Westralian Sands to resume mining in Vietnam
A MAJOR mining joint venture that foundered six months ago amid a dispute between Vietnamese government officials and their Australian partners is to be resurrected after concessions from the Australian side.
Westralian Sands has informed the Australian stock exchange that the production and export of ilmenite sand will resume from its Austinh joint venture in central Vietnam.
Westralian Sands managing director Malcolm Macpherson confirmed that agreement was reached with officials from Ha Tinh province to defer previously announced mine expansions.
'I believe there is a growing recognition by Vietnamese authorities that projects like the Austinh development must succeed if Vietnam is to attract new foreign investment,' Mr Macpherson said.
The agreement would allow Austinh to keep faith with the firm's customers and other stakeholders, he added.
It is understood that considerable bitterness and uncertainty remains, however.
Sources on both sides said Westralian Sands had little option but to seek a speedy agreement and 'mine their way out of trouble'.
While agreeing to keep ilmenite output to 60 per cent of the planned capacity, an export limit of 50,000 tonnes a year has been set until the Australian side has completed a feasibility study on the production of titanium dioxide pigment in Vietnam.
Westralian will replace several of its executives, including chairman of the joint venture management board, Clive Pearson.
About 41 containers of equipment for the planned expansion are impounded at a Haiphong port, costing Westralian A$1,000 (about HK$5,720) a day.
Mr Macpherson said the equipment would be sent to Australia.
'Pull-out would have been the obvious solution but it would be unthinkable in this situation, given major doubts about the legal system. The foreign partner just has to keep going and hope for the best,' a source said.
The saga is being closely watched by foreign investors and diplomats in Hanoi who see it as among the most vicious break-downs in Vietnam's surging foreign investment scene.
Officials at the Australian embassy in Hanoi said they refused to take a position on the dispute, but were 'encouraged' by recent developments, having lobbied both sides to get together.
The embassy is disappointed, however, at further delays to a mining law they hope will protect rights of foreign prospectors operating in Vietnam.
Australian Senator Bob McMullan was told on a recent visit to Hanoi that the law would be passed at the last hearing of the National Assembly, which ended two weeks ago. The law is undergoing its 15th draft.