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

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

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

In the second phase, scheduled to start in 2014, the plant’s capacity will be raised to two million tonnes per year. In this period, KINV will study to install a steel producing plant to create finished 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 mainly exploit iron ore from Thach Khe iron mine in Ha Tinh province and coal from 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 it will recruit and train about 90 local workers once the plant is put into operation./.