The future of Thach Khe mine in Ha Tinh, where Kobe Steel’s unmoving Nghe An project expects to source ore for steel production, has become unclear thanks to financial troubles.
Thach Khe Iron JSC (TIC) was established nine years ago with the purpose of investing into and exploiting Thach Khe mine, dubbed the biggest iron ore mine in Southeast Asia. Since the company’s establishment, many original shareholders have withdrawn or refused to submit their committed capital volume. As a result, the company has yet to be able to start operation.
According to its latest report, Vinacomin has put in the whole committed VND1.076 trillion ($48.25 million) capital. The other shareholders, namely Thang Long Minerals and Metals Co., Ltd., Ha Tinh Minerals and Trading JSC, Vietnam Steel Corporation (Vnsteel), and Bitexco, either failed to put in capital at all or did not put in the committed amount. The total amount currently in the project is VND1.8 trillion ($80.7 million).
According to Truong Thanh Hoai, director of the MoIT's Heavy Industry Department, the project needs another VND7 trillion ($310 million) to start.
Vinacomin is requesting permission from the MoIT, which represents the state’s stake in the company, to put more capital into TIC, so that the project can start again. However, according to Hoai, Vinacomin itself is not entirely financially capable.
“Vinacomin currently has a large inventory and is itself not in an easy situation. If it could solve its own problems, then the MoIT would consider permitting the capital contribution,” Hoai said in a recent interview with newswire Bizlive.
Hoai said that many investors have expressed interest in joining the project, but they all vied for a controlling stake. The MoIT, meanwhile, does not want a controlling shareholder for the project.
On the other hand, leaders of Ha Tinh are concerned about the potential environmental impact of the project. Most recently, the provincial Party Committee proposed to the Central Committee that the project stay inactive for a while longer.
Hoai said the MoIT is going to work with the province to keep them informed and assure them that the mine is not going to harm the environment.
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By Ha Duy