MAC: Mines and Communities

Vietnam's aluminium war heats up

Published by MAC on 2009-05-27

The best-laid plans of mines and men often get stymied when it comes to their practical implementation. If those plans are highly defective at the outset, one hopes that good sense and governance will prevail before catastrophe occurs.

Earlier this year, the legendary Vietnamese liberation fighter, General Giap, beseeched his government not to allow bauxite mining in the country's central highlands region - predicting unacceptable social and environmental consequences if it did. At the time, his was a lone voice. See:

Over the past few months, however, and despite the customary rigidity of the Vietnamese regime towards its critics, more dissenting voices have been heard. See:

Such pressure, modest though it may be, has apparently contributed towards a more circumspect attitude by the authorities towards the Nhan Co mining and refining plan, and specifically some recognition of its likely environmental impacts.

The communist party chief in the bauxite-rich province of Dak Nong says that priority will be given to assisting those relocated (most of them Indigenous) to find "new jobs", and to offer them shares in the mining company.

However, little if anything is being promised to local communities by way of "consultation" on where they will be shifted, sustainable livelihoods to be offered, or on guaranteed terms of compensation.

Aluminium production is currently being cut back in several major producing countries, so the economics of the project appear highly tenuous - a fact recognised last week by the state coal and minerals group. But, instead of shelving the proposal, the government now seems to be considering a tripling of output from the alumina refinery, with a consequent threefold increase in the mining of bauxite ore.

Vietnam's environment ministry recognises that the biggest single challenge of refining is coping with its sodium hydroxide and heavy metal-laden residues (usually called "red mud"). These can range from around third to more than twice the amount of bauxite fed into the plant, depending on the grade of ore.

Under current proposals this massive cocktail will be siphoned into earthen reservoirs located in valleys - the least secure method of disposal. Although it's also proposed to employ dried-out red mud for construction and other purposes (a practice increasingly adopted elsewhere), there is no guarantee that it will - or even could - be used in this fashion. Nor does the "method" address the problems of community dislocation, water contamination and land degradation that are caused by dumping these wastes in a tropical densely forested area in the first place.

Vietnam's mining and geology chief has mooted the extraction of minerals and metals contained in the red mud to attract more foreign investment to the project.

But the fact is that, despite "numerous attempts" at recovering these materials, "a cost effective large scale bulk application[to do so] has yet to be found." [see: John A S Green (Ed): "Aluminium Recycling and Processing for Energy Conservation and Sustainability", ASM International, 2007, pps 164-175].

The Nhan Co project looks increasingly untenable and, to say the least, unwise.

[Comment by Nostromo Research, 23 May 2009].

Reviews may delay construction of central highlands alumina plant

VietNamNet Bridge

22nd May 2009

Because legal formalities have not been completed, it may be difficult to start construction of the Nhan Co alumina plant in October 2009 as foreseen in the contract with the Chinese builder Chalieco.

Alumina is an intermediate product in the manufacture of aluminum from bauxite ore. The Nhan Co alumina project was launched in 2005, with a projected initial capacity of 100,000 tonnes of alumina per year.

However, the Vietnam Coal and Minerals Group (TKV) recalculated and concluded that at this scale, economic effectiveness would be low. The mining group recommended that the government allow it to raise the plant's capacity to 300,000 tonnes and then 600,000 tonnes per year. Ultimately, TKV envisions annual output of 1.2 million tonnes.

The Nhan Co project in the central highlands province of Dak Lak includes a bauxite ore refining plant and an alumina refining plant. The plants are expected to cost nearly 12 trillion dong, US$ 705.8 million at current exchange rates. The project is scheduled to be completed in late 2011.

Around 275 billion dong or $16.1 million has already been pumped into this project to pay for land compensation, site clearance, building roads, and purchasing equipment.

The Nhan Co-TKV Alumina Corporation signed a contract with Chalieco (a subsidiary of the China Aluminum Corporation) to build a 650,000 tonne/year alumina refining plant. Construction was scheduled to begin in October 2009. Nhan Co-TKV has submitted an environmental impact report to the Dak Lak province government for its consideration and approval.

TKV confirmed that it has mobilized 20 percent of the capital for this work, issued bonds to mobilise 1.5 trillion dong or $88.2 million, and worked with banks to borrow capital.

TKV also reports that it has sent 320 workers from Dak Lak for technical training. It is recruiting 450 others for a second phase of training, including 100 ethnic minority people.

Does bauxite in Dak Nong contain valuable metals?

Regarding the ‘red mud' that will be waste from Nhan Co project, two branches of the Ministry of Environment and Natural Resources (MONRE), that is, the General Department of Environment and the Agency for Environmental Impact Assessment, agreed with Dak Nong authorities that investors must carefully research the geological structure of the area to prevent incidents such as a break in the red mud reservoir. Landslides and flash floods are common in Dak Nong.

Dak Nong province has so far only authorized bauxite mining on half of the 500 square kilometres of bauxite ore deposits. However, with estimated reserves of 270 million tonnes of ore, the Nhan Co project can operate for 235 years. Red mud is problematic but it could be the "material" for extracting other metals.

MONRE's Mineral and Geology Agency chief Nguyen Van Thuan said that bauxite ore in Dak Nong contains some rare and valuable metals such as potassium and vanadium. These metals will be discharged along with the red mud, so the investor should consider collecting these metals.

People's interests a top priority

Dak Nong Party chief Tran Quoc Huy has said that the Nhan Co project needs to be related to many economic targets. The investor has to have policies to assist local people to change jobs and to learn new skills. Most importantly, Nhan Co-TKV must keep their promises. "If the project is not implemented seriously, based on Politburo guidance, it must be stopped," stressed Huy.

Dak Nong Peoples Committee vice chairman Tran Phuong has said sensitive matters like environmental supervision and land reclamation after the bauxite ore is mined must be stipulated in legal documents to ensure respect for environmental and social interests.

Community inputs are needed to build plans for on environmental protection and policies for local residents, Phuong added.

The Nhan Co Alumina JS Company will sell a certain percentage of its shares to Dak Nong people.

Legal formalities remain incomplete

During his field trip to Nhan Co in early May, MONRE chief Pham Khoi Nguyen said that legal formalities for the construction of Nhan Co alumina plant are being completed exceedingly slowly. TKV had not been granted a mining licence for Nhan Co and its environmental report has not yet been approved.

TKV Deputy General Director Duong Van Hoa, who is responsible for the Nhan Co project, said the exploitable bauxite deposit for the alumina plant is 1.3 million tonnes, which comes from the first-phase of the Nhan Co plant and industrial zone.

It is estimated that Nhan Co Alumina JS Company will recover over 10 million tonnes of bauxite ore from the levelling of the Nhan Co industrial zone in the second phase.

This volume of ore is sufficient for the plant in its first year. Nhan Co will begin mining bauxite ore in 2012.

TKV plans to finish its detailed technical exploration of bauxite resources by the end of the third quarter 2009 and will then supplement its submission to the Ministry of Natural Resources and Environment requesting a bauxite ore mining licence in Nhan Co.

Minister Nguyen of MONRE has confirmed that "if the documents are complete, the ministry will issue a licence within three months afterward."

For the above reasons, the Nhan Co Alumina JS Company may not be in a position to kick of the construction of its alumina plant by year-end.

First of all, it must complete its report on environmental impacts for the Dak Nong authorities. MONRE will assist Dak Nong in its assessment of the report before Dak Nong approves it.

Bauxite miners clean up their act

Vietnam News Service

12th May 2009

LAM DONG - Red mud, a toxic waste from bauxite mining, will be treated to minimise its bad effects on the environment and agricultural production at project in the Central Highlands.

Chairman of the Viet Nam National Coal and Mineral Industries Group (Vinacomin), Doan Van Kien said this after a week of inspections by experts from the Ministry of Natural Resources and Environment. Viet Nam had a long-term strategy for bauxite mining, so an effective treatment for red mud would help decide whether to go ahead with similar projects, said the Minister for Natural Resources and the Environment, Pham Khoi Nguyen.

The treatment involves the building of earthen reservoirs to store the red waste after toxic elements are removed. The reservoirs will be located in valleys and will not affect underground water supplies. To prevent the mud from overflowing when there are heavy rainfalls, a drainage system will be built around them. When the water in the mud evaporates, the red earth remaining will be buried.

However, technology is being studied for using dried red mud as a building material after mixing it with cement to produce construction materials.

Four observation stations have already been built to ensure the reservoirs cannot overflow. Vinacomin in co-operation with Lam Dong provincial People's Committee
planned to relocate people living near the mining sites over the next
20-30 years, said Nguyen.

The ministry would form a supervision team on bauxite mining and aluminium production in the provinces of Lam Dong and Dak Lac, said Nguyen. The group has also agreed that after mining, land for bauxite exploitation will be levelled and mixed with organic fertiliser while the reserved topsoil and trees will then be returned.

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