The Kobelco Iron Nugget Vietnam Limited Company (KINV) on July 24started construction of the first sponge iron plant in Vietnamwhich has a total investment of 1 billion USD.

The project,which is part of the government’s master plan for the steel industrydevelopment during 2010-2015, will cover more than 400,000sq.m in theHoang Mai Industrial Zone, Quynh Luu district, the central provinceof Nghe An.

In the first phase, the plant is expected tobe put into operation in 2012 with an annual capacity of one milliontonnes, half for domestic consumption and the rest for export to Japan.

In the second phase, scheduled to start in 2014, theplant’s capacity will be raised to two million tonnes per year. In thisperiod, KINV will study to install a steel producing plant to createfinished steel products from sponge iron.

According to KINV,sponge iron can replace cast iron in the process of steel refining,ensuring the high quality of steel.

KINV’s plant will mainlyexploit iron ore from Thach Khe iron mine in Ha Tinh province and coalfrom Quang Ninh province.

The plant will apply environmental-friendly ITmk3 technology, which does not discharge fumes.

KINV, a subsidiary of Japan’s giant Kobe steel group, says itwill recruit and train about 90 local workers once the plant is put intooperation./.