Thoi bao Kinh te Saigon has quoted a source from the Vietnam Steel
Association (VSA) as saying that “over the last two years, VTM, a mineral and
metallurgy company, has been exploiting ores from Quy Sa iron mine in Lao Cai
province to export to China, about 500,000 tons a year.”



VTM is a joint venture of the Vietnam Steel Corporation (VSC), the Lao Cai
Mineral Company and Chinese Kun Ming Steel Group, which exploits and sifts ores
at Quy Sa mine and builds the Lao Cai cast iron and steel mill.



The source from VSA said that the export of iron ores from Quy Sa mine to
China has been allowed by the Ministry of Industry and Trade in exchange for fat
coal.



Quy Sa mine is now being controlled by VSC. This is one of the biggest
iron ore mines in Vietnam, with the estimated reserves of 120 million tons, just
second to Thach Khe mine in Ha Tinh with the estimated reserves of 450 million
tons. The Ministry of Industry and Trade grants export quotas every year.



“Over the last year, a lot of enterprises have asked for the permission to
exploit and export ores. However, VSA has not agreed, except for very special
cases, where exporters have to bear the highest export tax rate of 40 percent.
The high tax rates aim to restrict the export of raw materials,” the VSA’s
source said.



Also according to the source, the ore exploitation and export have been
causing the waste of national resources and environment pollution, because most
of enterprises have been exploiting ores in a spontaneous way: they only take
good ores and give up lower quality ores.



In general, under the normal technical exploitation, both high and low
quality will be exploited to sift medium quality ores for export.



VSA said that the capacity of making cast iron from iron ores of all the
furnaces nationwide has reached 1.8 million tons a year. Since more and more
blast furnace cast iron mills have been built, the demand for iron ores in
Vietnam is forecast to increase sharply in the near future.



“If Vietnam continues allowing to export iron ores, domestic cast iron
companies will lack ores because the iron ore reserves in Vietnam are limited,”
wrote Nguyen Chi Cuong, Chair of VSA, in a document sent to the Prime Minister
and relevant ministries, requesting to stop exporting iron ores.



Raw ores crossing border to China



A local newspaper reported that over the last two consecutive years, VSA
has continuously sent documents to provincial authorities and relevant
ministries, mentioning the exploration and defining of the iron ore reserves in
the localities. It is necessary to clarify the iron ore reserves in Vietnam,
while too many blast furnaces have been built and put into operation recently.



“It is the policy by the Government and the Ministry of Industry and Trade
to encourage steel makers to invest in upstream works, i.e making cast iron from
iron ores, making and laminating steel,” said Nguyen Tien Nghi, Deputy Chair of
VSA.



A lot of enterprises think that they can collect iron ores in other
localities and then carry to the localities where the blast furnaces are
located. However, in fact, some furnaces do not have enough iron to operate,
which has caused a big waste.



“In some localities, iron ores are not allowed to be brought out of the
localities. Meanwhile, ores still can cross the border line to China,” Nghi
said.



According to him, steel makers and ore exploiters cannot find a “common
voice”, which has led to the massive export of ores to China. The former cannot
pay high prices, while the latter only wants to export ores because they receive
big attractive orders.



By the end of May 2011, Vietnam has exported 995,000 tons of ores and some
minerals, worth 66 million dollars, an increase of 237,000 tons over the same
period of the last year.



Source: TBKTSG