Atlantic retreats from $1b plan
Atlantic retreats from $1b plan
An overly complicated and lengthy approval process has forced Australian mining company Atlantic Ltd to exit an aluminium supply chain project in the Central Highlands, after two years conducting studies and waiting for the government go-ahead.
In Atlantic’s quarterly report released two weeks ago, the company announced it had “completed the process of closing its Vietnam operations.”
The Australian mining company explained that since 2012, it had worked in close collaboration with Vietnam’s National Institute of Mining-Mettalurgy Science and Technology on a development study for an integrated mine-rail-port bauxite mining project in Vietnam’s Central Highlands.
Late last year Atlantic announced it had completed the study, which was submitted to the government in January last year with the hope that the company’s investment proposal would ultimately be approved.
But Atlantic has not yet received any approval that would have allowed its project to move beyond the initial planning phase.
“Given the lack of progress to date and the current financial position of the company, the board decided to cease further expenditure on its Vietnam projects,” the company stated in a report.
Terry Bourke, general counsel at Atlantic, did not respond to email from VIR last week asking for further comment.
In 2012 Atlantic signed a memorandum of understanding (MOU) with the state-owned Vietnam Natural Resources and Environment Corporation (T-MV) for the development of a major rail, mine, processing and port project in the Central Highlands.
Atlantic believed this was a strong business opportunity given Vietnam’s competitive advantages in the aluminium supply chain, including the highly-sought gibbsite ore typically found in the Central Highlands region, and the proximity of the project to major world demand centres, where there is an over capacity of refining and smelting capacity, but an undersupply of high-quality bauxite.
T-MV and Atlantic intended to complete a feasibility study encompassing all three elements of the project – mining, rail transportation, and port development – with a view to adding downstream alumina and aluminium processing in due course. The railway component related to the development of a new line from the Central Highlands provinces of Lam Dong and Dak Nong to port facilities on the southern coast of Vietnam.
Additionally, if the Vietnamese government approved Atlantic’s proposal, the company was ready to invest in two aluminium projects in Nhan Co and Tan Rai in the Central Highlands as well as build two processing plants in the region. The total investment capital was estimated to reach $1 billion.
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