Export ban make raw mineral exporters weep
10-10-2012 12:37:44+07:00
Export ban make raw mineral exporters weep
Vietnamese titanium exploiters have shouted for help, asking the Prime Minister to allow to continue exporting titanium ore to clear the big stocks, or they would go bankrupt.
The Prime Minister in January 2012 released an instruction on prohibiting to export inventory titanium ore until the end of June 2012.
The Prime Minister has also requested not to export the titanium ore which has not undergone deep processing from July 1, 2012, while the export will be carried out only after getting the nod from the Prime Minister.
The document also said that local authorities have to stop granting licenses on exploiting the ore.
Mineral enterprises have complained that the decisions made suddenly without any warning in advance have pushed them against the wall, and that they need some more time to get adapted to the new circumstances.
Mineral exploiters now sit idle
Ngo Quoc Hoi, Director of the An Khanh Mineral Joint Stock Company, complained that titanium ore still has been churned out, but left unsold.
“We have stopped exporting ore since June 2012. Therefore, the company now just tries to keep production at a moderate level to retain workers,” Hoi said.
The high ore inventories have been blamed on the oversupply. In principle, Vietnam allows to export processed products in order to encourage domestic production. However, there are very few factories invested heavily enough to carry out deep processing phrases.
According to Hoi, there is only one factory in Thai Nguyen province which is capable to make deep processing. The factory has the capacity of 20,000 tons of slag per annum which consumes 40,000 tons of material titanium ore. This means that the amount of ore to be put into deep processing just accounts for 1/9 of the total ore output provided by the existing exploitation factories.
Other processing factories are still under the construction, which are believed to be completed by the end of 2013 at the soonest.
Duong Tat Thang, General Director of a mineral export company said that the government should have set up a plan which allows to step by step in reducing the ore exports before a complete ban.
He said the Prime Minister’s instruction was released in January, while enterprises were told to stop exporting since June. As a result, enterprises hurried to export ore in the months between January and June, even though the world’s prices were low at that moment.
In fact, enterprises did not have full six months to export their products. The procedures for exporting ore could not be fulfilled prior to February, which meant that enterprises only had four months to sell hundreds of thousands of tons of titanium ore in their stocks.
When exporters found shipping service providers, the ore price then unexpectedly dropped by 70-80 dollars per ton.
“When we delivered the second freighter, the price decreases caused us the loss of 15 billion dong. As such, with 300,000-400,000 tons of ore exported, we have lost hundreds of billions of dong because of the price decreases,” Thang said.
He went on to say that right after the titanium ore export ban was released, the Japanese partner immediately stopped the principle contract signed before with Thang’s company, thus making the company suffer.
Watchdog agency: businesses have to suffer from their faults
Nguyen Manh Quan, Director of the Heavy Industry Department of the Ministry of Industry and Trade said enterprises have been told many times that they need to make heavier investment to survive, and that the government would gradually tighten the export of raw materials.
“In 2008, the government instructed to stop exporting titanium to give more time for enterprises to prepare for the investments in ore processing. In 2010, the government allowed to export 100,000 tons of ore, emphasizing that this would be the last export consignments. However, enterprises still have done nothing so far, and they need to suffer from this,” Quan said.
vietnamnet
