Ha Tinh proposes to stop Thach Khe iron mine

The People's Committee of Ha Tinh province has just submitted a report and recommendations to the Ministry of Planning and Investment regarding the Thach Khe iron ore mining project. In the document, this agency repeatedly expressed concerns about the project's environmental issues, especially after the disaster at the Formosa factory.

According to this agency, the exploitation of Thach Khe iron mine and the construction of a steel factory using this iron ore are included in the Master Plan for Socio-Economic Development up to 2020 and have been approved by the Government. However, after 5 years of implementing the plan, many economic and social factors have changed, especially after the marine environmental incident in 2016, it is necessary to set requirements and review the industrial development plan, especially heavy industrial projects along the coast of Ha Tinh, including Thach Khe iron mine... with the principle of ensuring the environmental load capacity along the coast, not trading the environment at all costs for economic development...

In the document sent to the Ministry of Planning and Investment, the report of the People's Committee of Ha Tinh province devoted a lot of time to analyzing the project's impacts on environmental issues that the investor's environmental impact assessment (EIA) report had not clearly stated.

The EIA report identified many toxins and large volumes of mine wastewater pumped from the mine, poured into a 2-hectare tank for natural sedimentation, and then flowed directly into the Thach Dong River and Thach Hai Sea through a canal.

“Untreated mine wastewater is discharged directly into the sea in large volumes, and it is not yet possible to confirm whether the cumulative impact of heavy, toxic metals accompanying iron ore over the 52-year life of the project can cause a marine environmental disaster or not. This is a serious issue after the lesson of the marine environmental incident that occurred in the locality in the recent past,” the report stated. Meanwhile, vTreating wastewater to ensure safety before discharging it into the sea will increase investment costs by about 2,700 billion VND.

With the above existing problems, the Provincial People's Committee believes that the Ministry of Natural Resources and Environment needs to review and comprehensively assess the impacts and supplement specific environmental protection solutions for the project.

According to hydrogeological reports and experts, the hydrogeological conditions of Thach Khe iron mine are very complex, making mining operations difficult. When mining, there will be dangers, especially serious when the mine has the largest water flow in Vietnam, like a river.

The Thach Khe iron ore mining and processing investment project, invested by TIC, started in 2009.According to the assessment, the total output of ore exploited from Thach Khe mine can reach 370 - 400 million tons. Initially, 10 - 15 million tons can be exploited per year.

The project was temporarily suspended 2 years later (2011) due to problems with shareholders' capital contributions and difficulties in capital mobilization. From the initial total investment of 14,500 billion, the investor had to recalculate and reduce it to 13,000 billion VND, of which phase one was 6,700 billion.

The project's lifetime revenue is estimated at about 35 billion USD, contributing about 9 billion USD to the budget, contributing to an annual GDP increase of 0.3 - 1%.

By March 2017, the project continued to reduce its investment capital to VND12,200 billion. After two adjustments, the total investment capital of this project decreased by about VND2,300 billion.

At the end of 2017, the Ministry of Planning and Investment also proposed to stop the project, but faced conflicting information from the Ministry of Industry and Trade and the project investor.

The engineering geology is not reliable enough to design the exploitation, the number and specific locations of the caves have not been determined, on the other hand, the area has experienced a 6.0 Richter scale earthquake. Therefore, the exploitation can create dangerous and unsafe stimulating earthquakes.

From a technical and mining technology perspective, according to the assessment of the Vietnam Union of Science and Technology Associations, excavating soil and rock to the dumping site and transporting ore to the warehouse will cause many environmental consequences and accidents are likely to occur.

The option of transporting iron ore by road has many shortcomings such as the traffic volume is too large, the road cannot meet the load capacity, easily causing traffic insecurity, environmental pollution, etc. Meanwhile, if it is a waterway option, building a port here is not feasible, the investment value can be up to billions of USD without ensuring economic efficiency.

Regarding the Thach Khe iron ore consumption market, according to this agency, reports from domestic enterprises show that only one enterprise has signed a long-term agreement to purchase Thach Khe ore from 2017-2021 with 3 million tons per year, and there has been no commitment in the later period.

Furthermore, in reality, there is no steel mill that is currently ready to use all of Thach Khe iron ore, so it raises the feasibility of the partner's commitment to consume the ore.

Regarding economic efficiency, according to the adjusted project approved in 2014, the economic efficiency index was calculated as feasible. However, the investor, Thach Khe Iron Joint Stock Company (TIC), has not yet calculated the economic efficiency when approving and after 2 adjustments, it has not yet included all related costs in the total investment.

“If updated and calculated fully, the investment capital will increase, the project investment cost will likely increase 1.5-2 times compared to the total approved investment,” the document stated, adding that the investment efficiency of the project is not accurate and not convincing.

According to the provincial People's Committee, the project documents show that the approved mine reserves are 544 million tons, but current technology only allows the exploitation of 369 million tons. Thus, after exploiting the amount of ore according to TIC's plan, there will still be 174 million tons underground - a level larger than the total reserves and resources of other mines in the country combined, causing a huge loss of resources.

In addition, the investor only has a plan to contribute enough capital of 30% for phase one, which is more than 2,000 billion VND, but has not yet had a plan to increase equity capital for both phases (more than 4,000 billion VND).

According to the People's Committee of Ha Tinh province, after more than 10 years of implementing the project, it has left many consequences and difficulties in terms of socio-economy, national defense and security for the communes in the directly affected areas, leading to the localities in the area becoming the most difficult communes of Thach Ha district, even of Ha Tinh province.

“Before the project was implemented, Thach Hai beach was an ideal resort and beach area with good development potential. When it first opened, there were nearly 30 restaurants, hotels, and sports facilities serving tourists… Up to now, due to the impact of the project, the construction of these works has not been carried out, the system has degraded, the number of tourists has seriously decreased, unemployment has occurred, affecting people's income,” the report clearly stated the current situation.

For more than 10 years of project implementation, people in the communes of the project area have not been granted residential land, have not been allowed to build or expand their houses, while the demand is very high, affecting people's lives. Therefore, according to the People's Committee of Ha Tinh province, the majority of people want to stop implementing the project.

Although stopping the project at this time will have a certain impact on the socio-economic development orientation, businesses will lose capital invested in the project, but according to the locality, it is forced to accept to ensure environmental issues and sustainable economic development.

“The Provincial People's Committee requests the Ministry of Planning and Investment to recommend the Prime Minister to consider ending the project, and at the same time direct the settlement of backlogs, restore the original state, restore production, and stabilize people's lives,” the document stated.

Regarding the invested capital, the province believes that it is not a total loss because part of that capital is invested in infrastructure, site clearance, vocational training, and paid to the budget. The people in the region and the state benefit from this investment. In addition, the capital invested in machinery and equipment can still be used by the enterprise for other projects or liquidated to recover capital, reducing losses...