Equitisation forces Mideco to drop joint ventures

July 06, 2004 | 18:03

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Domestic mining company Mideco has pulled out of its only two joint ventures in an effort to complete equitisation by the end of this year.

Mideco is to transfer its 20 per cent stake in the $18 million nickel venture at Ban Phuc in the northern province of Son La to its New Zealand partner, AMR Nikel Ltd, for $2.5 million (VND39 billion).
AMR Nikel has a 70 per cent share in the venture and local company Son La Mechanic Company has
10 per cent.
The company will also transfer its 10 per cent stake in the $15 million gold venture at Bong Mieu in central Quang Nam province, to its partners, Canada’s New Vietnam Mining, which has an 80 per cent stake the venture, and domestic company Minco, which has a 10 per cent share.
The size of the second capital transfer will be decided this month, Mideco deputy director Nguyen Xuan Bao said.
“It is a pity we have to say goodbye to these projects when production has only just started and when we were expecting such good profits,” Bao said.
“But we must pull out because we have to clear our financial books ahead of equitisation.”
Ban Phuc was licensed in 1993 and initial investigations to determine the size of the nickel deposits have “proved productive”.
“We are writing a feasibility study for mining the ore at the moment,” Bao said.
The Bong Mieu venture was licensed to mine gold in 1991. A company official, who did not wish to be named, said the venture had spent more than $10 million extracting and examining ore taken from the site, to assess the project’s profitability.

By Hoang Mai

vir.com.vn

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