Pursuant to …;

Approving the Overall Development Plan for the Steel Industry until 2010

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PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the Investment Management and Construction Regulations, and Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government amending and supplementing certain articles of the Investment Management and Construction Regulations;

Considering the proposal of the Ministry of Industry (letters No. 4694/CV-KHĐT dated December 11, 2000, No. 2196/CV-KHĐT dated June 1, 2001) and the Report on the State Council's Review of Investment Projects (letter No. 7/TĐNN dated April 6, 2001),

DECISION:

Article 1. Approves the Steel Industry Development Plan until 2010 with the main contents as follows:

1. Objectives:

a) The goal of developing the Steel Industry until 2010:

Developing the steel industry into one of the key industries of the national economy; satisfying the increasing domestic consumption needs, moving towards export; promoting production, creating more jobs, making significant contributions to the industrialization and modernization of the country; enhancing competitiveness, firmly integrating into regional and global economies.

b) Average growth rate over ten years (in terms of capacity):

- Steel billet (steel ingot) production: Increase at an average rate of 15% per year.

- Steel rolling production: Increase at an average rate of 10% per year.

Article 2. Orientation for development:

a) On investment structure:

Develop a balanced ratio between downstream (rolling, drawing, post-rolling processing) and upstream (iron ore mining, billet production), gradually self-sufficiently meeting the basic billet steel requirements for rolling and drawing production. Combine diversification of product types and specifications to meet market demand with selective and rational development of some high-quality steel products for machinery manufacturing, shipbuilding, automobile production, and special steels for defense industry. The development of steel production and the exploitation and utilization of domestic resources (primarily iron ore) must be reasonable and effective.

b) On technology:

Utilize advanced technology, high levels of automation, energy conservation, and ensure environmental standards; to produce high-quality steel at low costs, increase labor productivity, and compete effectively with regional and international steel. Selected technologies must ensure longevity, flexibility (easy upgrades and modernizations when necessary); replace outdated and inefficient technologies that have adverse effects on the environment.

c) Mobilizing investment capital:

Mobilize all sources of capital and economic sectors to participate in investment and development, rationally attract foreign investment (primarily technology and equipment); promote the development of domestic enterprises involved in steel production.

d) On raw material development:

In the five-year plan from 2001 to 2005, focus on researching to reach a definite and scientific conclusion about the commercial reserves, extraction, and utilization capabilities of domestic iron ore sources, with a focus on the two iron ore mines of Quy Xa and Thach Khe. Maximize the exploitation of small iron ore mines for pig iron production, recycle domestic scrap steel, and simultaneously seek stable scrap steel import sources to produce billets using electric furnaces efficiently.

đ) On the market:

The steel industry will dominate the domestic market in terms of product types, quality, specifications of common steel grades, prices, and find export markets; gradually meet the demand for steel sheets, steel plates, and special steels for mechanical manufacturing. Strive to achieve by 2010 that domestic steel production meets 75% to 80% of domestic steel consumption needs, with Vietnam Steel Corporation (including its joint ventures) accounting for over 50% of construction steel and approximately 70% of steel sheets and steel plates.

e) On human resource development:

Emphasize the training of new and retraining of metallurgical engineers, industry management staff, and skilled technical workers; invest in scientific research and technology to meet the development needs of the steel industry.

g) Investment projects for the period 2001-2010:

Investment projects for the period 2001-2005 are included in the five-year plan 2001-2005 (Annex I). Investment projects after 2005 are orientations (Annex II).

Article 3. Indicators of the planning:

a) Design capacity indicators for steel plants (billet steel production, steel rolling, and post-rolling processing):

b) Production volume indicators:

c) Capital investment requirements:

The total estimated investment capital for the Steel Industry development over ten years is approximately 60 trillion VND, including:

+ For the period 2001-2005: approximately 16 trillion VND.

+ For the period 2006-2010: approximately 44 trillion VND.

Article 2. Some mechanisms and policies to support the implementation of the Steel Industry Development Plan until 2010:

1. The State will provide support from budget funds and ODA capital for the development planning of the industry; key projects, raw material iron ore development areas, flux materials; infrastructure investment for raw material extraction zones; large-scale new steelmaking plants; environmental treatment projects; investment in training and scientific research activities of institutes and schools within the industry.

2. Projects developing upstream activities (iron ore mining, steel billet production) shall be allowed:

a) To borrow preferential development credit from the State at an interest rate of 3% per annum as stipulated in Resolution No. 05/2001/NQ-CP dated May 24, 2001 of the Government. The loan period is 12 years, with a grace period of 3 years.

b) To be considered a priority investment sector and enjoy investment incentives as provided for in the Law on Encouraging Domestic Investment.

3. For projects of significant importance to the national economy, the Government will consider guaranteeing the purchase of deferred payment equipment and commercial loans from suppliers or financial organizations both domestically and internationally.

4. Currently operating state-owned enterprises producing steel billets shall be allowed to retain revenue from capital usage over a five-year period (2001-2005), treating this as a government budget allocation to the enterprise for upgrading technical infrastructure and replenishing working capital.

5. The Government encourages enterprises to intensify exports of steel products to potential markets, particularly neighboring countries and regions. The Ministry of Finance shall take the lead and coordinate with relevant agencies to study and submit export support policies for construction steel products to the Prime Minister in 2001.

Article 3. Implementation organization:

1. The Ministry of Industry shall be responsible for directing Vietnam Steel Corporation:

- To determine the priority order, scale, and location of each new investment project; deepen and expand existing facilities; develop mineral resource areas in each phase; guide investors in completing project documentation.

- To promptly update and timely adjust the Steel Industry Development Plan until 2010 when necessary, submitting any revisions for consideration and decision by the Prime Minister.

- To establish an information system to assist enterprises in understanding domestic and international market demands.

2. Ministries: Planning and Investment, Finance, Industry, State Bank of Vietnam, and the Fund for Supporting Development shall, based on their assigned functions and tasks, seek domestic and foreign sources of funding, including preferential ODA and FDI loans, allocate and provide loans according to annual plans to meet the industry's investment needs.

3. The Ministry of Industry shall take the lead and coordinate with relevant ministries and sectors in formulating financial mechanisms and policies, policies for mobilizing economic components to invest in developing the steel industry; unified management of product standards and quality; prevention of trade fraud.

Article 4. Ministries, sectors, and People's Committees of provinces and centrally governed cities shall implement the plan according to their respective functions and tasks, paying particular attention to ensuring consistency and synchronization between the Steel Industry Development Plan and the development plans of ministries, sectors, and localities.

This Decision shall take effect fifteen days from the date of issuance.

The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of People's Committees of provinces and centrally governed cities, Chairpersons of the Management Councils and General Directors of the Vietnam Development Support Fund, Chairpersons of the Board of Directors and General Directors of Vietnam Steel Corporation are responsible for implementing this Decision.