HANOI -- Leading Vietnamese steelmaker Hoa Phat Group has purchased the entire interest in an Australian iron ore mine to secure a stable supply of raw materials in a competitive market.
The Roper Valley project, located in the Northern Territory, is Hoa Phat's first major mining interest owned overseas. The steelmaker has not disclosed the value of the deal.
The move comes as China, the world's largest steel producer, ramps up production to meet the pandemic-recovery demand. Hoa Phat is also exploring the purchase of interests in Australian coking coal mines, another essential element of steelmaking.
Hoa Phat procures 10 million tons of iron ore yearly as the company expands steel production. Roper Valley's iron ore reserves are estimated at 320 million tons, according to a news release Monday, and the project has the capacity to produce 4 million tons annually.
Vietnam is the largest producer and consumer of steel in Southeast Asia. Exports to neighboring countries are rising as well.
In 2019, Hoa Phat invested 52 trillion dong ($2.26 billion) to start an integrated iron and steel production complex in Vietnam's central province of Quang Ngai.
The group's crude steel production capacity hovers around 8 million tons annually. Last year, Hoa Phat started shipping hot rolled steel for a wide range of uses, such as automobiles and home appliances.