Vietnam, China to discuss plans for bauxite project

Vietnam, China to discuss plans for bauxite project

Dow Jones, Hanoi

Officials from Vietnam's Ministry of Industry and China's
Nonferrous Metal Corp. will hold talks next week on plans to
develop a bauxite project in Tay Nguyen, an industry official
said on Thursday.

"We will discuss specific steps to be able to start a
prefeasibility study for the bauxite project," Tran Minh Huan,
director of the MOI's International Cooperation Department, told
Dow Jones Newswires.

Bauxite is a mineral ore used to produce alumina, a raw
material for aluminum production. Vietnam's Tay Nguyen, or
Central Highlands, is estimated to have huge reserves of high-
quality bauxite ore - up to billions of metric tons - and the
country is very eager to develop its aluminum industry.

"China officials are indicating they want to launch a
preliminary study, which will last nine months, before both sides
can go into further details," Huan said.

"If China wants to produce 2 million tons of alumina each year
for its own market, it will need to build production and port
facilities worth up to more than US$1 billion," Huan said.

While the Central Highlands is rich in the bauxite ore, its
infrastructure is poor and investors wanting to develop the area
must be capable of building roads and a railway, Huan said.

Investors would have to build a 450-kilometer railway linking
Tay Nguyen to the Thi Vai port in Ba Ria-Vung Tau province if
they want to export 2 million tons of alumina each year, he said.

Vietnam's National Mineral Corp., or Vimico, meanwhile, is
also planning to build a $650 million aluminum project in Tay
Nguyen. The project, which is scheduled for construction in 2004,
will be capable of producing 300,000 tons of alumina, of which
140,000 tons will be used for the domestic market and 160,000
tons for exports.

Vietnam imports all its aluminum products, totaling 80,000-
90,000 tons a year, and demand is expected to grow by 8 percent
to 10 percent in the coming year.