exploit between 1.5 and 2.5 million tonnes of iron ore for domestic steel production and exports per year.
The required investment capital is believed to be somewhere between $40 and $60 million for the project.
“Money is not the problem behind the delay of Quy Xa, actually a lack of demand for iron and an underdeveloped infrastructure including transport routes are the major deterrents,” said the official.
He said the annual transport capacity of Hanoi-Lao Cai railway system was presently 1.2 million tonnes per year, and the system was principally reserved to transport apatite – the mineral used to produce nitrogen fertiliser – from Lao Cai to Hanoi.
“China has begun construction of a two million-tonne steel factory near the border, close to Lao Cai province, and so they need to import a huge amount of iron ore for processing. Therefore, the question of ‘marketable’ output for Quy Xa will be validated,” said the official.
To improve infrastructure facilities for the Quy Xa development, VSC has proposed the government increase the transport capacity of the Hanoi - Lao Cai railway system to two to three million tonnes per year.
To upgrade the transport capacity will require an estimated $120-150 million investment.
VSC is also accelerating a project to develop the Thach Khe mine in Ha Tinh province – site of one of the country’s largest iron ore reserves.
The VSC official told the Vietnam Investment Review the initial feasibility study of the Thach Khe project had recently been completed and would be delivered to the relevant governmental agencies for consideration shortly.
“We expect a study of Thach Khe would win government approval before the end of this year,” said the official.
Development of Thach Khe will include iron ore exploitation at Thach Khe mine, and construction of a steel plant with an annual production output of 4.5 million tonnes in Ky Anh district.
A sea port capable of handling vessels of up to 100,000 dead weight tonnes will also be constructed as part of the project.
The Thach Khe deposit was discovered by Russian and Vietnamese geologists in the 1960s.
It was estimated then Thach Khe had iron ore reserves of some 500-600 million tonnes, at least 300 million tonnes of which were thought to be commercially exploitable.
Earlier this year, Taiwan’s Sunsteel Corporation expressed interest in the Thach Khe project.
The investor is now waiting for government approval to invest $1 billion in mining Thach Khe, from where it expects to exploit 18 million tonnes of iron ore per year.
Sunsteel said it may start trial mining in a part of Thach Khe deposit next year if the government approves.
Sunsteel hopes to use the iron for operating a one million tonne steel factory in Binh Duong province and 500,000 tonne billet steel factory in Dong Nai province, which is under construction.
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By Hoang Mai
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