Vietnam firm plans to build $10.6bn steel mill on drought-affected land

A massive steelmaking complex is poised to be established in Ninh Thuan, one of Vietnam’s most drought-prone provinces

A man gets fresh water from a makeshift tank provided by a local military unit in Ninh Thuan Province, located in south-central Vietnam.

If there is something that best describes Ninh Thuan, it is the harsh weather conditions that make the south-central province, some 350km northeast of Ho Chi Minh City, one of the country’s most drought-prone areas.

While fresh water is a luxury in some places in Ninh Thuan, a local corrugated iron sheet maker has plans to establish an enormous US$10.6 billion steelmaking complex there.

Hoa Sen Group is confident that there is currently sufficient water supply for its megaproject, construction of which is scheduled to last until 2025 or even 2030.

But in reality there seems little proof to support the company’s water claim.

Where fresh water is a luxury

The Hoa Sen – Ca Na steel complex is set to be developed in Thuan Nam District, the location with the most severe fresh water shortage in the province.

Some 2,850 out of 11,149 households in the district currently live without a sufficient supply of clean water, according to a drought report released by the provincial agriculture department in June.

“Fresh water here is extremely rare and expensive,” Le Van Duc, a shrimp farmer in Ca Na Commune of Thuan Nam District, told Tuoi Tre (Youth) newspaper.

Duc said local residents had to live in hardship over the last year and earlier this year, and many families like his have to buy three four-cubic-meter tanks of water a month for household purposes, with each costing VND250,000 ($11.16).

“We had to wait four to five days after making the order to see the tanker truck arrive,” he said.

Nguyen Van Duc uses water from the tanks he bought for nearly  each. Photo: Tuoi Tre
Nguyen Van Duc uses water from the tanks he bought for nearly each. Photo: Tuoi Tre

In Ca Na, local residents have been forced to ration the use of fresh water to “15 liters per person per day,” in order to save water for the surrounding shrimp farms, Duc said.

“It has been raining more often recently and the water plant has increased supply, but the hardship is still there,” he concluded.

The water plant he mentions is that of the Ninh Thuan Water Supply Co., the biggest source of clean water for people in Ca Na, where most wells are affected by saltwater intrusion.

In the nearby commune of Phuoc Diem, the situation is much tougher.

Ninety percent of households in two of the commune’s villages have suffered water shortages over the last three months, according to a village head.

The Ninh Thuan Water Supply Co. currently fails to supply fresh water to those villages as a pumping station in charge of the area has yet to be put to use.

“As a temporary solution, we have allowed tanker trucks to come and get water and resell to local residents while waiting for the station’s commission,” an official from the pumping facility said.

Plant or people?

Hoa Sen Group has proposed a daily water demand of 21,000 cubic meters, including 20,000 cubic meters of raw water and 1,000 cubic meters of fresh water.

The supply could be provided by the Phuoc Nam – Ca Na water plant, run by the Ninh Thuan Water Supply Co.

The Phuoc Nam – Ca Na facility was built to serve an industrial park, which is now inactive, so it may prioritize supply for the steelmaking complex first, according to Ninh Thuan Water Supply Co. director Pham Hong Chau.

“Phuoc Nam – Ca Na can meet the demand of 21,000 cubic meters of water a day,” Chau told Tuoi Tre.

“But if Hoa Sen Group wants to increase supply, that for local households will certainly fall short.”

The entire water supply for Thuan Nam and several neighboring districts is sourced from the Cai River through the Nha Trinh dam and a 60km pipeline system.

However, an executive of the company that operates the irrigation works in Ninh Thuan said that water reserves at the dam were only enough to serve the cultivation of some 12,000 hectares of crops during the dry season.

“It is already a big issue using the water reserves there to ensure household and agriculture demands,” he said, adding that the decision to use water from the dam of the Hoa Sen Group project “should be reconsidered.”

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