Tata Steel to sign $3.5 billion steel deal in Vietnam

Mumbai: Tata Steel Ltd will sign a memorandum of understanding with state-run Vietnam Steel Corporation on May 29 for setting up a steel complex, reports quoting VSC chairman Mai Van Tinh said.

The project, involving total investment of $3.5 billion, received government approval on May 18.

The steel complex will come up in the central province of Ha Tinh, 340 km south of Hanoi. The plant will utilise iron ore from Thach Khe mine to produce 4.5 million tonnes of steel products per year, the government said.

In March VSC teamed up India''s Essar group and the Vietnam General Rubber group to develop a $527 million hot-rolled steel mill in the southern province of Ba Ria-Vung Tau.

Vietnam has also planned several other steel projects involving steel majors like South Korea''s POSCO in a bid to reduce its reliance on steel imports

The Hanoi-based unlisted VSC has been running several ventures with foreign companies to expand domestic production.

Vietnam currently imports steel and billets mainly from China. Last year Vietnam''s imports of the products edged up 1.8 per cent from 2005 to 5.62 million tonnes, government statistics said.

During January-May this year, Vietnam''s imports of steel and billets jumped 39.5 per cent from a year earlier to 3 million tonnes, prompted by a robust demand of the construction sector, the General Statistics Office said.