Vietnam's PM backs controversial bauxite project

HANOI, Aug 19 - Vietnam's prime minister backed a controversial bauxite project that triggered criticism for its environmental safety and strategic location, saying it would pave the way to establish his country's aluminium industry. Vietnam needs about $15.6 billion to invest in major bauxite and alumina refining projects by 2025 to make use of its vast, largely unmined bauxite ore reserves, most of them in the country's Central Highlands. Prime Minister Nguyen Tan Dung, on a visit to the Tan Rai bauxite mining project in the province of Lam Dong on Tuesday, also said the complex would aid Vietnam's economic development, according to state newspapers and the government's Web site. The $460-million Tan Rai alumina plant is being built by China Aluminium International Engineering Co, the engineering arm of Aluminum Corp of China Ltd <2600.HK>. It has a planned capacity of 600,000 tonnes per year by 2010 and 1.2 million tonnes per year after that, according to the Prime Minister's 2007 plan approval. But critics of the project, ranging from academics and clergy to a retired general who is perhaps the country's best known war hero, say its environmental impact is likely to be severe. Many also oppose the participation of the Chinese firm and its imported workforce, saying its Central Highlands site is too strategically important. The region, which borders Cambodia and Laos near Vietnam's narrow waist, produces 80 percent of its coffee output and is also a key area for commodities such as pepper, rubber, cocoa and cotton. Dung urged the Chinese building firm to "properly carry out its commitments and make progress, while at the same time emphasising that this is a project that contributes to traditionally friendly relations between Vietnam and China". Vietnamese are deeply suspicious of China after centuries of tense relations, wars and territorial skirmishes, despite friendly rhetoric from the countries' leaders. In June, a state newspaper reported that Vietnam would fine six Chinese contractors for importing workers without permits for the Tan Rai project. In the face of criticism, the government also ordered new environmental assessments of parts of the bauxite projects. (Reporting by John Ruwitch; Editing by Jason Szep and Clarence Fernandez)