Recently, a seminar on the Central Highlands bauxite mining project held by the Pan Nature Centre said that “If Vietnam produces 660,000 tonnes of bauxite, it will lose US$374 million” and Vietnam is being caught in “cheap trap”. In this regard, on March 31, the Ministry of Industry and Trade officially noted that the remarks by the seminar were "hasty and groundless".
Quicker capital recovery than expected
The Ministry of Industry and Trade said it reported the updated results (as of April 26, 2014) on economic effects of Tan Rai alumina project to the Standing Committee of the National Assembly, estimating that the loss-making period was four years and the payback period was 11.5 years. Nhan Co Alumina Plant had lower economic efficiency because of longer transportation distances. Thus, the loss-making period was five years and the payback period was 12 years.
Besides, the ministry noted that the Vietnam National Coal, Mineral Industries Holding Corporation Limited (Vinacomin) already drew experience from Tan Rai Alumina Plant and mastered technologies to reduce costs. In addition, global alumina prices are on the rise. Current price rates are higher than estimations, thus the loss-incurring period may be shortened.
From November 2013 to April 2014, a delegation of the Standing Committee of the National Assembly probed Tan Rai and Nhan Co bauxite projects to gauge overall economic and social effects as well as national security and defence issues. On June 23, 2014, the Standing Committee issued Resolution 775/NQ-UBTVQH13 on the two projects, saying that the two projects reflected the right policy of the Party and the State to tap local potential and strengths to promote comprehensive socioeconomic development of the Central Highlands, a strategic location. Initially, the two projects affected the positive development of infrastructure, economic restructuring and employment in Dak Lak and Lam Dong province where the governments and people supported the projects.
According to calculations, the loss of Tan Rai and Nhan Co projects was caused by due loans.
Ensuring technique and technology
Bauxite mines have methodical designs and suitable extracting, transporting and washing technologies. Contractors handed over the project to Lam Dong Aluminium Company for management and operation from December 31, 2012. Currently, the company is operating and mastering technologies. It is studying technological innovations to improve productivity and efficiency. Differences between designs and realities are acceptable as they cause no impacts on production results.
According to the EPC contracts, alumina plants have an annual designed capacity of 650,000 tonnes of alumina, higher than the capacity of 600,000 tonnes in the bid tenders prepared by Vinacomin. The alumina output was expected to reach 540,000 tonnes in 2015 and 650,000 tonnes in 2016. Hence, the loss is unlikely, according to the Ministry of Industry and Trade.
As bauxite ores have average contents and contains a lot of impurities, the higher consumption of ores than mines in other countries like Australia and Brazil is understandable.
With these information and data, the ministry confirmed that remarks at the seminar were hasty and groundless because of lack of data and proofs.
Huong Ly
Vietnamese
