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Flagship projects torpedoed
Thai Nguyen foreign investment management authorities have felt the pinch of the global economic turmoil with the province’s two largest licenced foreign-invested projects on the back foot.
The two affected projects, the $100 million Xuong Rong Lake property complex and $147 million Nui Phao mining, had a combined registered investment capital of more than half of the foreign direct investment (FDI) fund in the province by the end of November, 2008.
Nguyen Duc Minh, director of Thai Nguyen Planning and Investment Department told VIR that Japan’s Intra Corporation – the developer of Xuong Rong Lake property complex, had written to the department asking to withdraw from the project as a result of being unable to mobilise project funds.
“The global financial turmoil forced it [Intra] to quit while the investor has been under constant pressure from the local government to implement the project,” Minh said, adding that Thai Nguyen’s government had yet to give feed back to Intra’s proposal.
Licenced in January, 2007, Intra aimed to turn the Xuong Rong Lake and surroundings into a tourism area with high-quality services and public facilities, including villas, bungalows, semi-detached houses, shopping complex, apartment and condominium blocks, an office block and a four-star hotel.
Although Intra organised a ground-breaking ceremony in the middle of 2007, no further progress had been made.
Minh confirmed that since the beginning of 2008, Thai Nguyen’s government consistently urged Intra to make progress with the project in response to the prime ministerial call for accelerating foreign direct investment (FDI) disbursement across the nation.
“At that time, Intra asked us to delay the project while it was negotiating with a Malaysian firm to join hands in the construction of the Xuong Rong Lake property complex. We assume that the negotiations have led nowhere, so Intra decided to stop the project,” said Minh.
Meanwhile, Thai Nguyen’s largest FDI project, the Nui Phao Mining tri-joint venture or Nuiphaovica, failed to start mining works in 2008 as committed.
Minh told VIR that Nuiphaovica had asked to delay mining until 2010 – two years later than the venture’s committed mining schedule.
Originally licenced in February, 2004 Canada’s Tiberon Minerals, which started prospecting the Nui Phao mine in 1996, is to contribute 70 per cent of the total investment capital of the Nui Phao venture. Local stakeholders comprising Thai Nguyen Export-Import and Investment Company and Thai Nguyen Mineral Company each have 15 per cent stakes.
At that time, Tiberon expected the Nui Phao mine to become the world’s biggest producer of tungsten and bismuth, and one of the top producers of acid-grade fluorspar once it was operational. A Ministry of Planning and Investment (MPI) source revealed that Tiberon had sold all of its stakes to Dragon Capital, while Nuiphaovica was seeking ways to raise the total investment capital to $450-500 million.
The source also said that local Nuiphaovica stakeholders had suffered capital shortages to fulfil their capital contributions.
“I really did not understand why the venture asked to delay the project implementation at a time when there is a limited supply of the minerals in the global market and the minerals are expensively priced,” the MPI source said.
Recently, Nuiphaovica criticised that the dramatic increases in mineral export taxes to 20 per cent and new hikes of royalty taxes to a 5-10 per cent range negatively affected the venture’s mining prospects.
VIR
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