A major mining group was licensed to exploit bauxite in the central highlands Friday. 

Under the license, the Vietnam National Coal and Mineral Industries Group (Vinacomin) will run a nearly $490-million project in Lam Dong Province.

Vinacomin will spend VND7.78 trillion on the Lam Dong Bauxite-Aluminum Complex, which will occupy 142 hectares in Bao Lam District, some 120 km from the provincial capital of Da Lat.

Bauxite is the raw material used to make alumina, a white powder used in producing aluminum.

Vinacomin expects to exploit 3.96 million tons of bauxite a year to produce 600,000 tons of aluminum per year.

Speaking at the licensing ceremony, Lam Dong Province People's Committee chairman Huynh Duc Hoa said the provincial government would create favorable conditions for the state-run group to begin operations on schedule in 2010.

Vinacomin will enjoy a land use fee exemption for its first 15 years of operation, Hoa said.

The Tan Rai bauxite mine in Bao Lam District, 300 km northeast of Ho Chi Minh City, is estimated to have a reserve of over 176 million tons of ore.
Vietnam estimates its raw bauxite ore reserves at up to eight billion tons, the world's third-largest after Guinea and Australia.

Most of Vietnam's bauxite reserves have yet to be tapped, according to Reuters.

Even though Vietnam would not be producing alumina until 2009, neighboring China, the world's top importer of alumina, would be among several potential buyers, Reuters quoted Vietnamese officials as saying this April.

Last December Aluminum Corp. of China Ltd. (Chalco), the world's second-largest alumina producer, said it would cooperate to mine bauxite and produce alumina in Dak Nong Province.

Officials said Vinacomin plans to produce a combined 1.6 million tons of alumina by 2010 from Tan Rai and Dak Nong.

Vietnamese officials have said the project with China would cost more than $1.3 billion as it would include the cost of building a railway to transport alumina to a seaport.