Vietnam’s first alumina plant may not deliver on initial economic promise, official admits

Vietnam’s state coal and mineral group Vinacomin has admitted that it has not conducted a reassessment of economic benefits for the country’s first alumina plant, which is scheduled for a test run this June.

The Tan Rai plant is designed to have an annual production capacity of 600,000 tons of alumina, a white powder made from bauxite ore that is used to produce aluminum.

The Ministry of Industry and Trade late last year ordered Vinacomin to evaluate the project again after more construction work was added to it.

Duong Van Hoa, deputy general director of Vinacomin, told Thanh Nien that economic benefits of the US$700-million project have not been reassessed, but they can be lower than expected if construction costs of new roads to the plant are included in the project.

Vinacomin is seeking government permission to fund construction of roads using its own budget, instead of adding the costs to the project. The proposal has not been approved.

The group has also requested the government to lower the export tariff of alumina from 20 percent to between zero and 5 percent to increase the economic benefits of the plant.

An official of the Ministry of Industry and Trade said the request needs to be reviewed by legislators first before a decision can be made.

The plant in the Central Highlands province of Lam Dong is expected to contribute VND400-450 billion to the state budget annually, a local official said. It will also pay VND20-30 billion in environmental taxes per year, he said.

Vinacomin is developing another alumina project in Dak Nong Province which has a projected initial annual output of 600,000 tons.