Signs of violation in case of 44,000 tonnes of raw bauxite ore of Bao Nguyen Company

	Prosecute smuggling case related to 44,000 tonnes of ore of Bao Nguyen Company
	44,000 tonnes of ore of Bao Nguyen Company is raw bauxite ore
	44,000 tons of ore from Bao Nguyen Company under management for investigation

Sample of the export shipment of more than 44,000 tonnes of ore declared as raw bauxite ore by Bao Nguyen Company.

Unprocessed ore has enough content of refined ore

Regarding the legal basis for Bao Nguyen Company to export ore in the customs dossier on March 12, 2020, the Industry Department (Ministry of Industry and Trade) issued document 85 / CN-KSLK providing information to determine the conditions for exporting refined bauxite ore (at the request of the Anti-Smuggling and Investigation Department, the General Department of Customs), which includes the following contents: Document 8228 / BCT-CNNg dated August 25, 2014 of the Ministry of Industry and Trade and Decision 270/QD-BND dated January 31, 2019 of the People's Committee of Lang Son Province has legal validity as a basis for the agency to consider export procedures.

What is the content of Document 8228/BCT-CNNg dated August 25, 2014 of the Ministry of Industry and Trade and Decision 270/QD-BND dated January 31, 2019 of the People's Committee of Lang Son Province?

Specifically, Document No. 8228 / BCT-CNNg on the export of refined bauxite at Leo Cao mine, Lang Son, Ministry of Industry and Trade allowed Bao Nguyen to export refined with Al2O3 content> = 49%.

However, according to Article 4, Article 6 of Circular No. 41/2012 / TT-BCT, enterprises are permitted to export bauxite ore which are processed and satisfy the quality standards: for aluminium hydroxide - Al(OH)3 >=64%, AL2O3> = 64%; and for Alumin, AL2O3> = 98%.

The Ministry of Industry and Trade only considers exports of minerals in special cases when the minerals are in the list of minerals eligible for export, processed, but do not satisfy the quality standards for objective reasons (such as the geological characteristics of the mine, the minerals are byproducts collected during the processing of the primary minerals, or the tailings of which the content is not able to be increased, etc.

On the other hand, based on the investment certificate provided by the Department of Planning and Investment of Lang Son, when unprocessed, the quality of bauxite ore at Leo Cao mine of Bao Nguyen Company has an AL2O3 content of 48, 61-53.22% and belongs to alluvial deposits.

But somehow, in Document No. 8228 / BCT-CNNg, the Ministry of Industry and Trade allowed Bao Nguyen Company to export refined bauxite ore, which is subject to special case with AL2O3 content> = 49% (?). This means the content of AL2O3 is equal or even lower than the unprocessed raw ore of Leo Cao mine.

Did the company take advantage of Document No. /BCT-CNNg to export raw minerals, but declare them as refined minerals with the content of raw minerals?

Decision No. 270 / QD-UBND of the People's Committee of Lang Son province allowed Bao Nguyen Company to export 118,000 tonnes of refined bauxite ore in 2018.

However, based on the documents collected at the Tax Department of Lang Son, the Department of Industry and Trade of Lang Son province, the Customs agency determined the entire amount of ore exploited and processed in 2018 of Bao Nguyen Company has sold out.

In fact, the company also admitted to the Customs agency there were not any ores in stock (such as a license issued by the People's Committee of Lang Son).

Thus, Decision No. 270 / QD-UBND shows signs of illegal issuance.

Notably, based on Decision 270 / QD-UBND, in addition to the seized shipment, in 2019, Bao Nguyen Company exported 99,195 tonnes of refined bauxite ore, worth more than VND 24 billion.

“Thus, the two documents in the customs dossier, which are the legal basis for Customs to consider and allow Bao Nguyen to export the bauxite ore mentioned above not in accordance with the law? The General Department of Customs will send a written request to the Ministry of Industry and Trade and the People's Committee of Lang Son Province to consider the licensing,” the General Department of Customs informed

Mining capacity increases while equipment decreases

Regarding machinery chains for the mining and processing of bauxite ore of Bao Nguyen Company, according to the investment certificate issued in 2008, the capacity of the bauxite ore mining and processing line at Leo Cao mine is 300,000 tonnes of ore annually.

The main equipment is: load shaft (four units); mine car 0.6m3 (40 units); bulldozer (three units); sario (three units); screening system (three units); jaw crusher machines (four units); sieving machine system (two units); bauxite kilns (six units); conveyor system (four systems); air chamber presses (seven pieces); IFA car (seven units); water pump (one unit); generator 250KVA (one unit) and 100KVA backup generator (one unit).

However, according to the Customs agency, Do Quang Tuan - Director, legal representative of Bao Nguyen Company said before 2015, the company did not have its own system of machinery and equipment chains as registered in the investment certificate but hired them. From 2016, the company bought machinery and equipment and registered and declared them to the company’s assets.

In 2017, Bao Nguyen Company registered for adjustment of mining capacity which was approved by the Department of Planning and Investment of Lang Son Province with a capacity of about 800,000 tonnes of ore / year.

At the same time, the main machinery and equipment system was cut to only 2.3m3 Amphibious backhoe hydraulic excavator (two units); 25-ton dump truck (three units); bulldozers (three units), 250KVA transformer station (one unit), 400 KVA transformer station (one unit), screening system (two units). Thus, although the mining and processing capacity increased by nearly three times compared with the first investment certificate, the main equipment for ore processing such as kilns, crusher machines, sieving machines and more has been removed (there are only mining machinery and equipment).

Lack of documents and records

For the supervision and management of mineral mining and processing activities, Bao Nguyen Company does not install a weighing station at the mine nor a camera system to determine the actual output of extracted minerals (raw ores) and output of processed minerals (refined ore) and does not make records as prescribed in Clause 2 Article 42 of Decree No. 158/2016 / ND-CP dated November 29, 2016 of the Government and Clauses 1, 2, 3 of Article 3 of Circular No. 61/2017 / TT-BTNMT dated December 22, 2017 of the Ministry of Natural Resources and Environment.

For the infringing ore shipment, when being brought out of Leo Cao mine, it was not weighed to determine the volume and did not have delivery note cum transport order as prescribed by law.

With the output and consumption of hundreds of thousands of tonnes of ore per year, it seems the management of the company is quite loose.

Notably, a representative of the company said the company has processing activities, but it is unreasonable that the output of extracted raw ore and output of refined ore (as declared by the company) is still equivalent. There is no loss rate (for example, the company extracted 100,000 tonnes of raw ore and after processing, they still obtain 10,000 tonnes of refined ore?).