Mining plans to fall into hole

Investors seeking mining opportunities may have to shelve their plans indefinitely after a government decision to temporarily halt all new projects.

Government Office chairman Vu Duc Dam said government members had unanimously agreed to boost oversight of mineral mining because local authorities had been granting licences willy-nilly to mining projects. This in turn had caused environmental pollution and irritated local residents.

“The government’s policy is to closely control this industry. [Thus] the government has ordered an immediate stop to the granting of investment certificates to new projects,” said Dam. He added that all provincial authorities had to review mining activities in their province and report back to the government in a meeting to be held at the end of this month.

But, Dam did not specific how long this policy would remain in force.

The government’s decision will mean local and foreign investors seeking new mining investment opportunities will now have to bide their time.

Considered a mineral-rich country, Vietnam has attracted foreign investors to 69 mining projects with total committed capital at nearly $3 billion up to the end of last month.

Many foreign companies have expressed an interest in this sector.  Japanese companies are among those seeking opportunities in Vietnam. Itochu Group and Toyota Tsusho and Sojitz Corporation are exploring rare-earth mines in Lai Chau province. Meanwhile, Sumitomo Corporation is exploring rare-earth potential in Yen Bai province.

Australian companies are also eyeing mining projects in this country. “Australian interests in Vietnam’s mining sector are small, but growing,” said Brian O’Reilly, vice chairman of the Australian Chamber of Commerce in Vietnam. “Vietnam has huge potential in terms of attracting foreign mining companies,” said Japan’s IF Technologies Limited chairman Mitsuhide Tanikawa. Last year the firm invested in a silica mining project in Quang Ninh province.

It is now seeking investment projects in titanium and rare-earth mining projects in Binh Thuan and Yen Bai provinces, respectively.

But Tanikawa said the latest government move could impact on companies’ investment plans in Vietnam.

“Investors may be deterred if the Vietnamese government delays licencing new projects too long,” he said. However, Dam said the government’s actions were essential to prevent ineffective mineral exploitation activities.

In line with the decision, Prime Minister Nguyen Tan Dung also asked Ministry of Natural Resources and Environment to draw up a 10-year development strategy for Vietnam’s mining industry to ensure effective mineral exploitation in the country. – VIR

Tags: Vietnam mining industry