Canadian Manufacturing

Vietnam orders halt to construction of US$10.6B steel plant

The government has questioned the potential environmental impact of the project and its economic feasibility, considering the state of global steel prices

April 17, 2017  by The Associated Press

HANOI, Vietnam—Prime Minister Nguyen Xuan Phuc has ordered a halt to work on a major steel plant, citing environmental and other concerns.

The Vietnam-based Hoa Sen Group last year announced plans to build a $10.6 billion complex with an annual capacity of 16 million tons of steel. But a government statement called for further studies on the potential environmental impact of the project, and its economic feasibility.

It cited risks of a disaster like the chemical spill last year during a test run at another steel complex, built by Taiwan’s Formosa Plastic Group, that devastated fisheries, tourism and the economies of four central provinces.

Economic concerns are another factor, given the glut in world steel supplies.


Staff who answered the phone at Hoa Sen Group’s offices on April 17 said the person authorized to speak about the project was travelling and not available for comment.

Formosa Plastic paid $500 million in compensation for the accident at its steel complex, which is considered Vietnam’s worst environmental disaster.

The Formosa Plastics steel project in Ha Tinh province includes a steel plant, a power plant and a deep sea port, and is one of the largest foreign investments in Vietnam.

While such industrial projects create much-needed jobs, they also can extract a steep price.

An estimated 115 tons of fish washed ashore along more than 200 kilometres of the central coast in April, the government said in a report to the National Assembly last July. The disaster harmed the livelihoods of more than 200,000 people, including 41,000 fishermen, and triggered rare protests in the communist country.