Formosa Ha Tinh Steel

History

Formosa Ha Tinh Steel Corporation was formed 2008 to establish a large iron and steelmaking plant at a deepwater port in Vietnam. The primary investor and developer was Formosa Plastics Group of Taiwan.

In 2010 3,300 hectares (33 km²) of land in Kỳ Anh District was allocated to the development company (Hung Nghiep Formosa Ha Tinh Steel Co) by Ha Tinh Province. Initially statements by the company estimated a $15 billion development cost to install 7.5 million tons pa steel capacity. In 2012 the developer Hung Nghiep Formosa Ha Tinh Steel Co estimated an increased project of $22 billion. Governmental incentives for the plant included low taxation in imported capital goods, low land taxes, and the development of infrastructure supporting the project. Employment due to the project was expected to be c. 10,000 person; with a second phase increasing production to 22 MT pa, and creating c. 30,000 jobs.

A groundbreaking ceremony for the plant took place in 2 December 2012 in the presence of Prime Minister Nguyen Tan Dung. Associated developments included the Thạch Khê iron mine (reserves 544 MT), 60km north; GW scale thermal electric powerstations; and the Vuang Ang-Son Duong deep sea port, capable of berthing ship of up to 300 to 500 thousand tons.

In 2014 Formosa Plastics reached an agreement to invest $1.15 billion to acquire approximately one third of Fortescue Metals Group's Iron Ore Bridge project in western Australia, together with a $123 million investment into a related port project.

During anti-Chinese riots in May 2014 (see 2014 Vietnam anti-China protests.) the plant was attacked by rioters, with fires started; four Chinese workers were killed, with 3,000 forced to leave due to the riots. As a result of the riots construction work was halted for ten weeks, resuming in July 2014. In March 2015 a scaffolding collapse at the construction site caused the deaths of 16 workers.

In early 2015 China Steel (Taiwan) increased its holding in the plant from 5% to 25%, investing c. $940 million into the development of the plant. In mid 2015 JFE Steel (Japan) acquired a 5% stake ($215.2 million) in the plant.

In late 2015 the plant outputted the first hot rolled coil manufactured in Vietnam. "Phase 1" Blast furnace iron production was scheduled to begin in 2016, with two blast furnaces at the plant having a total production capacity of 7.5 MT pa; approximately 6 MT were for flat steel production, and 1.5 MT for rebar and other rolled steels. Two further expansion phases, were planned to increase production to 15 MT and then 22.5 MT pa.

2016 mass fish deaths

In 2016 a mass fish poisoning in the sea near off the Vietnam coast was initially blamed on the steel plant - analysis of the sea water showed high phosphate and pH levels; subsequently Vietnamese authorities stated no link had been shown between the plant and fish deaths. The plant was later ordered to dig up and modify a waste pipe to allow easier monitoring by Vietnamese authorities.

In May 2016 the company was found to have systematically evaded taxes and claimed excess tax refunds through stating the wrong tax codes for imported equipment - VND1.55 trillion (US$69.2 million) in tax refunds and VND5.5 billion ($245.54 million) in taxes were required to be paid to the government.

In late June 2016 a government report found Ha Tinh steel responsible for the 2016 fish poisoning incident. Formosa Ha Tinh Steel agreed to pay $500 million (11.5 trillion VND) compensation for the discharge, which contained phenol, cyanides and iron hydroxides. The company blamed the discharge on errors by subcontractors during a trial operation phase. A governmental report found the origin of the pollution to be from water from wet coke quenching, which was released into the sea after a power supply failure at the plant's waste treatment facilities.