On April 2, Japanese steelmaker and technology provider Kobe Steel Ltd has announced that it received an investment license on March 31 from Vietnam to construct iron-making plants.
In two phases, Kobe Steel plans to build four iron nugget plants, each with 600,000 metric ton capacity, with a total capacity of 2.4 million metric tons per year in Vietnam's Nghe An Province. The total project cost is estimated to reach JPY 100 billion ($1.06 billion). In April this year Kobe Steel is considering the formation of a business in Vietnam, called Kobelco Iron Nugget Vietnam Limited Liability Company to produce and market iron nuggets using the next-generation "ITmk3" iron-making process that it has developed.
Plans call for the early establishment of a locally incorporated company through which the project can be carried out. A detailed feasibility study will be conducted, aiming for first-phase construction, with an investment of JPY 50 billion to begin in January 2011.
Vietnam forecasts that domestic steel demand will continue to grow in the future. Currently, Vietnam is largely dependent on importing scrap and semi-finished steel products to meet its iron unit requirements. As the ITmk3 Process can produce high-grade iron units from Vietnam's iron ore and coal, Vietnam has high expectations for the new project. Vietnam's iron ore from the Thach Khe mine contains a relatively high amount of iron. However, it also contains much zinc, which makes it difficult to use in blast furnaces. The process in question will enable Vietnam to make effective use of its mineral resources, and the use of relatively inexpensive raw materials will help improve the profitability of the project, the company stated.