Decision No. 145/2007/QĐ-TTg approves the Steel Industry Development Plan for the period 2007-2015, with consideration to 2025.

Pursuant to …;

Approves the Steel Industry Development Plan for Vietnam for the period 2007 - 2015, considering up to 2025 with the main contents as follows: 2025

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PRIME MINISTER

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

Approves the Steel Industry Development Plan for Vietnam for the period 2007 - 2015, considering up to 2025 with the main contents as follows:

DECISION:

Article 1. Approves the Steel Industry Development Plan for Vietnam for the period 2007 - 2015, considering up to 2025 with the main contents as follows:

1. Development Orientation

a) Develop the Vietnamese Steel Industry in accordance with the overall plan for economic and social development and the industry of the whole country, the plan for economic and social development of localities, and the integration roadmap of Vietnam.

b) Build and develop the Vietnamese Steel Industry into an important industrial sector, ensuring stable and sustainable development, reducing the imbalance between pig iron and steel billet production and finished steel product production, as well as between long products and flat products.

c) Build the Vietnamese Steel Industry with advanced and reasonable technology, using domestic resources efficiently and effectively, ensuring harmony with environmental protection at areas where the Steel Industry develops.

d) Emphasize and encourage various economic sectors and domestic industries to link and cooperate with foreign investment to build some integrated mine-metallurgy complexes, integrated steel plants, and large-scale flat product rolling mills.

2. Development Goals

The overall development goal of the Vietnamese Steel Industry is to meet the maximum demand for steel products of the economy, enhance exports, specifically as follows:

a) Pig Iron Production

Meet the demand for cast pig iron for mechanical production serving both domestic needs and exports, striving to provide most of the raw materials for domestic steel billet production facilities. In 2010, reach 1.5 to 1.9 million tons of pig iron; in 2015, reach 5.0 to 5.8 million tons of pig iron; in 2020, reach 8 to 9 million tons of pig iron and reprocessed products; in 2025, reach 10 to 12 million tons of pig iron and reprocessed products.

b) Steel Billet Production (Raw Steel)

In 2010, reach 3.5 to 4.5 million tons; in 2015, reach 6 to 8 million tons; in 2020, reach 9 to 11 million tons; and in 2025, reach 12 to 15 million tons of steel billets.

c) Finished Steel Product Production

In 2010, reach 6.3 to 6.5 million tons (1.8 to 2.0 million tons of flat products); in 2015, reach 11 to 12 million tons (6.5 to 7.0 million tons of flat products); in 2020, reach 15 to 18 million tons (8 to 10 million tons of flat products) and in 2025, reach approximately 19 to 22 million tons of finished products (11 to 13 million tons of flat products and 0.2 million tons of special steel).- d) Export of Various Types of Pig Iron and Steel

In 2010, export reaching 0.5 to 0.7 million tons; in 2015, export reaching 0.7 to 0.8 million tons; in 2020, export reaching 0.9 to 1.0 million tons; and in

2025, export approximately 1.2 to 1.5 million tons. These export targets may be adjusted to suit specific circumstances to ensure stability in the domestic market.

3. Content of the Planning

a) Demand for Steel Products

The demand for finished steel products in Vietnam is expected to reach about 10-11 million tons in 2010; about 15-16 million tons in 2015; about 20-21 million tons in 2020; and about 24-25 million tons in 2025.

b) Planning for Major Investment Projects

Based on the allocation of iron ore resources, geographical location, infrastructure conditions, and distribution of steel consumption demand, implement the following major projects:

- Period 2007 - 2015:

Ha Tinh Steel Complex, using Thach Khe iron ore mine: planned capacity of 4.5 million tons/year, divided into two phases, with phase 1

+ estimated at 2 to 2.5 million tons. Investment form is expected to be joint venture investment domestically and internationally. Phase 1 production start-up time is expected in 2011 Dung Quat Steel Complex (Quang Ngai), capacity of 5 million tons/year, divided into two phases, using domestic and imported iron ore. Investment form - 100% foreign capital. Phase 2 operation start-up time is expected from 2011 to 2015; - 2012;

+ Hot Rolled Coil, Cold Rolled Coil, and High-Quality Zinc Plated Steel Mill project with a capacity of 3 million tons/year, with phase 1

+ achieving 0.7 million tons/year. Investor is the POSCO Group (South Korea), 100% foreign investment; High-Quality Hot Rolled Coil and Hot Rolled Steel Strip Mill project with a capacity of 2 million tons/year. Investment form - joint venture between the ESSA Group (India) and some domestic enterprises. Expected to commence construction during the 2007 - 2009 period;

+ Expansion of production at Thai Nguyen Steel Company Phase 2: comprehensive investment in mining and metallurgical processes (blast furnace-oxygen converter). Capacity around 0.5 million tons of square billets/year, expected to start production in the 2009 - 2010 period;

+ Lao Cai Steel Complex, using Quy Sa iron ore mine: blast furnace pig iron production, electric furnace steel production with a capacity of 0.5 million tons of square billets/year; expected to start production in the 2009 - 2010 period. In the 2016 - 2025 period, if there is a market, additional modern steel rolling mill lines with a capacity of 0.5 million tons/year will be invested;

+ Develop medium and small-scale blast furnace pig iron production projects in Lao Cai, Tuyen Quang, Cao Bang, Ha Giang, Bac Kan, and Yen Bai with a total capacity of about 1 million tons of pig iron/year; flat billet production plants of Cuu Long Steel Company, square billet production plants of Viet Steel Company, and South Vietnam Steel Corporation (VSC);

+ Complete construction and put into operation some smaller-scale flat product rolling mill projects: two hot rolled coil production plants of VINASHIN and Cuu Long Steel Company; cold rolled coil production plants of LILAMA, Phase 2 of VSC's Hot Rolled Coil Plant, Hoa Sen Company, Formosa Steel, Sun Steel, and Bach Dang Company

+ - Period 2016 - 2025: ....

Direct Reduced Iron (DRI) Electric Arc Furnace Steelmaking Project with Midrex or HYL technology using natural gas, with advanced equipment and technology at world-class levels, with a scale of 1.5 million tons of flat billets (Option 1) or 1.5 million tons of hot rolled coils (Option 2) annually.

+ Investment period: Option 1 is expected in the 2016 - 2020 period (located in Ba Ria-Vung Tau, potentially supplying flat billets to hot rolling mills in the Southern Key Economic Zone); Option 2 is expected in the 2016 - 2025 period (located in Binh Thuan to utilize natural gas from the Phu Khanh Basin and the northern part of the Cuu Long Basin).

Investment form: 100% foreign investment or joint venture between domestic and foreign investors.

The form of investment: 100% foreign direct investment or joint ventures with domestic and foreign entities.

+ Study and invest in some projects for producing steel strip billets, large steel sections, and seamless steel pipes with advanced technology, with production capacity of approximately 1 million tons of finished steel products/year to serve shipbuilding, oil and gas, heavy machinery manufacturing, and super-heavy industries. Investment form: 100% foreign direct investment or joint ventures between domestic and foreign investors.

+ Study and invest in a special steel plant with production capacity of about 0.3 to 0.5 million tons/year to serve machinery manufacturing and national defense industry.

* The list of projects planned for investment during the period 2007 - 2025 of the Vietnamese Steel Industry is attached as Appendix.

c) Main solutions and policies

- Capital investment solutions

The capital investment demand for development of the Vietnamese Steel Industry during the period 2007 - 2025 is estimated at around 10 to 12 billion USD, of which the period 2007 - 2015 is about 8 billion USD. To meet this capital investment need, implement the following solutions:

+ Diversify capital investment for the Steel Industry from various sources such as self-owned capital, preferential loans (for steel billet production projects), commercial loans both domestically and internationally, government bonds, corporate bonds, project bonds, and foreign direct investment;

+ Flexibly utilize capital from financial organizations through equipment leasing and deferred payment purchase forms; collaborate with major steel consumers in other national economic sectors such as shipbuilding, automobile and motorcycle manufacturing, machinery manufacturing, national defense industry, construction, transportation, etc.;

+ Promote the shareholding reform of state-owned enterprises in the Steel Industry to diversify ownership and mobilize capital from shareholders. Encourage listed companies in the Steel Industry to issue stocks to attract indirect investment.

- Investment cooperation solutions

Focus on international investment cooperation mainly in ironmaking, steel billet production, and flat product rolling, especially for large-scale projects (over 1 million tons/year).

- Solutions to ensure primary raw material supply.

In the short term, implement iron ore exports to import coking coal and bituminous coal in exchange with Chinese partners. In the long term, it is necessary to develop a common strategy for mineral imports and exports nationwide to ensure a stable supply of coking coal and bituminous coal for sustainable development of the Steel Industry.

- Export-import solutions and market development

+ Protect the domestic market by technical barriers and legal quality and environmental standards to prevent the entry of low-quality and unsafe products into the Vietnamese market;

+ Continue to study and improve the legal system to perfect the steel product market, create close links, share profits, and assume shared responsibility between producers and steel traders;

+ Improve competition policy and laws, strengthen enforcement against monopolies, market manipulation, and dumping.

- Human resource development solutions

Strengthen technical facilities and the quality of teaching staff at vocational training schools to have the capacity to train workers to meet labor demands in the metallurgical industry. Emphasize overseas training and invite foreign experts to train at factories.

- Science and technology development solutions

Enhance international cooperation, consolidate scientific and technological relations between production units and research and development agencies, universities both domestically and internationally to promote the transfer of new technologies and techniques into the Vietnamese Steel Industry.

- Environmental protection solutions

+ Limit and reduce the degree of pollution increase. New metallurgical production facilities must apply modern and advanced technology, equipped with waste treatment devices to minimize pollution and meet environmental standards. Do not approve investment projects in metallurgy that do not have or do not register to meet environmental standards and impact assessment reports;

+ Develop plans to relocate and deepen investments to reduce environmental pollution for steel rolling plants located in cities or traditional craft villages;

+ Implement plans to renovate and gradually eliminate the use of outdated technologies and machines such as blast furnaces under 200m (excluding blast furnaces specifically for mechanical casting), electric furnaces and open hearth furnaces under 20 tons/batch (excluding detail casting furnaces), steel rolling lines with capacity under 100 tons/hour (excluding stainless steel and high-quality steel rolling lines), and other obsolete auxiliary equipment;³ Steelmaking, billet, and rolled steel production plants initiated construction from January

+ 2011 18 onwards, in addition to using modern and environmentally friendly technology, integrated equipment with high interconnectivity and low consumption of raw materials and energy, must also meet the following conditions: Blast furnace (BF) effective volume not less than 700 m

Electric furnace (EAF) minimum capacity of 70 tons/batch;³;

Basic oxygen furnace (BOF) minimum capacity of 120 tons/batch;

Steel rolling line capacity of 500,000 tons/year or more.

Strictly control chemical safety and emissions, particularly hazardous chemicals at cold-rolled steel product, metal-coated, organic-coated film production facilities, laboratories, coke production, sintering, and iron ore reduction facilities.

+ - Management solutions: issue mechanisms and policies to encourage and reasonably protect investment in upstream production (large-scale iron ore mining, processing, pig iron, billet, and steel production), building integrated metallurgical complexes and large-scale flat product rolling mills.

- Accelerate restructuring and reorganization of state-owned enterprises to enhance competitiveness. Encourage the establishment of joint-stock companies involving state-owned enterprises, various economic sectors, and domestic and foreign economic components.

- Strengthening the work of reform and restructuring state-owned enterprises to enhance competitiveness. Encourage the establishment of joint-stock companies involving state-owned enterprises, various economic sectors, and economic components both domestically and internationally.

Article 2. Implementation of the planning

1. The Ministry of Industry and Trade:

- Is the state management agency for the Steel industry, with the task of monitoring and inspecting the investment and business operations of the Steel industry according to the approved Planning. Regularly organize updates and adjustments to the Planning in accordance with the country's socio-economic development situation.

- Take the lead and coordinate with relevant ministries, sectors, and localities to study, improve, and propose new mechanisms, policies, and tools for:

+ Effectively protecting domestic steel production from competition with foreign steel products in line with Vietnam's commitments to integration;

+ Strengthen market management against fake and counterfeit goods, trade fraud; develop and socialize the distribution system to stabilize the steel market;

+ Enhance trade promotion activities and support efforts to find and develop export markets for iron and steel products.

2. The Ministry of Planning and Investment:

Take the lead and coordinate with the Ministry of Industry and Trade to call for investment cooperation to develop key projects in the steel industry such as the Thach Ke iron ore mine and the Ha Tinh integrated steel plant. Guide and create favorable conditions for attracting investment and issuing investment certificates for projects within this Planning.

3 . The Ministry of Finance:

Take the lead and coordinate with the Ministry of Industry and Trade and the Ministry of Planning and Investment to research, improve, and propose financial mechanisms and tax policies on imports and exports to promote investment development and restructuring of the Steel industry.

4. Ministry of Transport:

Take the lead and coordinate with the Ministry of Industry and Trade in planning and implementing the transportation network planning, particularly railways and seaports, supporting infrastructure development for the steel industry in Lao Cai, Hai Phong, Ha Tinh, Ba Ria-Vung Tau, Quang Ngai, and other localities.

5. The Ministry of Science and Technology:

Take the lead and coordinate with the Ministry of Industry and Trade to vigorously promote scientific and technological activities in the metallurgy sector towards absorbing and applying advanced technology and techniques from around the world; guide and support enterprises in effectively adopting production billet and finished steel technologies.

6. Ministry of Natural Resources and Environment:

- Take the lead and coordinate with relevant ministries, sectors, and localities to strictly manage iron ore and flux mineral resources; direct and increase investment in exploration and evaluation activities of iron ore and flux minerals according to the approved Planning;

- Create favorable conditions for granting permits for mineral activities related to the Steel industry Development Planning.

7. People's Committees of provinces and centrally governed cities:

- Direct the implementation of investment and development of steel production facilities in their respective areas in accordance with this Planning;

- Coordinate with relevant ministries and sectors: organize and inspect the implementation of this Planning; promptly address and resolve difficulties and obstacles for investors and steel production facilities in their areas.

8. Vietnam Steel Association:

- Fulfill the role of connecting and representing steel enterprises with state management agencies;

- Proactively propose and participate with relevant ministries and sectors in developing mechanisms and policies for development; cooperate in resolving issues arising during production and business operations, especially during international integration.

Article 3This Decision replaces Decision No. 134/2001/QD-TTg dated September 10, 2001 of the Prime Minister and takes effect 15 days after its publication in the Official Gazette. of the Prime Minister, shall take effect fifteen days after its publication in the Official Gazette.

Article 4Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial and centrally governed city People's Committees are responsible for implementing this Decision./.