Decision No. 124/2006/QĐ-TTg Approves the Exploration, Exploitation, Processing and Utilization Plan for Iron Ore up to 2010, with Guidelines up to 2020

Pursuant to …;

Approving the Exploration, Exploitation, Processing and Utilization Plan for Iron Ore up to 2010, with Orientation to 2020

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Considering the proposals of the Ministry of Industry in documents numbered 4469/TTr-KH dated August 19, 2005; number 387/BCN-KH dated January 18, 2006, and the opinions of relevant ministries and agencies.

Pursuant to …;

Article 1. Approving the Exploration, Exploitation, Processing and Utilization Plan for Iron Ore up to 2010, with Orientation to 2020, with the main contents as follows:

Clause 1. Views

a) Iron ore in Vietnam must be explored, exploited, processed, and utilized reasonably, economically, and effectively, protecting the ecological environment and ensuring social security in areas with iron ore.

b) The exploration and exploitation plan for iron ore serves as the basis for restoring order in mineral activities in accordance with the law, ensuring the interests of the State, enterprises, and people in regions with iron ore.

c) Building and developing the iron ore mining and processing industry with modern technology suitable for Vietnam's conditions, increasing the recovery rate of minerals.

d) Encouraging economic sectors to participate in investment in exploration, exploitation, and processing of iron ore on the basis of complying with legal regulations on mineral activities, ensuring labor safety, and protecting natural resources.

Clause 2. Objectives

a) Meeting the demand for iron ore raw materials for domestic metallurgical facilities, reserving a portion for export to exchange for coke and coal for metallurgical needs.

b) Geological exploration work focuses on promising magnetite deposits and combines with other geological tasks.

c) Fully preparing the necessary documentation regarding reserves, quality, and extraction conditions of mines to be put into operation before 2020.

d) Determining exploration and exploitation zones, indicating restricted and prohibited areas to ensure compliance with legal regulations for mineral activities.

3. Content of the Master Plan

a) Demand for iron ore: meeting the demand for iron ore for blast furnaces, cement industry, and exporting a part from mines not included in the raw material planning area for metallurgical facilities, and for exchange imports of coke and coal (estimated at 1.5 million tons in 2006, 9 million tons in 2010, 15 million tons in 2015, and 16 million tons in 2020).

b) Exploration planning: from now until 2020, planning the exploration of 14 mines and mining areas, including supplementary exploration of 2 mines and local management of 3 mines. The results of exploration work must ensure sufficient reserves for stable exploitation in the mining areas of Cao Bang, Tuyen Quang, Ha Giang; preparing resources for post-2015 exploitation and processing of new mining areas: Zhenyan (Yen Bai), Tong Ba (Ha Giang), Thanh Son (Phu Tho), Mo Duc (Quang Ngai). Details in Appendix I.

c) Exploitation and processing planning:

- Exploitation planning:

+ From now until 2020, exploiting 26 mines in 9 provinces to meet the demand for iron ore for consumers; including: Lao Cai 6 mines; Yen Bai 4 mines; Ha Giang 2 mines; Tuyen Quang 2 mines; Cao Bang 3 mines; Bac Kan 4 mines; Thai Nguyen 2 mines; Thanh Hoa 2 mines and Ha Tinh 1 mine. The exploitation capacity in 2010 is 9 million tons/year; the period 2011-2015 is 14-15 million tons/year; the period 2016-2020 is 15-16 million tons/year. Details in Appendices II and III.

+ The production volume may be adjusted according to the actual development of the Vietnamese metallurgical industry and specific requirements of foreign investment projects in metallurgy in Vietnam.

- Processing planning: most iron ore deposits have low quality and need to be enriched before consumption. Synchronized investment between the mining and mineral processing stages to enrich ore to meet the requirements of the metallurgical stage.

- Production volume of iron ore exploitation and processing in each locality as follows:

+ Up to 2010:

(1) In Lao Cai Province: exploiting and processing iron ore from the Quyxa mine and other mines with a total capacity of 3.5 to 4.5 million tons/year to supply the Lao Cai Steel Plant with a capacity of 500,000 tons/year, the Thai Nguyen Iron and Steel Company, and for export in exchange for coal and other raw materials.

(2) In Cao Bang Province: exploiting and processing iron ore from mines within the province with a total capacity of 350,000 to 450,000 tons/year to supply two blast furnaces in Cao Bang with a capacity of 30,000 tons/year and the Thai Nguyen Iron and Steel Company.

(3) In Bac Kan Province: exploiting and processing iron ore from mines within the province with a total capacity of 200,000 to 350,000 tons/year to supply two blast furnaces under construction in Bac Kan and the Thai Nguyen Iron and Steel Company.³(4) In Thai Nguyen Province: exploiting and processing iron ore from the Trai Cau mine, the Tien Bo mine, and other mines within the province with a total capacity of 400,000 to 500,000 tons/year to supply the expansion project phases II and III of the Thai Nguyen Iron and Steel Company with a total capacity of 750,000 tons/year.

(5) In Ha Tinh Province: preparing to exploit the Thach Khe iron ore mine with an initial capacity of 5 million tons/year.

+ After 2010:

(6) In Ha Tinh Province: exploiting and processing iron ore from the Thach Khe mine with a total capacity of 5 to 8 million tons/year to supply the Ha Tinh Integrated Steel Plant with a capacity of 2.5 to 4.5 million tons/year.

Other provinces with iron ore (such as Tuyen Quang, Yen Bai, Ha Giang, Thanh Hoa) are only allowed to build steel plants within their provinces when they have confirmed exploration data on iron ore sources, other resource factors, and approval from competent authorities.

4. Investment Capital

a) Investment capital for exploration work (approximately 60 billion VND), mainly from the investor's own funds.

b) Investment capital for iron ore exploitation and processing (approximately 69,000 billion VND) arranged by the investor from self-owned capital, loans, and other lawful forms of capital mobilization.

c) In special cases, the Prime Minister shall consider and decide on specific forms of support.

5. Implementation Measures and Policies

a) Measures

a) Solution

- Management and identification of iron ore potential: promptly establish and apply a geological data management system for iron ore using information technology nationwide to store national data; continue researching and developing investigation programs to discover additional iron ore deposits with potential in northern mountainous provinces and Central Vietnam; delineate the area of mines and facilities serving mining operations within the planning framework to use land reasonably, thereby minimizing compensation and resettlement later. Strengthen detailed exploration work to prepare resources for projects to be developed for exploitation from 2006 to 2020.

- On iron ore extraction and utilization:

+ Prioritize projects for mining to serve domestic steel billet production.

+ Apply advanced techniques and technologies in the field of iron ore extraction and processing, improve labor productivity, and strictly manage cost prices to ensure product competitiveness.

+ Focus on researching and selecting appropriate metallurgical technologies to maximize the effective use of domestic iron ore and other raw materials.

+ Promote international cooperation in the fields of science and technology related to iron ore extraction and processing.

- Infrastructure solutions: prioritize investment in building road, railway, and port systems in provinces with current and future iron ore extraction needs to meet economic development requirements.

b) Policies

- Develop policies for the use and trading of iron ore exports based on the principle of conserving and utilizing resources efficiently, enhancing the economic efficiency of iron ore extraction and processing activities, gradually moving iron ore export activities towards formal channels based on medium- and long-term contracts, ensuring balanced socio-economic development and increasing the economic value of iron ore minerals.

- Establish financial, tax, and land incentives for projects investing in iron ore extraction as raw material for domestic steel billet production. Encourage all economic sectors to participate in exploration, extraction, and processing of iron ore according to the plan to meet domestic production needs. Create state budget and credit sources to support exploration and investment in some iron ore mines.

- Implement policies to attract management staff and specialized geological, mineral exploration, and mining professionals to carry out iron ore exploration, extraction, and metallurgy projects.

- Regarding international cooperation:

+ For the Quy Xa and Thach Ke mine projects, to encourage foreign investors while ensuring synchronization between mining and metallurgy stages, joint ventures with foreign partners can be established for the mining phase, with Vietnam holding controlling shares.

+ For small-scale mines and residual extraction, encourage domestic enterprises to undertake these operations themselves.

Article 2. Implementation

1. The Ministry of Industry shall take the lead and coordinate with relevant ministries, sectors, and localities to implement the zoning plan for iron ore exploration, extraction, processing, and utilization until 2010, with a vision to 2020. Propose mechanisms and policies to develop a stable and sustainable iron ore extraction and processing industry.

2. The Ministry of Natural Resources and Environment shall be responsible for establishing and submitting to the Prime Minister for approval a basic geological survey plan for iron ore mineral resources consistent with this Plan and direct its implementation.

3. The Ministry of Planning and Investment and the Ministry of Finance shall allocate state budget funds to build technical infrastructure outside the perimeter at the Quy Xa and Thach Ke integrated mine-metallurgy complexes.

4. Provincial People's Committees shall be responsible for managing and protecting iron ore resources within their jurisdiction when the mines have not yet been assigned to organizations or individuals for management and exploitation according to regulations; prevent illegal iron ore extraction and export. Organize and submit plans for iron ore exploration, extraction, processing, and utilization for mines under their licensing authority to the respective People's Councils for approval.

Article 3. This Decision shall take effect fifteen days after its publication in the Official Gazette.

Article 4. THE MINISTERS, HEADS OF GOVERNMENT-LEVEL MINISTRIES, HEADS OF GOVERNMENT-LEVEL AGENCIES, AND CHAIRMEN OF PROVINCE AND CITY PEOPLE'S COMMITTEES DIRECTLY UNDER THE CENTRAL GOVERNMENT SHALL BE RESPONSIBLE FOR ENFORCING THIS DECISION./.