Decision No. 1546/QD-TTg approving the master plan on zoning of areas for exploration, mining, processing and use of titanium ore through 2020, with a vision toward 2030

66 Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) Pursuant to the Government's Decree No. 92/2006/ND-CP of September 7, 2006, on the elaboration, approval and management of socio-economic development master plans; and Decree No. 04/2008/ND-CP ofJanuary 11, 2008, amending and supplementing a number of articles of Decree No. 92/2006/ND-CP of September 7, 2006; Pursuant to the Prime Minister's Decision No. 2427/QD-TTg of December 22, 2011, approving the Mineral Strategy through 2020, with a vision toward 2030; At the proposal of the Minister ofIndustry and Trade in Report No. 2702/TTr-BCT of March 29, 2012, and Official Letter No. 6083/ BCT-CNNg ofJuly 10, 2013, DECIDES: Article 1. To approve the master plan on zoning of areas for exploration, mining, processing and use of titanium ore through THE PRIME MINISTER 2020, with a vision toward 2030, with the following principal contents: Decision No. 1546/QD-TTg of September 3, 2013, approving the 1. Development viewpoints master plan on zoning of areas for - The country has a large natural resource exploration, mining, processing and of titanium ore, which serves as a prerequisite use of titanium ore through 2020, with and an important condition for building a a vision toward 2030 modem titanium ore mining and processing industry to support the national socio­ THE PRIME MINISTER economic development along the line of Pursuant to the December 25, 2001 Law on industrialization and modernization and Organization of the Government; international integration. Pursuant to November 17, 2010 Law No. - To build and develop a complete and 60/2010/QH12 on Minerals; sustainable industry of titanium ore mining © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 67 (Cong Bao nos 569-570/Septemher 16, 2013) and processing toward modernity, economical and porous titanium; to meet domestic demand use of natural resources, economic-social­ for pigment; to export titanium slag, porous environmental benefits and social order and titanium and zirconium oxychloride salt safety. Products ofthis industry must be deeply products. processed to meet domestic use and export - By 2030: To develop the stable and demands. sustainable titanium industiy with lai·ge hi-tech - To develop the titanium ore mining and titanium ore mining and processing centers in processing industry with a reasonable roadmap Binh Thuan; to concentr·ate on and plioritize and scale in order to meet to the utmost the development of pigment, porous titanium, requirements and objectives of the national titanium metal and alloys to meet domestic and economic development in each peliod; to apply export demands. advanced technologies to ensure maximum b/ Specific objectives recove1y of useful elements in titanium ore and save energy; to develop the titanium industry in - By 2015 haimony with the infrastr11cnire-se1vice system + To complete the exploration and assessment (transpo1tation, seapo1ts, electricity and water of reserves of titanium mines to be operated supply, logistic and technical se1vices, etc.); to in the planning period, assuring reliable step by step fo1m technological complexes for rese1ves for investment in titanium mining and mining, s01ting and deep processing of titanium processing projects. ore in association with suppo1t industlies to + To maintain production at a scale suitable se1ve the mining and processing industiy, first to the actual use demand concunently with of all in areas with large titanium ore deposits reorganizing production at the existing titanium in Binh Thuan and Ninh Thuan provinces. mines and titanium ore processing facilities; - To invest in developing the titanium ore to renew and upgrade technologies, improve mining and processing industiy on the basis the recoverability of low-grade ore and ore of mobilizing different resources at home tailings; to fully meet the domestic demand for and abroad. The investment cooperation with zirconium powder and reconstituted ilmenite; foreign countries aims mostly at acquiring to produce titanium slag and artificial rntile advanced technologies in the field of deep for use as matelials for production of pigment processing and penetrating into the world and expo1t. market. + To build and commission a number of 2. Development objectives plants processing titanium slag and a1tificial a/ General objectives rntile in the four planning areas; to research - By 2020: To fo1m the titanium indust1y technologies and prepare investment in projects with deeply processed products being pigment to produce porous titanium and titanium metal © Vietnam Law & Legal Fornm

68 Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) in Binh Thuan province, produce pigment 194,000 tons of superfine zirconium powder per in Binh Dinh and Binh Thuan provinces; to year; 240,000 tons of pigment per yeai·; 20,000 prepare investment in a large titanium ore tons of fe1rnus titanium per year; and 20,000 mining and processing complex in Binh Thuan tons of porous titanium per yeai·. province. - Dming 2021-2030 + To invest in, renovate and upgrade + To stably and sustainably develop the infrastrncture (roads, electricity and water titanium indust1y, strengthening its position supply, etc.) synchronously with development as a supplier of titanium products, pigment of titanium mining and processing projects. and porous titanium for the world market; to The forecast total processing output by complete the building of a complete titanium 2015: 60,000 tons of reconstin1ted ilmenite per ore mining and processing indust1y. year; 945,000 tons of titanium slag per year; + To fully meet the domestic demand 60,000 tons of artificial rntile per year; and for pigment, zirconium compounds, porous 152,000 tons of fine and superfine zirconium titanium and titanium metal and concmTently powder per year. expand expo1t markets. - Dming 2016-2020 The forecast total processing output by + To form the titanium ore mining and 2030: 60,000 tons of reconstituted ilmenite processing industry with main products of per year; 1,001,000 tons of titanium slag per titanium slag, pigment, porous titanium/ year; 120,000 tons of artificial rntile per year; titanium metal and a number of products from and 208,000 tons of superfine zirconium zirconium on the basis of maintaining the powder per year; 300,000 tons of pigment production and expanding existing processing per year; 30,000 tons of fenous titanium per facilities in combination with building deep­ year; and 20,000 tons of porous titanium per processing facilities to meet domestic and year. export demands. 3. Development planning + To build and develop in Binh Thuan a large a/ Titanium ore resource titanium ore mining and processing industry The estimated titanium ore deposit and center with advanced technologies and main resource is around 650 million tons of heavy products being pigment and porous titanium to minerals (including around 78 million tons of meet domestic and expo1t demands. zirconium); the estimated deposit and resource The forecast total processing output by in Binh Thuan area is around 599 million 2020: 60,000 tons of reconstin1ted ilmenite tons, accounting for around 92% of the total per year; 989,000 tons of titanium slag per titanium ore deposit and resource in Vietnam, year; 120,000 tons of aitificial rntile per year; of which: © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 69 (Cong Bao nos 569-570/Septemher 16, 2013) - The deposit and resource in areas where Reconstituted mineral activities are banned or rest:Iicted is 5 60 60 60 ilmenite around 210 million tons (including arOlmd 26 million tons of zirconium). 6 Pigment 0 240 300 - The titanium ore deposit and resource Porous titanimn/ 7 0 20 20 which may be mobilized for mining is around titanium metal 440 1nillion tons (including around 52 million 8 Fe1rnus titanium 0 20 30 tons of zirconium). In the planning period, it is expected - Forecast domestic demand to mine around 150 million tons of heavy Table 2 1ninerals (including around 17 million tons of zirconium), the remaining deposit and resource Forecast domestic Name of demand will be included in the national reserves. No. product (thousand tons) The detailed titanium deposit and resource 2015 2020 2030 volumes are provided in Appendix I to this Circular. 1 Ilmenite pure ore 1,882 2,081 2,103 b/ Forecast domestic and expo1t demands 2 Titanium slag 120 312 390 - Forecast processing output 3 Altificial rntile 20 30 60 Table 1 Reconstituted 4 20 30 60 ilmenite Forecast Name of processing output Fine and No. product (thousand tons) 5 superfine 20 30 40 2015 2020 2030 zirconium

1 Titanium slag 945 989 1,001

6 Pigment Ti02 90 150 200 Pig iron (recovered from the stage 2 535 561 569 Note: The demand for ilmenite pure ore ofproduction of titanium slag) is detennined according to the demand for Superfine materials for production of titanium slag, zirconium reconstituted ilmenite and aitificial rntile. Other 3 powder and 152 194 208 products (pig iron, zirconium, rntile, monazite, zirconium etc.) are byproducts obtained in the processes compounds of s01ting titanium ores and producing titanium

4 Altificial rntile 60 120 120 slag. © Vietnam Law & Legal Fornm

70 Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) - Forecast export volume + To complete the exploration in the areas as unanimously agreed in Thai Nguyen, Quang Table 3 Binh, Quang Tri, Binh Dinh, Ninh Thuan Forecast export volume and Binh Thuan provinces in order to obtain Name of No. a reliable deposit to meet the demand for product (thousand tons) 2015 2020 2030 materials for processing facilities.

1 Titanium slag 825 677 611 + To complete the exploration of titanium ore in the red sand layer in Luong Son in

2 Altificial rntile 40 90 60 northern Binh Thuan province to serve large­ Reconstin1ted 3 40 30 0 scale mining and processing. ilmenite Fine and superfine - During 2016 - 2020 4 132 164 168 zirconium Depending on the possible implementation

5 Pigment 0 90 100 of projects on mining combined with deep processing, to expand exploration in the Porous titanium/ 6 0 20 20 vicinity of Luong Son (in no1them Binh Thuan titanium metal province) and areas having titanium in the red

7 Fenous titanium 0 20 30 sand layer in Ninh Thuan province. c/ Planned zoning -After 2020 Four titanium ore areas are zoned off to To explore remaining areas with titanium in supply materials for processing facilities in the red sand layer. confonnity with technological characte1istics of Exploration schemes may be canied out when the ore, processing scale and output, specifically there are technically and economically feasible as follows: projects on mining and deep processing. - Region I: In Thai Nguyen area (original The forecast total deposit which is available ore and ore placer). or cunently or akeady explored for mining in - Region II: In Ha Tinh - Thua Thien Hue the planning period is around 150 million tons (ore placer in the grey sand layer). of heavy minerals (around 120 million tons of -Region III: Quang Nam -Binh Dinh -Phu ilmenite pure ore). Yen (ore placer in the grey sand layer). The list of exploration projects in the - Region IV: Ninh Thuan - Binh Thuan (ore planning period is provided in Appendix II to placer in the grey and red sand layers). this Decision. di Planned exploration dd/ Planned titanium ore mining and - By 2015 processing © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 71 (Cong Bao nos 569-570/Septemher 16, 2013) - Planned ore mining and so1ting (ilmenite, rutile, zirconium and monazite pure + By 2015: To mine largely titanium otiginal ores). ore (in T hai Nguyen area) and titanium placer The list of titanium ore mining projects is in the grey sand layer (in all four areas). To provided in Appendix III to this Decision. concentrate on renovating, improving and - Planned titanium processing upgrading so1ting technology in order to raise Planned region-based product processing the percentage of recove1y of useful minerals is as follows: and reduce the wastage of water and electiicity. To research technologies and proceed with + Region I: To process largely titanium preparations for mining titanium ore in Luong slag. Son area (no1them Binh Thuan). + Region II: To process largely titanium slag + During 2016-2020: To continue mining and superfine zirconium. activities in the existing mines and start mining + Region III: To process largely titanium in mines already explored during the period slag, reconstin1ted ilmenite, superfine zirconium from now through 2015 in T hai Nguyen, Ninh and pigment. Thuan and Binh Thuan provinces. To invest in + Region IV: To build and develop a titanium large-scale ore mining and sorting in Luong industiy center, to 1nine and process titanium on Son (northern Binh T huan) with modern a large scale and with advanced technologies; technologies. processed products are planned to include + After 2020: To maintain mining in mines titanium slag, superfine zirconium powder, which still have ore deposits. Depending on zirconium oxychloride, pigment, porous specific conditions (market, deep processing titanium/titanium mineral and compounds. capabili ty, capital raising c a p ab ility, New investment projects must adhere to infrastructure conditions, etc.), to develop the principle of investment in concentrated new projects. processing to assure scale and capacity - Ore mining and sorting technologies: economy and convenience for the application + Titanium original ore in Thai Nguyen of advanced technologies and environmental area: To be mined according to the following treatment. A processing f acility may use technological diagram: Dtilling - blasting - materials from titanium 1nines both inside or loading - t1·anspo1tation - crnde ore so1ting - outside the region. pure ore so1ting (ilmenite and rntile pure ores). Planned product processing is as follows: + Coastal titanium ore placer (in the grey + By 2015: To produce largely titanium and red sand layers): To be mined according to slag, reconstin1ted ilmenite and a number of by­ the following diagram: Breaking - pumping - products from zirconium ( superfine zirconium, sucking - crnde ore so1ting - pure ore so1ting zirconium oxychloride), artificial rutile and © Vietnam Law & Legal Fornm

72 Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) welding powder, etc., to meet domestic and plants or plants built to produce fe1rnus titanium export demands. To research technologies only). and prepare investment in projects to produce + After 2020: To maintain the production pigment with a minimum capacity of 30,000 of porous titanium/titanium metal, titanium tons/year/plant, plans to produce ferrous slag and reconstituted ilmenite. To increase titanium and porous titanium/titanium metal pigment production capacity to meet domestic ofup to 20,000 tons/year. and expo1t demands. Depending on specific + During 2016-2020: To increase the conditions, by 2030, to raise the output of capacity of processing titanium for export fe1rnus titanium to 30,000 tons/year. and other products to meet the consumption The list of titanium processing projects in demand. To invest in and commission 2-3 the planning period is provided inAppendix IV pigment plants (planned to be built in Binh to this Decision. Thuan, Binh Dinh and Ninh Thuan) and a el Conditions for titanium ore processing porous titanium/titanium metal plant (to be built projects (new projects) in Binh Thuan), and projects to produce alloys - Standards of processed products containing titanium, first ofall fe1rnus titanium (in titanium slag, mechanical, metallurgical Table 4 Granular Content Name of processed size No. product Ti02 FeO Fe ReO ZrO Ti (%) (%) (%) (%) (µm) (%) (%)

1 Titanium slag - Grade 1 > 85 < 10 - Grade 2 >70 <85 < 10

2 Reconstituted ilmenite > 56 <9 <27 Altificial mtile or 3 �83 synthetic mtile

4 Monazite pure ore > 57

5 Zirconium powder - Grade 1 superfine �65 � 10 - Grade 2 fine �65 > 10� 75

6 Pigment Ti02 - Rutile >92.5 -Anatase >98 Porous titanium, 7 �99.6 titanium metal © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 73 (Cong Bao nos 569-570/Septemher 16, 2013) - Processing capacity and technologies I - Thai Nguyen), so the existing technical + Titanium slag: infrastructure network in the regions may be used for transpo1tation. For the transportation · The minimum capacity of a plant must be and expo1t of processed titanium products in 20,000 tons/year. Binh Thuan area, it is planned to build a general · The minimum capacity of a kiln must seaport in Binh Thuan (for transpo1tation of be 6,300 KVA, for semi-closed kilns with titanium products, processed bauxite ore and automatic capacity adjustment and dust control coal transshipment, etc.). (for projects to renovate and increase capacity 4. Investment capital to at least 3,200 KVA). The total investment capital demand + Reconstituted ilmenite: The minimum estimated for the planning period through 2030 capacity of a plant must be 20,000 tons/year. is VND 43,956 billion (approximately USD + Glinding superfine zirconium: 2,144 million), of which capital for exploration . The minimum capacity of a plant must be is VND 1,373 billion (approximately USD 67 5,000 tons/year. million), capital for mining and processing . For new investment projects: The output is VND 40,634 billion (approximately 1,982 of superfine zirconium (granular size� 10 �Lm) million), and capital for infrastmcture is VND must account for at least 50% of the total output 1,948 billion (approximately 95 million). of the plant. Expected capital sources: + Artificial mtile: The minimum output of -Capital for ore exploration and infrastmcture a plant must be 10,000 tons/year. investment: From capital sources acquired by enterprises themselves. + Pigment: To use chloride or sulfate technology dete1mined during the fo1mulation - C apital for mining and processing: of investment projects, aiming to assure From capital sources acquired by enterplises efficiency, satisfy the environmental standards themselves, domestic and foreign commercial and suite the characteristics of input matelials. loans, capital raised through the securities The minimum capacity of a plant must be market, issuance of project bonds and other 30,000 tons/year. lawful capital sources. + Porous titanium and titanium metal: The The detailed investment capital demand is minimum capacity of a plant must be 10,000 provided in Appendix V to this Decision. tons/year. 5. Solutions, mechanisms and policies g/ Planned transpo1tation a/ Solutions Most titanium ore mining and processing - Regarding m anagement of natural areas lie along the coast ( except region resources © Vietnam Law & Legal Fornm

74 Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) + Developing a complete database using - Regarding science, technology and digital technology to serve the management of international cooperation titanium ore sources nationwide. + Stepping up international cooperation, + Stepping up the exploration in order to first of all in the fields of research, transfer take the initiative in assessing reliable deposits of advanced technologies, environmental for projects expected to be commissioned in treatment and training of human resources for each peliod, first of all in the period through titanium ore mining and processing. 2020. + Elaborating a roadmap for step-by-step + Auctioning the mining right for the tennination of operation and elimination of remaining titanium mines, largely those in the mining and processing facilities using obsolete red sand layer. technologies, consuming large volumes of energy, having low percentage of natural - Regarding titanium ore mining and resource recove1y and causing enviromnental processing pollution. + Mining titanium ore only to supply + Researching and experimenting the use materials for deep processing projects, suitable of seawater in the mining and s01ting of crnde to their implementation progress, processing titanium ore in coastal mines. capacity and capability to sell processed products. All titanium ore mining projects must - Regarding infrastrncture restore the original tenain conditions under Building a complete technical infrastrncture regulations. network outside the fence of large-scale and + For coastal overlapping areas (mainly concentrated titanium ore mining and deep in Ninh Thuan and Binh Thuan provinces): processing areas in Binh Dinh, Ninh Thuan and Stepping up the early 1nining of titanium ore Binh Thuan provinces. in order to clear the ground for constrnction b/ Mechanisms and policies of industrial, tourist and civil works. Other overlapping areas which fail to meet the - Regarding titanium ore mining and conditions for mining may be treated as national processing natural resource reserve areas. Encouraging enterplises to cooperate or join + Project on investment, expanded investment in building concentrated titanium investment or renovation of titanium ore ore processing establishments in each area mining or sorting, production of titanium slag in order to save investment capital, assure or pigment must use advanced technologies scale economy and convenient application which save electricity, water and comfonn to of advanced technologies and environmental enviromnental standards. treatment. © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 75 (Cong Bao nos 569-570/Septemher 16, 2013) + Promoting cooperation with the global Article 2. Organization of implementation leading companies in titanium ore processing, 1. The Ministry of Industry and Trade with eminent technological and market shall: advantages and capability to raise capital for - Assume the prime responsibility for, investment in large-scale pigment, titanium and coordinate with related ministries and metal/alloy processing projects. localities in, publicizing the master plan, + Promoting the production of processed and guiding, supervising and inspecting the titanium ore products of high commercial value implementation. for expo1t. - Periodically review and evaluate results - Regarding finance of the implementation of the master plan; + Revising and promptly adjusting taxes, update information on natural resources, charges and fees as reasonable, ensuring market and impacts of projects on the socio­ harmony between the interests of the State, economic development in project areas, and enterplises and people in the localities where propose adjustments to the master plan when minerals are mined. necessary. + The State provides supports for the - Propose solutions to strictly control the research and transfer of technologies for circulation and sale of titanium pure ore and processing porous titanium/titanium metal and processed products; coordinate with 1ninistries, alloys under relevant regulations. localities and the Vietnam Titanium Association - Regarding human resources in fo1mulating specific mechanisms and policies to promote the processing of pigment, porous Prioritizing the training of managers, titanium and titanium metal. technicians and specialists in titanium mining and processing in the master plan - Coordinate with related ministries and on development of human resources for localities in directing, supe1vising and inspecting the Central Vietnam key economic region investors in implementing titanium ore 1nining with reasonable preferential, supporting and and processing projects in order to assure incentive policies. application of advanced and environment­ friendly technologies and general socio­ - Regarding science and technology economic efficiency. Promoting the research and application of sciences and technologies to the deep processing 2. The Minist1y of Natural Resources and of titanium ore in order to quickly receive and Enviromnent shall: master technologies, thus proactively enabling - Direct the exploration and dete1mination the perfo1mance of jobs which are cmTently of titanium resource deposits, especially in perfo1med by hired foreign parties. areas where titanium exists in the red sand © Vietnam Law & Legal Fornm

76 Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) layer. Coordinate with related ministries and master plan on the external transport system localities in zoning off and submitting to the and seaports to se1ve the transportation for Prime Minister for decision naniral reserve development of the titanium mining and areas and areas ineligible for auction of the processing indust1y. titanium mineral mining 1ight in accordance 5. The Ministry of Planning and Investment with the mineral law. shall assume the prime responsibility for, - Assume the prime responsibility for and coordinate with related ministries in, reviewing and examining titanium ore mining mobilizing and calling for ODA capital and projects, then take measures to handle projects allocating capital for the preparation for and unconformable with the master plan or implementation ofinvestment in infrastrucnire failing to meet technical, technological and facilities to se1ve the titanium indust1y. enviromnental requirements. 6. The Minist1y of Finance shall assume the - Assume the prime responsibility for, and prime responsibility for, and coordinate with the coordinate with ministries, sectors and localities Ministry of Industry and Trade and the Ministry in, directing the land use of titanium projects, of Natural Resources and Environment in, thereby minimizing impacts on agriculniral, revising tax and charge policies in each peliod forestry, fishery and tourist activities in to suit types of processed titanium ore products, localities. with a view to promoting production and sale - Assume the prime responsibility for, and of deeply processed products. coordinating with local administrations in, taking 7. The Ministry of Agricultur e and enviromnental solutions for titanium projects; Rural Development shall assume the prime propose the enhanced state management of the responsibility for, and coordinate with related enviromnent in titanium projects. ministries and localities in, directing the - Assume the prime responsibility for planning of investment in building rese1voirs developing and updating the database on and dams for supply of water for titanium ore natural resources and titanium ore deposits. mining and processing, especially in Ninh 3. The Ministry of Science and Technology Thuan and Binh Thuan provinces, combined shall assume the prime responsibility for, and with the supply of water for agriculnire and coordinate with the Ministry of Industry and rnral development. Trade in, directing and supe1vising the transfer 8. The People's Committees of the provinces and application of advanced and environment­ and cities where titanium mineral activities are friendly technologies for production of pigment, canied out shall: porous titanium/titanium metal and alloys. - Closely coordinate with the ministries in 4. The Minist1y of Transpo1t shall assume organizing the implementation and management the prime responsibility for revising the of the master plan. © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 77 (Cong Bao nos 569-570/Septemher 16, 2013) - Assume the prime responsibility for, - Mobilize its member enterprises to actively and coordinate with the Ministry of Natmal cooperate and associate with one another in Resources and Environment, the Ministry of researching and applying new technologies Industry and Trade and related ministries in, and investing in large-scale titanium deep carefully reviewing boundaries of mine areas processing projects. expected to be explored and mined in the planning period in their localities, proposing Article 3. This Decision takes effect on the handling of areas overlapping industrfal, the date of its signing and replaces the Prime tourist, agricultural and forestry projects (if Minister's Decision No. 104/2007/QD-TTg of any) in their localities right from the stage July 13, 2007. of examination and agreement fo r grant Article 4. Ministers, heads of ministerial­ of exploration licenses. Assume the prime level agencies, heads of government-attached responsibility for protecting unexploited local agencies, and chairpersons of provincial-level titanium mineral resources. People's Committees shall implement this - Assume the prime responsibility for, and Decision.- coordinate with investors in, carrying out the payment of compensations for ground Prime Minister clearance and resettlement of local people NGUYEN TAN DUNG to serve titanium ore 1nining and processing projects. - Formulate policies to support investors in selecting, tr·aining and employing local people, providing job training and attracting high­ quality workers for the projects. - Actively propagate and disseminate guidelines, policies and laws on minerals related to the implementation of the master plan in their localities. 9. The Vietnam Titanium Association shall: - Join the state management agencies in organizing, studying and proposing mechanisms and policies to create favorable conditions for the implementation of the master plan. © Vietnam Law & Legal Fornm