Southeast Asia’s largest iron ore mine set for $3 bln revival after 15 years in limbo

After remaining dormant for 15 years, Vietnam’s Thach Khe iron ore mine is set for a major restructuring that could pave the way for a new VND80,000 ($3.04 billion) mining and steel complex aimed at producing high-quality steel products instead of exporting raw ore.

Authorities are seeking to close the chapter on the long-delayed project in May 2026, ending a prolonged period of legal and financial uncertainty while opening the door to a new investment cycle tied to downstream steel production.

The Vietnamese government recently instructed ministries and local authorities to resolve all outstanding issues related to the Thach Khe mine in the central province of Ha Tinh within May, in a move designed to end years of stagnation and create conditions for a more effective investment model.

The mine, which holds estimated reserves of 544 million metric tons, was first licensed in 2008 with registered investment capital of more than VND14.5 trillion dong ($550 million). The project, developed by Thach Khe Iron Joint Stock Company (TIC), was once expected to turn Ha Tinh into a major metallurgical hub.

However, mining operations were suspended in 2011 due to difficulties associated with open-pit extraction below sea level, concerns over saltwater intrusion into groundwater, and the limited financial capacity of the developer.

The suspension left significant economic consequences. Thousands of billions of dong contributed (VND1,000 billion = $37.94 million) by shareholders, including state-owned mining group Vinacomin, remained tied up for more than a decade.

More than 3,000 households in the project area have also faced years of uncertainty under suspended planning conditions, with deteriorating housing, underdeveloped infrastructure, and disruptions to farming and livelihoods.

An investment finance expert said shutting down the old model was necessary to “unlock frozen assets, end resource waste, and reduce the economy’s opportunity costs.”

Local officials in Ha Tinh said resolving the project would also help stabilize regional planning and ease uncertainty among residents.

“People want a clear decision so they can resume production activities and repair their homes. We also need room to develop infrastructure,” a representative from one commune in the project area said.

Vietnam’s Ministry of Finance has been tasked with completing a consolidated report and gathering opinions from cabinet members before May 12 for submission to higher authorities.

The formal termination of the previous project is viewed as a prerequisite for attracting new investment and redefining the responsibilities of related parties.

Shift toward deep processing

The biggest difference in the mine’s planned revival is a new strategy requiring iron ore extraction to be integrated with metallurgical and deep-processing operations to produce alloy steel and high-strength steel for manufacturing, infrastructure, and exports.

The approach is aimed at increasing the value of the resource instead of selling raw ore, as originally envisioned.

Requirements for new investors have also been significantly tightened. Companies must demonstrate strong financial capacity, with priority given to firms relying more heavily on equity financing rather than debt.

On the technology side, investors are expected to master the entire value chain from mining and ore beneficiation to circular metallurgy while controlling emissions in line with international standards.

Environmental requirements, including pit water treatment, landslide prevention, groundwater protection, and preservation of coastal ecosystems in north-central Vietnam, have become mandatory conditions.

A metallurgy expert said Thach Khe’s large reserves and iron content of around 58-60% could support the production of high-quality steel products if appropriate technology is applied.

“The core issues are technology and governance. Open-pit mining in a coastal area is extremely complex and requires comprehensive solutions covering geotechnics, hydrology and environmental management,” the expert said.

Businesses in the Vung Ang Economic Zone expect a new steel complex to stimulate supporting industries, logistics, and mechanical engineering services.

“Once phase one becomes operational, demand for transportation, engineering and industrial maintenance services will rise sharply. This is an opportunity for local businesses to join the supply chain,” the director of a mechanical engineering company in Ky Anh said.

Still, lessons from the previous project have made both authorities and residents cautious.

Ha Tinh provincial leaders have proposed a special oversight mechanism involving independent environmental organizations and local communities.

“We must select the right investor with real capabilities and ensure a transparent roadmap to avoid repeating past problems,” a provincial official said.

Vingroup-backed steel push

The restructuring comes as Vietnam’s steel sector has begun attracting new investment.

In late 2025, conglomerate Vingroup established VinMetal Production and Trading JSC with charter capital of VND15 trillion ($569.15 million).

VinMetal later established VinMetal Ha Tinh Industrial JSC, in which it holds a 95% stake, with charter capital of VND5 trillion. The company’s main businesses include iron ore mining, pig iron and steel production, and mechanical processing.

The legal representative and CEO of VinMetal Ha Tinh is Pham Nhat Quan Anh (a son of billionaire Pham Nhat Vuong), while Nguyen Viet Quang, vice chairman and CEO of Vingroup, serves as chairman.

On February 27, 2026, the Ha Tinh Economic Zone Authority granted an investment certificate for the VinMetal Ha Tinh Steel Plant project.

The project covers more than 460 hectares with total investment of nearly VND80 trillion ($3.04 billion). Phase one is expected to have annual capacity of 5-6 million tons, while the full project is designed to reach 20 million tons annually after three phases.

VinMetal plans to produce construction steel, hot-rolled steel, high-strength steel, and specialty alloy steel used in electric vehicle manufacturing and transportation infrastructure.

Analysts said securing a domestic supply of high-quality steel could support Vietnam’s industrial sectors and large infrastructure and energy projects.

On the technology side, VinMetal has signed an MoU with Primetals Technologies to integrate technology solutions across the steel production chain, from ironmaking and steelmaking to rolling operations.

Under the agreement, Primetals will help optimize technologies throughout the complex and coordinate engineering work among EPC contractors to ensure operational efficiency and synchronization.

An economist at Vietnam’s Institute for Economic Management Research said that if the steel complex operates as planned with a focus on deep processing, Vietnam could secure additional supplies of high-quality steel, reduce imports, and increase the share of manufacturing and processing industries in GDP.

“The spillover effects on employment, state budget revenues, and the restructuring of the local economy could be substantial, but this also comes with requirements for careful risk management related to project progress, financing, and the environment,” the economist said.

Residents in the project area expressed support for the new development if it is implemented transparently and with modern technology.

“We only hope the project is carried out seriously, with good technology that does not affect water resources or people’s lives. Stable jobs for local residents would be even better,” said a resident of Thach Khe commune who declined to be named.

May 2026 is expected to be a key milestone in determining the final resolution for the Thach Khe iron ore mine. A successful restructuring could not only resolve one of Vietnam’s longest-running stalled industrial projects but also create a new growth pole for Ha Tinh and strengthen the country’s steel and heavy industry value chain.