A Vietnamese conglomerate is poised to build an enormous steel complex, despite fallout from a similar large-scale project of Taiwanese Formosa Group which caused an environmental disaster before it was even commissioned.

Hoa Sen Group is expected to invest US$10.6 billion into the Hoa Sen – Ca Na steelmaking complex in the south-central province of Ninh Thuan, according to the draft of a strategic cooperation plan recently approved by the provincial administration.

The corrugated sheets producer also has plans to launch four other major projects in Ninh Thuan, including an industrial park, cement making factory, a hydro- and renewable power plant, and a complex of logistics facilities.

On top of these massive projects, Hoa Sen Group also wants to develop a $804 million multifunctional port capable of handling 53 million metric tons of cargo and 300,000 DWT capacity docking ships.

The developer asserted that the steel complex will adopt modern technology and located on a specific 1,500 hectare plot allocated by the Ninh Thuan administration.

“The developer is completing procedures to acquire an investment license and conduct environmental impact assessment and field studies,” the province’s deputy chairman Pham Van Hau said.

An agency-level official at the Ministry of Industry and Trade has confirmed to Tuoi Tre that the Hoa Sen Group steel project has obtained in-principle approval from the ministry.

The official said the Hoa Sen – Ca Na steelmaking complex will consist of ten blast furnaces and is expected to be developed in stages.  Construction could last until 2025 or 2030.

In the initial phase, the complex will operate three to four blast furnaces, each capable of producing 1.5 million metric tons a year. By 2020, the plant will aim to produce 4.5 million metric tons of steel products.

Lesson from Formosa

The controversial project has captured the attention experts and community members concerned about Vietnam’s steel industry, which already operates at a surplus and has production facilities located across the country.

Further complicating the matter is The Hoa Sen Group steel mill’s planned location and its proximity to the sea in Ninh Thuan, raising environmental concerns, particularly in the wake of the fish death epidemic caused by the Formosa Steel plant that took hold of four central provinces in April and May.

All of these conflicts don’t seem to trouble the Ministry of Industry and Trade official.

He said that Vietnam’s steel production currently grows around six percent per year and the Southeast Asian country is still expected to suffer a supply shortage of 15 million metric tons of steel by 2020 and 22 million metric tons by 2025, even with the Formosa plant joining the supply.

As for environmental concerns, the official said it is “the responsibility of the Ministry of Natural Resources and Environment.”

In the meantime, Hau, the province’s deputy chairman, asserted that authorities’ top priority is to ensure the safety of the environment and that the province will keep a close watch on the project’s environment protection and technology.

Pham Chi Cuong, chairman of the Vietnam Foundry and Metallurgy Science and Technology Association, said the lesson learned from Formosa should never be forgotten.

“We should have a panel to evaluate every single aspect of the new project, with a special focus given on its possible environmental impacts,” he suggested.

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