VietNamNet Bridge – The fact that the shareholders of Thach Khe iron
super project have been slow in contributing capital has seriously affected the
project implementation.

On April 13, the Ministry of
Industry and Trade had to gather a special meeting to discuss the restructuring
of capital contribution to the Thach Khe Iron Joint Stock Company (TIC), the
investor of the Thach Khe iron ore mine in the central province of Ha Tinh.

The meeting was gathered because
many shareholders of TIC have not fulfilled their capital contribution
commitments, thus slowing down the project implementation.

TIC was set up four years
ago, with a chartered capital of 2.4 trillion dong. The company’s main function
would be exploiting iron at Thach Khe mine and providing iron ores to serve the
domestic demand and for exportation. Besides, TIC would also build and run an
ingot steel mill with the initial capacity of two million tons a year. The
production scale would be expanded if there are favorable conditions.

TIC has nine main
shareholders, including the Vietnam Coal and Mining Industries Group
(Vinacomin) which holds 30 percent of stakes, the Ha Tinh Mineral and Trade
Corporation (24 percent), the Vietnam Steel Corporation (20 percent), the
Vietnam Post and Telecommunication Group VNPT (4 percent), the Bank for
Investment and Development of Vietnam (5 percent), Song Da Corporation (5
percent), the Vietnam Shipbuilding Industry Group Vinashion (5 percent), the
Binh Minh Import-Export Company (4 percent) and Thang Long Mineral and
Metallurgy Company (3 percent).

Of these nine shareholders,
Vinashin, which has been facing a crisis and is bogged down in debts, cannot
make a capital contribution as promised. Meanwhile, some other shareholders
have also “forgotten” their duty of making capital contribution.

In 2010, shareholders did
not contribute 1.3 trillion dong worth of capital as committed, while they only
contributed 221.5 billion dong, the amount of money they should have paid in
2009.

Meanwhile, in late 2010, TIC
signed a contract on drawing up technical design and estimates for the iron
exploitation and sifting with the joint name of contractors already. The
contract is worth approximately 63 billion dong.

Ho Duc Binh, General
Director of TIC, said the fact that shareholders do not contribute capital as
per commitments has been seriously affecting the operation of the project.

The TIC’s board of directors
decided after the meeting on November 29, 2010 that TIC would send a document
to the Ministry of Industry and Trade and the Prime Minister to report the
situation and ask for instructions on restructuring the shareholders.

Binh told Thoi Bao Kinh Te Vietnam right
after the meeting at the Ministry of Industry and Trade on April 13 that the
company now does not have capital to operate, while it cannot borrow money from
banks. The tardiness in the project implementation has also made TIC’s debts
increase.

Also according to Binh,
TIC’s board of directors will have an extraordinary meeting where an
announcement will be made that shareholders will have to make capital
contribution prior to May 30. In case the shareholders cannot contribute
capital as promised, the project will have to call for more capital from
existing shareholders or call for investments from new shareholders.

However, TIC and the Ha Tinh
provincial People’s Committee still show their strong determination to implement
the project as previously scheduled.

“We have injected 700
billion dong in the project, and we cannot stop the project now,” Binh said.

Thach Khe is considered the
biggest iron ore mine in South East Asia,
which was discovered in 1960. The mine is thought to have a total reserve of
544 million tons.

Source: TBKTVN