US$3-billion steel project to be restarted this month

Taiwan-invested Guang Lian Steel (Vietnam) Co., Ltd. will restart construction on its steel complex project in the central province of Quang Ngai in the middle of this month after putting the project on hold for nearly two years.

Hsueh Hung Yi, general director of the company unveiled the planned resumption in his recent meeting with officials of the Ministry of Industry and Trade, said Le Van Dung, vice director of Dung Quat Economic Zone Authority.

Dung told the Daily on the phone on Wednesday that the company, which was established by Taiwan steel firms Tycoons and E-United, had prepared construction equipment for restarting the project this month.

The financial problem faced by the project in the Dung Quat Economic Zone has been solved after suppliers of equipment and a lender bank have visited the project site, the zone’s authority told the Daily.

The company put the project on hold early last year in the wake of the economic downturn, but it has now successfully arranged finance for the project from a bank.

The venture had poured some US$25 million into the project, including for administrative procedures, project design, planning for specialized port, geological survey, assessment of environmental impacts, and site clearance among others.

The company will increase investment into its long-delayed project to some US$4.5 billion from the current US$3 billion, Dung said.

The site for building the mill and a private port for importing materials like iron ores and coke, and exporting steel products has been revised up to 537 hectares from the initial 460 hectares. Equipment and technology have also been changed to facilitate larger capacity, at five million tons of steel foil.

However, the company will develop the first phase of the project on some 334 hectares, Dung said.

The company is resuming work on a drainage system as well. It has recently sent a report to the government of Quang Ngai Province to brief on the progress of the steel project. The report says the steel mill will be up and running in late 2012 or early 2013.

The initially planned project was licensed in September 2006 and was to be developed by Tycoons only with investment capital of nearly US$1.04 billion.

But the cost of the project was revised up to more than US$3 billion in 2007 when Tycoons teamed up with Taiwan’s E-United Steel Company for the project.

Then the two companies planned to run the first phase of the project in mid-2010 with three million tons of steel ingots and hot rolled steel rods a year. They were also looking to increase output by two million tons annually, including heavy gauge plate and hot rolled coil in the second phase.

They would reach full capacity in 2013, and output would be for both local sale and export.

Dung said the Dung Quat Economic Zone Authority would hand over the ready land to the investors this year.

Tags: Guang Lian Steel, Vietnam steel industry, Vietnam Steel Projects