1. According to the

Government Inspectorate, the suspension of quarries in Ba Ria – Vung Tau, for a
long time has caused millions of USD of losses for Vietnam.

Conflicts in stone
mining in the southern province
of Ba Ria – Vung Tau,
between investors and the state-owned Vinaconex Mineral Company have existed
for over ten years. Consequently, quarries there have been closed for a long
time, causing great losses for the state, society, miners and thousands of
workers.

According to
VietNamNet’s investigation; during the 1996-1998 period, the Ba Ria – Vung Tau
Mineral Company, which was renamed as Vinaconex Mineral Company, a subsidiary
of the State Capital Investment Corporation (SCIC), was permitted by the
Ministry of Industry to mine five quarries in Ba Ria- Vung Tau. These quarries
include three construction stone and two Puzzolan stone mines, totaling 150
hectares.

The capital to
explore the five quarries is VND55.78 billion (around $7 million), according to
a decision of the local authorities. According to the Mining Law, to get a mining
license, a mining company must have legal capital that is equivalent to at
least 30 percent of the exploration capital. In this case, the Vinaconex Mineral
Company must have VND16.7 billion of legal capital. However, the firm still got
the mining license though it did not have enough legal capital.

In lacking capital,
this company had to sign business cooperation contracts with seven private
companies to mine five quarries.

Under these
contracts, the Vinaconex Mineral Company is only responsible to get licenses,
drill and set off mines but it earns up to 12-17 percent of turnover. To earn
the remaining turnover, partners have to invest in exploration and mining
activities.

In 2000, conflicts
between the Vinaconex Mineral Company and its partners boomed. Partners
complained that they could not pay for Vinaconex in time, due to difficulties
in selling products. Vinaconex, therefore, did not drill and explode mines,
resulting in production standstill. Quarries had to close.

Vinaconex’s
partners petitioned the government in 2001. The Government Office has several
times informed the Prime Minister’s instruction to equitize Vinaconex, but this
company has not implemented the instruction.

According to the
Government Inspectorate, five quarries in Ba Ria – Vung Tau has closed for many
years, causing heavy losses, because the Ministry of Industry (now the Ministry
of Industry and Trade) violated the Mining Law in granting mining licenses to
Vinaconex, and Vinaconex does not perform equitization under the Prime
Minister’s instruction.

Deputy Prime
Minister, Truong Vinh Trong has asked relevant agencies to put an end to this
case and report the result to the government by June 2011.

Trung Thanh