The Vietnam Steel Association (VSA) has proposed that the export of iron ore be  halted in order to ensure the adequacy of raw materials available for domestic  production.

The association said that several furnaces had been forced to stop due to a shortage  of ore.

There are 14 furnaces in the country, with a total production capacity of 3.8Mt/y. However, output last year reached only 500kt.

Next year the demand for iron ore from the Vietnam Steel Corporation alone is  estimated at 2.Mt, about 820kt of which will need to be imported.

In response to the VSA's proposal, the Ministry of Industry and Trade said that the  export of iron ore was aimed at clearing high inventories and tackling difficulties  facing enterprises, according the Vietnam Economic Times newspaper.

Due to the country's current economic difficulties, the Government deemed the  policy of allowing the export of iron ore to be appropriate.

The ministry said that many proposed new furnace builds in the country have fallen  behind schedule, resulting in an imbalance between mining output and  consumption in the domestic market.

They added that if domestic steel producers committed to collecting all inventories  of iron ore in the country, ore exports would be stopped.

Currently, iron ore from mines in over ten provinces are already reserved for  domestic production.

To limit the export of iron ore, the export tax has been increased to 40%.

Source: Daily ‘Vietnam News’, Hanoi; 24 May 2013