Vietnam launches second Chinese-run bauxite project

Mar 1, 2010, 4:56 GMT

Hanoi - Vietnam has broken ground on a second Chinese-run bauxite mine and aluminum-refining project in the central highlands, state media reported Monday.

Minister Nguyen Tan Dung attended a ceremony Sunday for the Nhan Co refinery in the province of Dak Nong, the state-run Vietnam News reported. The project will be built and run by Chinese state-owned aluminum company Chalieco.

The first Chinese-run bauxite and aluminum project began operations in 2008 in the neighboring province of Lam Dong.

The projects are controversial due to environmental impact and national security implications. Revered General Vo Nguyen Giap has written several open letters protesting on national-security grounds, while scientists' groups object to environmental degradation.

Dung said the project was needed for economic development in the central highlands and would 'open up the future for the aluminum industry in Vietnam.'

He said the government planned to build railway lines linking the plants to coastal seaports.

The Vietnamese state-owned mining conglomerate Vinacomin will invest 655 million dollars in the project, the newspaper Tuoi Tre reported. It is expected to begin operations in 2012.

A maximum of 700 Chinese workers will be allowed on the project, the paper reported. The project will create direct jobs for about 1,600 people and support the livelihoods of some 12,000 others.

One of the most controversial issues with the bauxite projects has been the employment of hundreds of Chinese workers, some low-skilled and lacking proper work visas. News reports that large numbers of Chinese are working illegally in Vietnam sparked a crackdown on visa policies last year.

Other critics say geological factors make it difficult to contain waste from bauxite mines.

Vietnam's bauxite reserves are among the world's largest, with an estimated 8 billion tons, concentrated in the highlands.