Vinachem tries to sell Lao potassium mine

By Nguyen Hoai   March 1, 2019 | 11:55 pm PT
Vinachem tries to sell Lao potassium mine
One of Vinachem's chemical plants in Bac Giang Province. Photo by VnExpress/Anh Tu
State-owned chemical group Vinachem is trying to retrieve investment and minimize losses from a half-built Lao potassium mine.

"The goal is to recover as much capital invested as possible. If possible, the Lao Potassium Mine project will be sold," Do Thang Hai, Deputy Minister of Industry and Trade, said at a press conference Friday afternoon.

"While implementing it, we realized that the project's effectiveness was not as calculated in the feasibility study. The Party Politburos of Vietnam and Laos then took a decision to terminate the project," he said. 

Hai added that his ministry was coordinating with relevant agencies, the state capital management committee and Vinachem to take steps to recover capital invested in the mine.

The project cancellation has come two years after work was halted in 2017. Situated in the central Lao province of Khammouane, it had a total investment of $522 million, of which $105 million was to be contributed by Vinachem. The remaining money was to be raised from state-run banks VDB, BIDV and Vietinbank.

In a report sent to ministries by Vinachem on the project after beginning construction in early 2015, the corporation said it had faced unforeseen difficulties. It said the project had many complicated procedures and complex technologies not yet fully understood, so contractors were not able to meet construction schedules. 

At stoppage time, Vinachem had already spent VND940 billion ($40.32 million) on the project. 

The potassium mine, covering an area of 10 square kilometers, was to be built in five years. Extraction was to begin in 2020 with an expected output of 320,000 tons a year. However, Vinachem stopped construction halfway through 2017 to obtain "further guidance from authorities in implementing the project".

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