Vietnam's deputy prime minister Hoang Trung Hai has frozen the licensing of steel production projects which have no guaranteed sources of iron ore or which do not produce special steels.
The move follows a warning from the Vietnam Steel Association of an imminent steel glut.
According to a document signed by Mr Trung Hai, only steel projects with guaranteed, adequate sources of iron ore as well as projects for the production of high quality steels will be given consideration for investment approval.
Minister Trung Hai has ordered local authorities to carefully review already licensed steel projects, and work out measures to deal with those projects that have yet to be carried out, based on progress achieved and success in finding sufficient raw materials to sustain long-term production.
The Vietnamese deputy prime minister has also asked the ministry of finance, the ministry of natural resources and the environment, and the ministry of industry and trade to impose natural resource, environmental, import and export tax duties on steel products, based on their estimates of the country's iron ore reserves, domestic production capacity and demands, and current taxation policies.