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Vietnam Business » Vietnam Business News » Mammoth steel project might change hands

Mammoth steel project might change hands

Authorities of the central province of Ninh Thuan will likely revoke the license of the foot-dragging Cana Steel Complex, a huge project worth up to US$9.8 billion, as both time and patience are running out, said a provincial official.

Le Kim Hung, director of the provinces Department of Industry and Trade, said the province now had reasons to revoke the project license and hand it to another eligible investor as time for the investor Maju Stabil Sdn. Bhd, a unit of Malaysias Lion Group, has run out.

The province recently had meetings with some giant steelmakers to restart the project, but Hung declined to unveil the names of the new potential investors.

However, South Koreas Posco Group and JFESteel Corporation, the second largest Japanese steelmaker, are two candidates the province is targeting, according to Dau Tu newspaper.

The Cana Steel Complexs investors, namely Vietnam Shipbuilding Industry Group (Vinashin) and Maju Stabil Sdn. Bhd. under Malaysias Lion Group, began work on the steel complex in late 2008. The complex was to be developed over a 1,650-hectare area in Ninh Phuoc District in four phases between 2008 and 2025.

The complex was designed to have a capacity of 14.4 million tons of steel per year, including an initial output of 4.5 million tons per year in the first phase after 2011. Key products would be hot- and cold- rolled coils, steel plates, galvanized and coated coils, H- and I-beams, and pipes.

The projects supporting facilities were to include two 1,450MW power plants and a seaport with an annual handling capacity of 50 million tons. The feedstock for the steel complex would be imported iron ores and domestic coke.

However, despite support from local authorities, the project has not made a move, sending many farming families whose land was redeemed into limbo. Many residents who had to leave to make room for the project have not yet been compensated, according to local newspapers.

Under Vietnams investment laws, the developers of major projects pay local authorities for the use of land, and in turn, local authorities allocate the money to the residents who have to move to allow for the project to proceed.

The investors have paid the provincial government only VND84 billion compared to the total obligations of VND130 billion for the use of the land.

According to the province, it is looking for new investors to restart the project instead of simply revoking the project.

Vietnam Business And Financial News Network. Source [english.vietnamnet.vn]

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