Japan casting a longing eye at Vietnam’s minerals

More mineral resource hungry foreign firms are sizing-up Vietnam’s rich hunting ground

Mitshuhide Tanikawa, chairman of I.F Sangyo Company, said the company wanted to invest in silica, titanium and rare-earth mines in Vietnam.

“Many Japanese companies used to exploit mineral resources in China, but now the export of mineral resources from China to other countries including Japan is limited by the Chinese government, so we have to find other markets. We see Vietnam has large potential to invest in,” said Tanikawa.

I.F Sangyo, specialised in mineral resource processing machineries, has already joined hands with Mai Thanh Export and Trading Company Limited, a Vietnamese private firm, to invest in a large silica mine in northern Quang Ninh province’s Van Don district.

The project, with an annual processing capacity of one million tonne, will start production in July, 2011 with I.F Sangyo pumping in $10 million.

The company already imported machinery and equipment for the silica processing plant.

“We are trying to put this project into operational as soon as possible,” said Tanikawa.

Tanikawa said Vietnam’s mining sector was on the radar screens of Japanese companies. He said many of Japan’s largest chemical and mineral resource manufacturing companies including Shin-Etsu Chemical, Showa Denko, Osaka Titanium Technologies, Toho Titanium and Ishihara Sangyo would give I.F Sangyo technical support to purchase all processed products from I.F Sangyo’s projects in Vietnam.

“Actually, they need to buy mineral resources from Vietnam when not being able to import more resources from China,” said Tanikawa.

I.F Sangyo’s investment will ensure processed silica has sufficient quality to be exported to Japanese companies.

Besides investing in a silica mine in Quang Ninh province, I.F Sangyo is seeking opportunities to be involved in titanium mines in Binh Thuan province.

But, Tanikawa said I.F Sangyo would invest in titanium mines through mergers and acquisitions.

“We will not invest in a new mine. We want to buy Vietnamese companies which do not have technologies to process hi-quality titanium for export into Japan. This will help us save time,” he said.

I.F Sangyo in March also explored rare-earth mines in northern Lao Cai province. Tanikawa expects to receive a licence to invest in a rare-earth mine in the province this year.

Currently, many Japanese companies want to exploit rare-earth in Vietnam.

Itochu Group, Toyota Tsusho and Sojitz Corporation are exploring rare-earth mines in Lai Chau province, while Sumitomo Corporation is exploring rare-earth potential in Yen Bai province.