Vietnam's prime minister halted work at a $10.6 billion steel plant on concern over its environmental impact, in an effort to prevent another "Formosa incident", local media reported, citing a government statement.

Steel maker Hoa Sen Group, the plant's investor, was not immediately available for comments.

The company announced plans last year for the project, a complex of more than 1,700 hectares (4,200 acres) that could produce 16 million tons of steel a year.

Prime Minister Nguyen Xuan Phuc requested related parties to clarify market demand and environmental impact, state broadcaster Vietnam television (VTV)'s website said.

A year ago, a steel plant run by Taiwan's Formosa Plastics Corp was the site of one of Vietnam's worst-ever environmental disasters. An accidental toxic-waste spill polluted more than 200 km (125 miles) of coastline and killed more than 100 tonnes of fish.

The Party has stepped up scrutiny of investments since that incident.

In February, the government said it would not grant licenses to any projects with a high pollution risk.

Deputy Prime Minister Trinh Dinh Dung asked the environment ministry to revise rules and to intensify inspection and supervision of projects at the investment and construction stage.