|
Companies ponder concerns in iron ore sales
It is very difficult for mineral companies to export ore because they have to follow very complicated procedures. Domestically, it is also not easy to sell ore, because businesses try to force the prices down.
Several days ago, a meeting between steel producers and ore extractors was organized by representatives from the Ministry of Industry and Trade (MOIT) and the Vietnam Steel Association (VSA) to settle arguments on various issues.
Prior, VSA proposed that MOIT halt fine iron ore export and retain the ore to serve domestic demand. VSa believes that, if Vietnam continues to export iron, domestic blast-furnaces with lack ore to make ingot steel.
According to Nguyen Thanh Hai, General Director of the Mineral Corporation under the Vietnam Coal and Mineral Industries Group (Vinacomin), his corporation has not been able to export a single kilogram of ore, because the procedures for exporting natural resources are very complicated.
The complexities have prompted the corporation to sell ore to domestic steel producers When his corporation invited bids for purchasing iron ore, only Hoa Phat Group and some domestic businesses turned up.
The corporation is now managing two iron ore sources that can provide 300,000 tons per annum. This includes 200,000 tons of finished ore, sourced from Na Nung mine in Cao Bang province, and 100,000 tons from the production chain in Sin Quyen copper factory in Lao Cai province. The iron ore has an iron content of over 60 percent, but it also has 30 percent sulfur, which no domestic blast furnace wants to use.
Ninh Quoc Chinh, Deputy Director of Duc Son Company in Ha Giang province, also said that the ore his company extracts has an iron content of 26-53 percent, which does not meet requirements for making cast iron (Over 60 percent). Therefore, the iron ore needs to be mixed with other kinds that have higher iron content. Chinh noted that, in Ha Giang, there is no metallurgy factory, which explains why iron ore cannot be consumed. If carrying ore to processing factories in the delta, transport costs are prohibitive.
Therefore, Chinh concluded, it is not easy to sell ore domestically.
VSA Chair Pham Chi Cuong also added that Vietnam does not have many mines that provide ore with high iron content. Quy Xa mine, for example, has ore with iron content of over 50 percent, but the ore of Thach Khe mine is better, except that it has high zinc levels that must be treated with modern technologies.
In addition to technical problems, many other issues were also mentioned at the meeting.
Pham Le Hung, Director of Thang Long Mineral and Metallurgy Company maintained that, in late 2008, the company sold ore at 1.4 million dong per ton. After MOIT released a circular stipulating that mineral companies must try to sell products to domestic companies, they forced prices down to 350,000 dong.
Of course, enterprises do not want to sell ore at dirt cheap prices and they have been determined to export the ore instead of selling domestically, even when they have to follow very complicated procedures.
Currently, China is purchasing Vietnam’s ore at 3 million dong per ton, while domestic companies pay half that price.
“Steel producers should not force us to sell at such low prices,” Hung argued.
Meanwhile, Hoa Phat group, which once purchased ore from many mineral producers, revealed that its biggest problem is red tape. Representatives of the group confirmed that, in 2009, Hoa Phat bought 200,000 tons of ore in Cao Bang, but it took 10 months to obtain just 100,000 tons.
VietNamNet, DTCK
|
