According to an anonymous media source from Vietnam, Lam Dong Aluminium-Bauxite Complex that has recently published its results has incurred a loss of nearly VND3.7trn ($62m) after three years of operation.
An inspection has been carried out at the facility and the conclusion is that it had not been productive and investment costs had increased much higher than estimated. Originally, the investment for the project was VND7.7trn (USD337m) and was expected to be completed in 2009.
The complex was expected to produce 600,000 tonnes of alumina per year and increase its output to 1.2 million tonnes by 2015. However, the investment has increased to VND15.4trn (USD805m) and the deadline was pushed further to 2013 and 2014. Since 2014, Vinacomin has completed the main project and started constructing the supporting infrastructure including the red mud reservoir.
The fact that the facility's capacity was increased to 650,000 tonnes per year, while the technology and tax policies were changed and wages increased along with other compensations, it affected the results. Inflations, inexperienced investors and contractors have also contributed in rising investment cost.
{googleAdsense}
For the period of October 2013 to September 2016, the complex posted losses of VND3.7trn (USD162m). Business and production loss totalled VND2.5trn and exchange rate discrepancies caused losses of VND1.17trn.
Delay in commissioning, falling aluminium prices, increasing taxes and other adjustments had also added to the losses. On a positive note, the project's operations are stable now project is expected to recover the losses this year. Construction was halted for two years for re-examination of its effectiveness and operational relevance. The project has started pilot operation and will go into commercial operation within the first quarter of FY 2017.
Responses
