Decision No. 167/2007/QĐ-TTg Approves the Planning Scheme for Exploration, Exploitation, Processing, and Utilization of Bauxite Ore for the Period 2007-2015, with Consideration to 2025

Pursuant to …;

Approving the Planning for Exploration, Exploitation, Processing, and Utilization of Bauxite Ore for the Period 2007-2015, with Consideration to 2025

PRIME MINISTER

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

Considering the proposals of the Minister of Industry and Trade and the Minister of Planning and Investment,

DECISION:

Article 1Approving the Planning for Exploration, Exploitation, Processing, and Utilization of Bauxite Ore for the Period 2007-2015, with Consideration to 2025, with the main contents as follows:

Clause 1. Views

a) The development of the bauxite mining and processing industry must be consistent with the planning for the development of the industrial sector in Vietnam, the economic and social development planning of localities, and the planning for the development of related infrastructure (transportation, seaports, electricity...). Ensuring that exploration, exploitation, and processing of bauxite resources are conducted efficiently, economically, environmentally friendly, and combined with economic and social development and national security and defense in areas with bauxite deposits, particularly in the Central Highlands region.

b) Building and developing the bauxite ore mining and processing industry with modern technology and environmental friendliness. The main form is for Vietnamese enterprises to take the lead in investment, calling for domestic and foreign partners to participate in capital contribution on the principle that the Vietnam National Coal-Mineral Industries Group (for bauxite areas in the Central Highlands) holds controlling shares (>50%) to ensure autonomy and sustainable development, and participation in the global alumina and aluminum markets.

c) Developing the industry for producing alumina and smelting aluminum must ensure balanced economic and social development in the Central Highlands region and related localities.

2. Development Orientation

a) For the period 2007-2015:

- Concentrating investment in transportation infrastructure including railway connecting from the Dak Nong mine area down to the Lam Dong mine area to seaports and seaports in Binh Thuan;

- Strengthening exploration work and upgrading bauxite resource reserves to ensure reliability for exploitation;

- Investing in bauxite mining and alumina production to meet export demand and provide raw materials for aluminum electrolysis domestically;

- Investing in aluminum electrolysis plants to supply aluminum metal for domestic needs and exports.

b) For the period 2016-2025:

- Increasing capacity for bauxite mining and alumina production to meet export demand and provide raw materials for aluminum electrolysis domestically;

- Investing in aluminum electrolysis plants (increasing capacity and/or building new ones) to supply aluminum metal for domestic needs and exports.

c) Investment cooperation orientation: mainly through joint stock companies. In joint stock companies for bauxite mining and alumina production, it is necessary to ensure the principle that Vietnam holds controlling shares. Joint ventures and 100% foreign investment may be applied in cases of full-package investments including power plants and aluminum electrolysis plants, using alumina produced in Vietnam.

3. Development Goals

a) Regarding bauxite exploration: strengthening exploration work to ensure reliable reserves for the sustainable development of the bauxite mining and processing industry nationwide.

b) Regarding mining and processing:

- Mining bauxite and producing alumina to meet aluminum electrolysis standards. Projected alumina production in 2010: 0.7 - 1.0 million tons/year; in 2015: 6.0 - 8.5 million tons/year; in 2025: 13 - 18 million tons/year. Before 2015 - projected alumina products for export; after 2015 - alumina production for domestic aluminum electrolysis and export;

- Producing aluminum hydroxide to meet domestic needs and for export. Projected production in 2010: approximately 0.65 million tons;

- Producing electrolytic aluminum meeting international commercial standards. Projected production before 2015: approximately 0.2 - 0.4 million tons, increasing production after 2015 according to market demand and power balance;

- Producing refined bauxite concentrate with Al2O3 content ≥48% (for mines with limited reserves in the northern coastal areas).

c) Regarding environmental protection: bauxite mining must go hand-in-hand with land reclamation and ecological environment protection at mining sites. Ensuring the preservation of cultural and tourism heritage.

4. Zoning Planning

a) Medium and small-scale bauxite mining and processing regions: including Ha Giang, Cao Bang, Lang Son, and central coastal regions.

- Ha Giang region (diaspore bauxite with small and scattered reserves).

- Cao Bang and Lang Son regions have moderate reserves, with scattered deposits.

- Central coastal region including Van Hoa and Quang Ngai mines (both have small and scattered reserves).

b) Industrial-scale bauxite mining and alumina production regions: including Dak Nong, Bao Loc - Di Linh, Kon Plong - Kanak, and Phuoc Long regions (with large and concentrated bauxite reserves).

c) Prohibited and restricted mining activity zones: Provincial People's Committees shall take the lead, coordinating with relevant ministries and sectors to delineate and approve prohibited and restricted mining activity zones.

d) Tendering zones for mining activities: piloting tendering for medium and small-scale bauxite mines in Ha Giang, Cao Bang, Lang Son, and central coastal regions when there are multiple enterprises with sufficient capability, experience, and interest in participating in mining activities (excluding mines already approved by the Prime Minister).

5. Planning for Exploration and Mining of Bauxite

a) Bauxite Resources: total proven and forecasted bauxite ore reserves are about 5.5 billion tons, including about 91 million tons in the northern region and about 5.4 billion tons in the southern region. Proven reserves from category C2 are about 4.4 billion tons, with forecasts of about 1 billion tons.

(Detailed reserves and forecasted bauxite resources in Vietnam are shown in Table 1 and Table 2 of Appendix I).

b) Exploration Planning for the Period 2007-2015:

- The Vietnam National Coal-Mineral Industries Group will lead the exploration of all bauxite mines in the Central Highlands region (excluding those already approved by the Prime Minister for other entities to implement) to assess reserves as a basis for implementing bauxite-alumina-aluminum investment projects.

- Vietnam Coal-Mineral Industry Group and enterprises of all economic components with the capacity and experience to explore bauxite deposits in Ha Giang, Cao Bang, Lang Son provinces and along the central coast (excluding cases where bauxite mines have been approved by the Prime Minister).

Bauxite exploration projects for the period 2007-2015 are listed in Appendix II.

c) Planning for exploitation and processing of bauxite in Ha Giang, Cao Bang, Lang Son provinces and along the central coast:

- Scale of investment: with limited ore reserves, investments should be made on a medium and small scale.

- Depending on market demand, investment capability, and economic efficiency of each specific area, production volume and product types including refined bauxite concentrate with Al2O3 content ≥ 48%, aluminum hydroxide, alumina, and other bauxite-derived products serving domestic needs and exports (including refined concentrates) shall not be restricted.

- Forms of investment:

+ Encourage participation of all economic sectors with the capacity and experience in investment;

+ For alumina production, the main form is self-investment, calling for foreign partners to join as shareholders, with domestic enterprises holding controlling shares (> 50%). Consideration may be given to joint investment with foreign partners in the production of aluminum hydroxide and aluminum ingots.

d) Planning for exploitation and processing of bauxite in Bảo Lộc - Di Linh region: planning for two types of processed products: alumina and aluminum hydroxide.

- Aluminum hydroxide plant No. 1, expected capacity 100,000 tons/year. (Southern Basic Chemicals Company as the main investor). Expected bauxite source from Nam Phuong and Thang Loi Hill mines;

- Aluminum hydroxide plant No. 2, expected capacity 550,000 tons/year (Vietnam Chemicals Corporation as the main investor): investment form: joint venture for the aluminum hydroxide plant. Vietnam Chemicals Corporation will lead the mining operation and supply refined ore to the plant;

- Tan Rai - Bảo Lộc alumina plant: expected capacity of the alumina plant 0.6 million tons/year by 2010; expected to increase to 1.2 million tons/year after 2010. Ore source from West Tan Rai and Tan Rai mines (Vietnam Coal-Mineral Industry Group as the main investor).

đ) Planning for exploitation and processing of bauxite in KonpLong - Kanăk region

Period 2007-2015: invest in building one alumina plant with a capacity of 1-1.5 million tons/year using bauxite mined from Mang Den and Kon Ha Nung mines. The location of the plant will be in the mining area or near the deep-water port at Dung Quat in Quang Ngai province.

e) Planning for exploitation and processing of bauxite in Dak Nong region

- Period 2007-2015:

Planned construction of the following alumina projects:

+ Dak Nong Alumina Plant 1 (Invested by Nhan Co Joint Stock Company, controlled by Vietnam Coal-Mineral Industry Group): plant capacity 0.3 million tons/year with consideration for expansion to 0.6 million tons/year. Ore source from Nhan Co mine and nearby mines. Plant location in Nhan Co district, Dak Nong province;

+ Project Dak Nong Alumina Plant 2: plant capacity 1.5-2.0 million tons/year. Ore source from "1/5" mine and nearby mines. Plant location in Dak Nong province;

+ Dak Nong Alumina Plant 3: plant capacity 1.5-2.0 million tons/year. Ore source from Gia Nghia mine and nearby mines. Plant location in Dak Nong province;

+ Dak Nong Alumina Plant 4: plant capacity 1.5-2.0 million tons/year. Ore source from Tuy Duc, Dak Song mines and nearby mines. Plant location in Dak Nong province.

(Projects in Dak Nong province are led by Vietnam Coal-Mineral Industry Group for investment).

- Period 2016-2025:

Depending on market potential, planned expansion of the following alumina projects:

+ Dak Nong Alumina Plant 1: investment to expand plant capacity to 0.6-1.2 million tons/year. Ore source from Nhan Co mine and nearby mines;

+ Project Dak Nong Alumina Plant 2: investment to expand plant capacity to 3.0-4.0 million tons/year. Ore source from "1/5" mine and nearby mines;

+ Dak Nong Alumina Plant 3: investment to expand plant capacity to 3.0-4.0 million tons/year. Ore source from Gia Nghia mine and nearby mines;

+ Dak Nong Alumina Plant 4: investment to expand plant capacity to 3.0-4.0 million tons/year. Ore source from Tuy Duc, Dak Song mines and nearby mines.

g) Planning for exploitation and processing of bauxite in Bình Phước region

Period 2016-2025: invest in building one alumina plant with a capacity of 1-1.5 million tons/year using bauxite mined from mines in Bình Phước province. Plant location in Bình Phước province.

List of bauxite processing projects for the period 2007-2025 see Appendix III, list of bauxite mines exploited on an industrial scale see Appendix VII.

6. External transportation planning

Plan to construct a railway line from the Central Highlands to the coastal port in Bình Thuận with a double-track gauge of 1,435 mm (single track during the 2007-2015 period and upgraded to double track after 2015). During the 2007-2015 period, the route is expected to run from Dak Nong through Lam Dong to the coastal port in Bình Thuận, and after 2015, it is expected to connect to the Bình Phước alumina plant (depending on the progress of the Bình Phước alumina plant's operation) and link to Cambodia's bauxite mineral areas (depending on cooperation with other partners). Stage I transport capacity (until 2015) is about 10.0-15.0 million tons/year, Stage II (until 2025) is about 25.0-30.0 million tons/year.

7. Port planning

Plan to build a specialized port in the coastal area of Bình Thuận (North Hon Gio or Hon Ke Ga) to serve the development of the aluminum industry in the Central Highlands and South Central Coast regions. The port will accommodate ships of 30,000-50,000 tons. Stage I port capacity (until 2015) is about 10.0-15.0 million tons/year; Stage II (until 2025) is about 25.0-30.0 million tons/year.

The decision on the location for constructing a specialized port in North Hon Gio or Hon Ke Ga (Bình Thuận) will be made according to the principle of harmonious development between industrial development and tourism.

8. Planning for construction of aluminum electrolysis plants

a) Period 2007 - 2015: Encourage foreign partners to establish joint ventures for the construction of integrated power plants and aluminum electrolysis plants using alumina from Vietnam. The capacity of aluminum ingot production is 200,000 - 400,000 tons/year. The location for the aluminum electrolysis plant may be placed in Dak Nong, Lam Dong, Binh Thuan (near the seaport), Quang Ninh, and/or other areas within and outside the country (where there is a large, stable, and reasonably priced power supply).

b) Period 2016 - 2025: It is possible to invest in expanding and increasing the capacity of the aluminum electrolysis plant constructed and put into operation during the period 2007 - 2015, with the expanded aluminum ingot production capacity reaching 400,000 - 600,000 tons/year, or to invest in another aluminum electrolysis plant with a capacity of 200,000 - 400,000 tons/year at locations within and outside the country (where there is a large, stable, and reasonably priced power supply).

(See Appendix IV for the list of aluminum electrolysis projects).

9. Planning for the construction of factories producing raw materials and components

Investment in constructing factories producing caustic soda, soda ash, lime, carbon electrodes, and other raw materials and components should be commensurate with the production volume of alumina and aluminum ingots during each period. The location of the factory shall be selected by the investor in accordance with the socio-economic development planning of the locality.

10. Capital investment requirements

The estimated capital investment requirement for exploration, exploitation, and processing of bauxite during the period 2007 - 2025 is approximately 189,110 - 249,420 billion VND (equivalent to about 11.8 - 15.6 billion USD), including projects for bauxite mining and processing (alumina production and aluminum electrolysis) and infrastructure (railway and port) as shown in Appendix VI.

The expected sources of capital investment are as follows:

- Geological survey works: 760 billion VND (equivalent to about 47.5 million USD) to be arranged by enterprises themselves.

- Mining and processing works of bauxite (alumina production and aluminum electrolysis): 158,450 - 218,760 billion VND (equivalent to about 9.9 - 13.7 billion USD) from the following sources:

+ Share capital of domestic and international shareholders;

+ Loans from domestic and international commercial banks. The Government will consider guaranteeing foreign loans;

+ Funds raised from the stock market and bond issuance.

- Infrastructure investment works: 29,900 billion VND (equivalent to about 1.9 billion USD) from the following sources:

+ Official Development Assistance (ODA) loans;

+ State budget funds;

+ Participation of enterprises.

+ Loans from domestic and international commercial banks. The Government will consider guaranteeing foreign loans;

+ Funds raised from the stock market and bond issuance.

Article 2. Implementation

1. The Ministry of Industry and Trade is responsible for announcing the approved Plan, leading and coordinating with provincial People's Committees according to their functions, directing the implementation of the contents of the Plan, regularly reporting on the results of implementation, and conducting reviews and timely adjustments to the Plan during the implementation process, to be submitted to the Government for approval.

2. The Ministry of Planning and Investment shall mobilize and call for ODA funding and allocate resources for the preparation and implementation of investment in infrastructure projects (railway lines, seaports).

3. The Ministry of Natural Resources and Environment shall lead the implementation of planning for basic geological surveys, management, and storage of geological data on bauxite mineral resources of the country. Strengthen the activities of the mine inspection system, enhance management and operational capacity, and the legal basis of the inspection system from central to local levels, issue permits...

4. The Ministry of Transport shall lead the planning for investment in transportation routes and seaports serving the transportation needs for the development of bauxite mining and processing industry in the Central Highlands region, combining with the development of socio-economic activities.

5. The Ministry of Finance shall study and develop relevant financial mechanisms related to the contents of this Plan.

6. Provincial People's Committees, municipalities directly under the Central Government shall direct the implementation of the following tasks:

a) Strengthen the protection of mineral resources, including both currently exploited and unexploited mineral resources in their respective jurisdictions;

b) Strengthen inspections and audits of mineral resource operations;

c) Lead and coordinate with relevant agencies to review, delineate, and approve restricted areas for mineral resource activities in their respective localities.

7. The Vietnam National Coal-Mineral Industries Holding Corporation shall be primarily responsible for implementing the Plan in the Central Highlands.

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./.