Vietnam's Prime Minister halts $10.6 bln steel plant over questions of demand, pollution

By Anh Minh   April 15, 2017 | 08:49 pm PT
Vietnam's Prime Minister halts $10.6 bln steel plant over questions of demand, pollution
A graphic rendition for the Hoa Sen’s steel plant complex in Ninh Thuan Province. Photo by VnExpress
Says the project is 'very sensitive' in the wake of Vietnam's worst ever environmental disaster that occured last year.

Vietnamese Prime Minister Nguyen Xuan Phuc has halted work at a $10.6-billion steel plant that had previously been vouched for by the trade ministry, calling for more studies to be conducted into demand and environmental impacts.

A statement from the government office has cited Phuc as saying that the preparations for the Ca Na steel plant in the central province of Ninh Thuan had been too “hasty”.

He said the parties involved should look at domestic and overseas demand, as well as material supplies and available infrastructure, to decide the scale and development timeframe for the project.

They also need to assess the technology and possible environmental impacts to prevent a disaster similar to the one caused by Taiwan’s Formosa, he said in the statement.

“This project was proposed following the Formosa scandal and is very sensitive,” Phuc said, referring to the wastewater spill that polluted 200km (125 miles) of Vietnamese coastline in April last year.

The incident, considered Vietnam's worst ever environmental catastrophe, devastated sea life and local economies dependent on fishing and tourism in Ha Tinh, as well as the nearby provinces of Quang Binh, Quang Tri and Thua Thien-Hue. The environment ministry said it could take the region a decade to completely recover from the disaster, while experts predict it may set back Vietnam’s economy for years.

Phuc said the Ca Na project can proceed if studies prove it is viable.

Hoa Sen Group, one of Vietnam’s biggest steelmakers, announced plans in April last year to revive the mothballed project, which was first given to state-owned shipping giant Vinashin and Malaysia’s Lion Group in 2008, but the license was revoked three years later after the foreign investor pulled the plug.

The company plans to build a complex of more than 1,700 hectares (4,200 acres) and produce 16 million tons of steel a year.

The project has not been officially licensed but the trade ministry has included it in a national steel development plan, without naming investors.

Its officials argued that the country is still importing a large amount of steel to meet domestic demand, despite a rich supply of iron ore. Vietnam imported 18.4 tons of steel worth more than $8 billion in 2016, up 18.4 percent in volume from the previous year, according to customs data.

Minister Tran Tuan Anh said at a meeting with national legislators in November that steel plants will be not be built at the cost of environment. He assured that development is not motivated by “group interests”.

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