Deputy Minister of Industry and Trade, Le Duong Quang, said that the ministry will also submit the report with an overview of all steel projects and forecasts about domestic demand after it checks the steel projects throughout the country.  

According to MOIT, most investors of big steel projects have plans to build separated power plants, which use heat abundant from furnaces, while also committing to use modern production technologies. Most of the projects have perfect reports regarding environmental impact. 

Meanwhile, environmentalists seem to not welcome steel projects, stating that Vietnam is turning itself into the ‘production workshop’ of the world, which is attracting projects of heavy and polluting industries. 

Deputy Minister of Natural Resources and the Environment, Tran Hong Ha, said that it is necessary to consider three important factors when licensing steel projects, including the real demand for steel in the domestic market, the efficiency of energy use, and the possible impacts on the environment and climate change.  

Meanwhile, in a letter to MOIT and relevant ministries, discussing the licensing to steel projects, the Chairman of the Vietnam Steel Association, Pham Chi Cuong, admitted that Vietnam still has to spend a lot of foreign currency to import steel projects it cannot make domestically, and that more steel investment projects are really a good thing. However, Cuong has called on state management agencies to consider the projects thoroughly before licensing 

According to Cuong, it is necessary to pay attention to iron ore and coal material sources for steel projects. If the steel mills use local iron ore, it is necessary to be sure that the material sources can provide enough materials for 20-30 years, or even 50 years. This is the average life expectancy of a furnace and steel complex. 

Regarding the coal supply, Cuong said that Vietnam does not have enough fat coal to make coke coal for metallurgy. The Thai Nguyen Steel Complex, for example, has to import coke coal from China and always complains about the quality of coke coal imports. 

The steel mills to be run afterwards will have to use import coal, while China is trying to limit exporting coal for metallurgy due to the pollution in coal production.

If the steel complex projects become realistic, in 5-7 years, Vietnam’s steel industry will churn out over 40 million tons. Meanwhile, MOIT has estimated that the steel demand of Vietnam will be only 22 million tons by 2020 

“It would be reasonable to have two steel mills, with the capacity of 5-10 million tons a year, in the next five years,” Cuong said. 

According to Vietnam’s steel industry development strategy in 2007-2015, with the vision until 2025, the demand for finished steel of Vietnam is expected to reach 10-11 million tons by 2010, 15 million by 2015, 20 million tons by 2020 and 24 million tons by 2025. 

The big steel projects that have been kicked off in Vietnam recently include the Formosa – Sunco steel complex in Vung Ang, Ha Tinh province in the central region, which has the investment capital of $7.8 billion for the first stage, the capacity of 7.5 million tons/year, expected to be operational in 2011; and the Tycoon – E.United in Quang Ngai province, capitalized at $3 billion, and with the capacity of 3 million tons a year.