Vinacomin in talks to sell alumina to Chalco and Marubeni this year

 

 

Mr Nguyen Van Bien deputy GD of Vinacomin said that company will begin production at its alumina plant in Tan Rai of Lam Dong province in the Central Highlands early in the Q2. The Tan Rai bauxite mine is one of 2 the company is developing.

 

 

Vietnam is preparing to start production of alumina which can be smelted into aluminum for use in cars, packaging and houses when global producers of the lightweight metal are idling capacity as energy costs soar and prices slump. The Hanoi based company’s development of bauxite mines has been criticized by war hero Vo Nguyen Giap and activists who say that they pose environmental and national security risks.

 

 

Mr Bien said that Marubeni helped Vinacomin arrange USD 300 million syndicated loan from overseas banks and a lending agreement will be signed early this year. Aluminum Corporation or Chalco was the engineering and construction contractor for the project. The two companies began talks with Vinacomin last year to buy alumina produced from the project, though a purchase agreement hasn’t been signed yet. An agreement would be linked to progress on building the plant.

 

 

He said that aluminum for delivery in three months declined 30% to USD 1,962 per tonne in mid December from a peak of USD 2,797 in May on the London Metal Exchange. The metal climbed 13% since then to USD 2,210. Drops in the aluminum price are only temporary. Minerals are non renewable resources so the mining and refining of bauxite and alumina is significant in the long run.

 

 

Mr Bien said that alumina output at the Tan Rai plant will reach 300,000 tonnes this year and rise to 520,000 tonnes next year before attaining full capacity of 650,000 tonnes in 2014. Vinacomin’s second project in Nhan Co of Dak Nong province that’s under construction will start with production of 300,000 tonnes in 2014 and reach 650,000 tonnes in 2016.

 

 

He said that these two are pilot projects, so the sooner we finish them, the faster we can evaluate the aluminum industry in Vietnam. They will give us clearer direction and will be advantageous to our decisions regarding future projects.

 

 

Mr Bien said that Vinacomin needs about VND 30 trillion to VND 40 trillion annually for project investment in the period through 2015. The company plans to sell at least VND 1.5 trillion of domestic bonds within the H1 of this year. It will focus on the coal, minerals and power businesses.

 

 

He said that the company forecasts pretax profit will fall to VND 6.28 trillion this year from about VND 8 trillion last year due to high interest rates fluctuating input costs and unpredictable changes in the global economy.