CASM CASM -- ASIA WORKSHOPASIA WORKSHOP27 27 -- 29 November 2006, 29 November 2006, BandungBandung, ,

IndonesiaIndonesia

COORDINATING COMMITTEE FOR GEOSCIENCE COORDINATING COMMITTEE FOR GEOSCIENCE PROGRAMMES IN EAST AND SOUTHEAST ASIA (CCOP)PROGRAMMES IN EAST AND SOUTHEAST ASIA (CCOP)

OVERVIEW OF MINING ACTIVITIES AND THE CURRENT SITUATION OF SMALL

SCALE MINING IN VIETNAM

Mr. Pham Ngoc ChiPrincipal expert

Department of Geology and Minerals of Vietnam

● Vietnam is a country with high mineral potential. So far the geological sector has discovered over 5000 deposits and prospects of over 60 different kinds of minerals. Many deposits have been put into mining operation for the need of socio-economic development

● In the past, during the period of centrally planned and subsidized economy, only state-own enterprises were engaged in mining activities. At present, in the period of market economy with management by the State, besides the State-owned enterprise, many other economic sectors are also engaged in the mining activities, such as private enterprises, limited liability companies, joint stock companies, enterprises with foreign invested capital, cooperatives, cooperation teams, etc.

• According to the incomplete statistics, at present there are about 1,500 entities engaged in exploration, mining and mineral processing, of which the State-owned enterprises account for 38% and enterprises with foreign invested capital 3 %.

• I. Some general evaluation of the mining activities

• I.1 General • • Medium scale mining • The Vietnam Coal and Mineral industry Group

(VINACOMIN), which has been formed by merging the Vietnam Coal Corporation and Vietnam National Mineral Corporation, is extracting coal in Quang Ninh coal basin and some scattered coal mines in various provinces: Thai nguyen, Lang Son, Son La, etc.; as well as tin, copper, lead-zinc, ilmenite, chromite ores.

• The Vietnam Steel Corporation (VINASTEEL) is extracting iron ore, metallurgical additives raw materials, refractory materials.

• The Vietnam Chemicals Corporation (VINACHEM) is extracting minerals for producing fertilizers and chemicals (apatite deposit in Lao Cai, pyrite deposits, chemical raw material deposits).

• The Vietnam Cement Corporation is extracting cement limestone and clay, and cement additive raw material deposits.

• Construction companies of the Ministry of Construction and Ministry of Transport are quarrying cement limestone, common construction materials in nearly all areas over the country.

Khai thác, chế biến sét caolanh

• Enterprises with foreign investment capital are engaged in the mining activities mainly for cement production (Nghi Son Cement company, Chinfon cement company...), facing stone production (Latina An GiangJoint Venture Company), white marble(Vietnam-Japan Mineral Company, Banpu-Thailand), mineral water (Lavie), tungsten (Tiberon), gold (in Bong Mieu, Dac Sa, Quang Nam province).

• • Small scale mining • Artisanal and small scale mining (ASM) is

one of the important means to ensure the economic growth as well as to reduce the unemployment in the country. In Viet Nam, ASM has been resulted from:

• - Liberalization in mining sector by the Mining Law of 1996 and the Law on amendment and supplement of some articles of the Mineral Law dated 14 July 2005;

• - High unemployment rate and poverty among rural population;

• - The minerals of Vietnam being scattered, mostly with small reserve, of low investigation stages, leading to the difficulties in investment and management of mining activities.

• - The lack of finance for further exploration during the mining operation, leading to the decrease of ore reserves in tin, lead-zinc, manganese, titanium mines, not ensuring long term mining operation.

• Most of State-owned enterprises managed by local authorities and non-state owned enterprises are small and make limited investment in the mining activities, as they have insufficient financial capacity for investment in equipment.

• These enterprises mainly extract minerals to be used as construction materials, copper ore, lead-zinc, tin, iron, chromite, titanium, apatite, kaolin, feldspar, gold, molipdenum, nickel, antimony, barite, fluorite, gemstone, phosphorite which are unevenly distributed in the territory and are concentrated only in the high mountain areas with low development of infrastructure.

Khai thác thiếc trái phép tại Quỳ Hợp

Khai thác, chế biến thiếc quy mô nhỏ

Bãi thải mỏ thiếc Sơn Dương

• At the moment, the ASM takes place in 40 provinces of Vietnam (out of 64 provinces); for some widespread resources such as sand and gravel it takes place in all provinces. About 1,000 licences have been granted by relevant Ministries and the People's committees of provinces for small scale mining operations (with licence terms of 5 - 10 years which can be extended subsequently).

• The number of artisanal and small scale miners is about 200.000: two times higher than the number of employees working in the medium scale mining industry. In 2005 the production of ASM accounted for at least 20% of the total mining output.

• I.2 Some achievements made in the mining activities

• - In general, in recent years, the mining production of some minerals such as: coal, iron ore, tin, titanium, lead-zinc, apatite, cement raw materials, and common construction materials …. has been kept in relatively high growth rate.

• The mining production of some minerals in 2005 is as follows:

• Coal: 26.5 million tons;• Tin: 3,500 tons; • Lead: 1,100 tons; • Zinc: 40,000 tons; • Iron ore: 650,000 tons; • Ilmenite: 250,000 tons;

• Zircon: 13,000 tons; • Chromite: 90,000 tons; • Gold: 2,000 kg; • Manganese: 30,000 tons; • Bauxite: 20,000 tons; • Serpentine: 200,000 tons; • Barite: 120,000 tons; • Bentonite: 20,000 tons; • Dolomite: 30,000 tons; • Cement limestone: 23 million m3; • Cement clay: 6 million tons; • Sand for site filling: 24 million m3 • Building sand and gravel: 17,5 million m3 • Brick clay: 18 million m3.

• - The mining industry of Vietnam, though with small scale investment, has made considerable contributions to the socio-economic development of the country.

• - More jobs have been created, the infrastructures in the localities where mines are located, especially in the remote areas, have been step-by-step improved.

• - The order in mining and protection of the mineral resources have been established, gradually reducing the illegal mining activities.

• - The mining entities in general are more conscious in complying with the provisions of the Mineral Law, attaching their production and business with the sustainable socio-economic development, environmental protection and occupational safety.

• II. Difficulties and shortcomings - The mining industry of Vietnam is still in

low level of development, the mining technology is still backward, therefore the low grade ore and accompanying useful components in the ore are not fully recovered.

- The artisanal and small scale miners still have not sufficient knowledge and skills; the organizational structures to ensure an efficient management are not in place and the legal and policy instruments are missing.

- Artisanal and small scale mining entails serious consequences such as destruction of the environment (gold mining with the use of cyanide in Quang Nam, Lao Cai, Lam Dong, Da Nang provinces; pollution with mercury in the gold amalgamation process;

• the lead, zinc, tin mining in northern mountain provinces affecting the surface water resources and rice fields; ilmenitemining along the coastal zone destroying mangrove forests which protect the coast against wind, waves and sand invasion;

• extraction of sand and gravel in the rivers causing river bank erosion, affecting transport structures, causing water pollution; quarrying of construction material affecting the landscape, causing air pollution;

• tailings disposed directly to the rivers; in some areas environmental restoration and rehabilitation is not carried out.

• III. Conclusion: • Artisanal and small scale mining

operations in Vietnam have made considerable contributions to the socio-economic development of the country. But it is causing some serious work safety and environmental problems;

• To overcome these problems and ensure sustainable development, the mining entities must:

- Invest in renovation of their equipment and technology to improve safety, health and environmental aspects of small scale mining operations;

- Comply with the Mineral Law

• The Central and local governments should:

- Strengthen the education, training, awareness campaigns and inspection work for the mining sector in general and ASM in particular.

- Organize regular meetings of artisanalsmall scale miners to exchange knowledge, experiences and cooperate in ASM.

Thank you for attentions.