The Asia Miner

SEP-OCT 2014

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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44 | ASIA Miner | September/October 2014 Vietnam VIETNAM is well endowed with mineral resources but there has been limited modern exploration and much of its potential is still to be realized. While coal dominates, there are extensive bauxite resources, and the nation also has iron ore, chromite, copper, tin, wolfram, gold, lead, zinc, uranium, antimony, rare earths, gems, limestone and clay. During a Mining Success Asia Forum event organized by Mining Media International in Melbourne, Australia, Austrade's senior busi- ness development manager based in Hanoi, Hoa Nguyen said Aus- trade was keen to assist the development of Vietnam's mining in- dustry through the introduction of Australian mining technology and mining expertise. She said Vietnam's strong growth ensured there was growing domestic demand for coal and minerals while the growth of other surrounding countries, especially China, ensured there was also ex- port demand. "Technology and mining expertise from Australia could help Vietnam unlock its mineral potential." Vietnam has a growing population of 90.5 million with 60% under 30. According to the International Development Association, it will reach 100 million by 2020 with 40% living in urban areas. It is often referred to as one of the 'Asian tigers' owing to its economic growth. GDP growth averaged 6.2% between 2000 and 2013 and is now 5.54%. Forecasters expect a period of policy stability and moderate annual growth of 5-6% over the coming 2-3 years. Vietnam has an export-led economy with 70% of GDP from ex- ports. The three signifcant components are oil and gas, agriculture and advanced manufacturing. Vietnam is number one exporter glob- ally of a number of commodities, including rice, coffee, cashews and pepper. It also enjoys an emerging status as a location for low- cost manufacturing within global value chains, leading to signifcant investment, for example, from the mobile phone industry. The country still relies heavily on private investment and Offcial De- velopment Assistance (ODE). In 2013 the total aid commitment was about US$6.5 billion, led by Japan while Australia has maintained its commitment of about $134.4 million. Hoa Nguyen said the key brakes on further development of the economy are: • Dominance of ineffcient State Owned Enterprises (SOE). • Continuing impact of the Global Financial Crisis on investment infows, and a weak banking sector. • Corruption and inconsistent and non-transparent regulation. • Availability of skilled labour with only a third of the workforce hav- ing accessed training of any kind. She said that compared to Australia, Vietnam's mining sector was considered small to medium but with undeveloped potential. "Coal dominates mining along with carbonate rocks, crude petroleum and phosphate rocks. Coal exists in many parts of Vietnam in the form of peat, lignite, fat coal and anthracite. There are around 200 coal mines with a total reserve of almost 7 billion tonnes, of which anthra- cites and semi-anthracite account for about 50%. "Recently, Vietnam has discovered brown coal in the Northern Del- ta Region which has massive potential reserves and according to State Media, SOE Vinacomin plans to invest around US$5.97 billion to develop 11 projects. "Although coal reserves are promising, economic growth is driving energy use with demand expected to increase by between 7 and 10% annually for the next few years. Traditionally a net coal exporter, Vietnam expects to be a net importer by 2017 due to the demand for coal-fred power." Vietnam has substantial bauxite resources of about 5.5 billion tonnes concentrated in the Central Highlands. There are two proj- ects under construction with bauxite utilization in the region being a major Government priority. Alumina output is projected to be 6-8.5 million tonnes by 2015 and 13-18 million by 2025, and Vietnam ex- pects to annually produce 400,000-800,000 tonnes of aluminium. Hoa Nguyen said that state-owned Vietnam Coal and Mineral In- dustrial Group (Vinacomin) dominates the coal and minerals indus- try while other producers include Masan Resources with tungsten, fuorspar, bismuth and copper; Asian Mineral Resources with nick- el and copper; Besra with gold; and Hazelwood Resources with a ferrotungsten plant. Foreign explorers include Axiom Mining and Triple Plate Junction with various gold prospects; and Archipelago Resources with chromite. "Vinacomin is responsible for about 95% of Vietnam's coal pro- duction, operating 54 mines, of which 30 are underground. From 2011 to 2030, the group will close 19 open cast operations, and the production share from underground coal mines will rise from 45% in 2011 to 60% in 2015 and 80% in 2030. From 2015 to 2025, Vina- comin plans to establish 19 underground mines with total annual production capacity of 31 million tonnes. By 2030, the group plans to have annual capacity of between 65-75 million tonnes. "Vinacomin also produces, or is planning to produce alumina, chromite, copper, iron ore and zinc. Not all the group's operations are entirely state-owned as Vinacomin has entered into a number of joint ventures with foreign companies. One of these partners is Alcoa World Alumina, which is cooperating with the group in the Gia Nghia bauxite mine and alumina refnery project in Dak Nong province. "Masan Resources, a Masan Group subsidiary, is owner and de- veloper of the Nui Phao Mine in Thai Nguyen province, north of Hanoi. Nui Phao is one of the largest undeveloped tungsten mines in the world. When fully operational, the mine will also be one of the largest single point producers of bismuth and acid-grade fuorspar in the world. Australian mining and METS companies are highly en- gaged in this project." Hoa Nguyen says the Vietnamese government has accelerated a program to improve technologies used in the mining and minerals sector, which is where Australian companies can play a major role. "The aim is to match regional standards by next year and internation- al standards by 2025." Unlocking Vietnam's mining potential

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