China’s Lust for Resources May Be Vietnam’s Gain

Vietnam is pressing ahead with efforts to lure investments from Chinese mining companies despite facing an increasingly bold environmental lobby at home and a deep-seated suspicion of China.

Prime Minister Nguyen Tan Dung calls mining an important element in Vietnam’s economic development. But in recent weeks, growing opposition to mining has put his government on the defensive.

On Tuesday, Deputy Industry Minister Le Duong Quang issued a statement saying a state-run Vietnamese company will go ahead with a $460 million venture with a Chinese company to extract bauxite ore from Vietnam’s pristine Central Highlands region. But in an apparent attempt to placate criticism, he emphasized that the Chinese company won’t have an equity stake in the project.

Mining poses a policy conundrum for Vietnam’s Communist leaders. The country has a large trade deficit with China — $11 billion in 2008 — and is eager to increase exports such as minerals to its larger, more prosperous northern neighbor.

Chinese companies, for their part, are keen to participate in mining projects in the Central Highlands, which the Vietnamese government says holds 5.4 billion metric tons of bauxite — the world’s third-largest reserve of the ore, which is used as a raw material to make aluminum. Vietnam says it needs around $15.6 billion to invest in mining and refining bauxite by 2025 in order to make the most of its deposits.

Read the rest fromThe Wall Street Journal:
http://online.wsj.com/article/SB1
24122437540679313.html

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