State-owned VNSteel to divest $40 mln stake in loss-making iron ore, steel joint venture

Vietnam Steel Corporation (VNSteel) plans to sell its entire 46.85% stake in Vietnam China Metallurgy and Mineral Co. Ltd (VTM) for estimated VND1.05 trillion ($39.83 million), as the state-owned steelmaker seeks to exit a long-troubled iron ore and steel project in northern Vietnam.

VNSteel said its board had approved the divestment of its full holding in VTM, according to a company resolution.

Established in 2007 as a Vietnamese-Chinese joint venture, VTM was created to develop the Quy Xa iron ore mine and the Lao Cai iron and steel complex, a project intended to build an integrated mining and steelmaking value chain to reduce Vietnam’s reliance on imported raw materials.

The venture, however, became one of the long-running loss-making industrial projects after years of operational and financial difficulties.

The company’s ownership structure has recently changed after Chinese partner Kunming Iron & Steel Holding Co. (KISC) sold its 45% stake in VTM to Thu Do Mining JSC, a Vietnamese company established in late 2025 with a charter capital of VND1.2 trillion ($45.61 million).

Notably, founding shareholders of Thu Do Mining include KVS Investment JSC (10%), Hoa Phat Iron and Steel JSC - a member company of Hoa Phat Group (40%), and Hoa Phat chairman Tran Dinh Long (10%).

Following the latest capital hike, VTM now has a charter capital of VND1.98 trillion ($75.33 million), with VNSteel holding 46.85%, Lao Cai Mineral Co. (LAMICO) owning 8.15%, and Thu Do Mining holding the remaining 45%.

According to the project’s environmental impact assessment, the Quy Xa mining project covers approximately 424 hectares, including nearly 82 hectares designated for mining operations.

The Quy Xa mine, located in the northern province of Lao Cai, has designed reserves of more than 73.2 million tons of iron ore and is planned to produce up to five million tons annually over an estimated mine life of nearly 16 years.

Vietnam’s Ministry of Industry and Trade has previously described Quy Xa as one of Southeast Asia's largest and highest-quality iron ore deposits and among the biggest iron ore mines in Vietnam.