Russia plays nuke card with
Vietnam By Sergei Blagov
MOSCOW - Russia is playing the nuclear
card to curry favor with Vietnam's leaders,
leveraging its atomic know-how to draw an
advantage in gaining access to the Southeast Asian
country's various under-exploited natural
resources.
Now clearly emergent as a major
global energy player, Moscow has lost little time
in turning its oil barrels, megawatts and atoms
into foreign-policy tools, particularly when
dealing with the West and former Soviet satellite
states. But what has been less noticed is Moscow's
new drive to re-establish energy and
commodity-related dealings with its former Cold
War allies, particularly in Southeast Asia.
Russia is now bidding to win a tender
offer to build Vietnam's first
nuclear power plant,
according to officials at Atomstroiexport,
Moscow's state-run nuclear-technology export
agency. Despite continued controversy over
Russia's involvement in Iran's nuclear program,
Moscow has reiterated its plans to export nuclear
technology to other countries, regardless of
Washington's reservations. Moscow also recently
held talks with Myanmar's military junta, another
well-established nemesis of Washington, about the
possibility of building a nuclear power plant
there.
Vietnam is a less confrontational
destination nowadays, with the United States,
China and Russia all competing for commercial as
well as strategic influence.
From an
energy-security perspective, on the surface,
Vietnam's interest in nuclear technology makes
good policy sense. A Russia-Vietnam oil-and-gas
joint venture, known as Vietsovpetro, is currently
the cornerstone of Vietnam's energy industry and
is expected to expire some time between 2017 and
2020.
Russia, it appears, is dangling its
nuclear know-how before Vietnam in hopes of
sealing deals in other commodity and
energy-related fields. In mid-May,
Atomstroiexport's team attended a four-day
international nuclear-energy fair in Hanoi, where
the Russian delegation held talks with Vietnam's
Industry Ministry, Science and Technology Ministry
and Atomic Energy Commission, and with the Energy
Institute of Vietnam.
"Should a tender be
announced, Atomstroiexport would have good chances
of winning it," the company's first deputy chief
executive officer, Alexander Glukhov, announced in
Hanoi last Thursday. "We are absolutely
competitive and we have a very good offer,"
Glukhov said, implying that the Russian government
could be prepared to offer financial incentives to
win the multibillion-dollar bid.
Atomstroiexport is currently the world's
only nuclear company building power units for
nuclear plants in China, India and Iran - often to
Washington's chagrin.
Moscow has already
laid the groundwork to pull Vietnam into its
nuclear orbit. Russia has a long-standing nuclear
agreement with Vietnam, which reportedly involves
maintenance of the research test reactor at Dalat
in central Vietnam. In March 2001, Vietnam
announced plans to build its own nuclear power
station in either Ninh Thuan, also in central
Vietnam, or in the neighboring province of Binh
Thuan. Now Vietnam reportedly aims at
commissioning its first US$3.4 billion nuclear
plant by 2017-20, which Russia now hopes to build
and outfit.
Atoms for ores In
recent weeks - perhaps coincidentally, perhaps not
- other Russian energy and commodity-related
companies have quickly moved to re-establish or
set up new offices in Vietnam, notably just months
before Vietnam accedes to the World Trade
Organization (WTO) and is required to open its
commodity markets through competitive bidding to
multinational players. For instance, Russky Ugol,
Russia's main coal producer, opened its first
foreign office in Hanoi on May 5.
"We want
specific investment projects implemented on
Vietnamese soil, both in the coal and the metals
industries," said Vadim Varshavsky, Russky Ugol's
CEO. The company plans to open several plants in
Vietnam "in a couple of years' time", he said.
For Russia and Vietnam, such deals
represent a sort of reunion. During the 1970s and
1980s, for instance, the Soviet Union helped to
develop Vietnam's coal-mining industry, most
notably around Cam Pha in northern Vietnam.
Vietnam's coal reserves, situated mainly in the
north, have recently been estimated at a
substantial 20 billion tons.
In recent
years, Russia and Vietnam have resumed cooperation
in coal mining, electricity and natural gas.
Russia currently runs about 50 energy and
energy-related projects in Vietnam, including a
Kamaz project to help the Vietnam Coal Corp
(VinaCoal) build a truck factory in the central
province of Quang Nam. Siloviye Mashiny, or Power
Machines, is now aiming to supply generators and
other equipment to Vietnam's A Vuong
hydro-electric power plant.
Russia's
natural-gas monopoly, Gazprom, has meanwhile
spearheaded Moscow's recent efforts to
re-establish itself as a global fuel player. In
2000, Gazprom and Vietnam set up a $1 billion
joint venture on a parity basis to develop two
offshore gas fields, the so-called Block 112.
Commercial development of the fields, scheduled to
start last year, were estimated to yield nearly a
trillion cubic meters of gas reserves per year.
However, the project was slow to take off as
Gazprom was preoccupied with other global
endeavors.
Russian officials this month
indicated that the country's aluminum giant,
RusAl, is studying the possibility of building an
alumina facility and power plant in Vietnam at a
total cost of more than $1 billion. Although RusAl
is yet to reveal details of the potential deal,
the project could come as an unprecedented
development for Vietnam's aluminum industry.
During the Cold War-era bilateral partnership, the
Soviet Union did not mine bauxite directly in
Vietnam, but rather imported up to 50% of its
bauxite needs from India, Guinea and Guyana.
Meanwhile, Vietnam has said it aims to
develop bauxite mining and refinery projects in
the central-highlands provinces of Lam Dong and
Dac Nong. Vietnam says the country has more than 8
billion tons of bauxite ore reserves, including
7.9 billion tons in the central highlands region
and some southern provinces.
The Vietnam
Mineral Corp (Vimico), the country's largest
mining company, on April 7 started construction of
a bauxite facility in Lam Dong province. The $490
million project, due to come on-stream in 2009, is
scheduled to have a production capacity of 1.7
million tons of bauxite and 600,000 tons of
alumina per year.
Still, Russian companies
will soon face formidable international
competition for Vietnam's ores and minerals. On
April 25, US giant Alcoa announced that its Alcoa
World Alumina and Chemicals affiliate had signed a
memorandum of understanding (MoU) with Vietnam to
explore the feasibility of construction and
operation of an alumina refinery in the Gia Nghia
bauxite-deposit area in the Dac Nong area. The
first-stage capacity of the project would produce
upwards of 1.5 million tons per year.
Russia's aluminum giant is also set to
face heavy Chinese competition. Last December,
China's biggest aluminum producer, the Aluminum
Corp of China Ltd (Chalco), signed an MoU with
Vietnam for the construction of a 600-megawatt
thermal power plant and 300,000-tons-per-year
aluminum facility in Dac Nong. The $1.3 billion
joint-venture alumina plant would have a
production capacity of 4 million tons a year.
Apart from bauxite, Vietnam's commercially
exploitable and underdeveloped metals and mineral
industry includes iron ore, tin, copper, lead,
zinc, nickel, titanium, and apatite. As global
commodity prices rise, Vietnam's under-exploited
deposits will likely be of increasing interest to
multinational mining concerns, all the more so
after the country is bound by WTO trade and
investment rules. The global race for Vietnam's
natural resources is now firmly under way, and
Russia has managed a savvy head start in the
competition.
Sergei Blagov
covers Russia and post-Soviet states, with special
attention to Asia-related issues. He has
contributed to Asia Times Online since 1996 and
was based in Southeast Asia from 1983 to 1997.
Nova Science Publishers, New York, has published
two of his books on Vietnamese history.
(Copyright 2006 Asia Times Online Ltd. All
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