Hoa Phat (HPG) Takes 48% Stake in New Company to Acquire 120M Ton Iron Mine in Lao Cai

Overview

Hoa Phat Group (HPG) has taken a 48% stake in a newly established company, CTCP Khai thac va Che bien Kim loai Thu do, which will take over the Quy Xa iron mine in Lao Cai province. The mine holds an estimated 120 million tons of reserves and was previously operated by a joint venture with a Chinese partner that has now withdrawn. This strategic move secures a key raw material source for HPG’s steel production.

Key Facts

• HPG, through its subsidiary CTCP Gang thep Hoa Phat, contributes 48% of the charter capital of the new company.
• The new company, CTCP Khai thac va Che bien Kim loai Thu do, was established in late 2025 with initial charter capital of VND 1,200 billion, later raised to VND 3,000 billion.
• Chairman Tran Dinh Long personally holds a 12% stake in the new company.
• Tran Dang Khoa, a leader of a THACO affiliate, contributes VND 300 billion (25% stake).
• The Quy Xa mine has estimated reserves of 120 million tons of iron ore.
• The previous joint venture (VNSTEEL 46.85%, Lao Cai Mineral Company 8.1%, Kunming Iron & Steel 45%) has been loss-making and carries about VND 6,500 billion in bad debt.
• The project was originally licensed in 2007 and employs approximately 2,000 workers.

What Happened

According to a report from Bao Lao Cai, on May 11, the Standing Committee of the Lao Cai Provincial Party Committee held a meeting to discuss investment approval and investor selection for the Quy Xa iron mine project. The Chinese partner, Kunming Iron & Steel, has officially withdrawn from the joint venture. Replacing it is CTCP Khai thac va Che bien Kim loai Thu do, a company established in late 2025 and led by Tran Van Nam.

HPG’s involvement comes through its subsidiary CTCP Gang thep Hoa Phat, which contributed 48% of the new company’s charter capital. Chairman Tran Dinh Long personally holds 12%, while Tran Dang Khoa (affiliated with THACO) holds 25%. The new entity is expected to bring financial resources, technology, and management capability to restart the mining and metallurgy complex.

Market Context

HPG shares closed at VND 26,550 on May 17, 2026, down 1.85% with volume of 75.8 million shares. The stock trades on HOSE. The steel sector has been under pressure from weak demand and falling prices, but HPG’s move to secure domestic iron ore supply could improve its cost structure and reduce reliance on imports. The project’s success would also support the government’s goal of developing a self-sufficient steel supply chain.

Strategic Significance

For HPG, gaining control of the Quy Xa mine provides a long-term competitive advantage in raw material sourcing. Vietnam’s steel industry relies heavily on imported iron ore, and domestic supply is limited. By integrating upstream, HPG can reduce input costs and volatility. The project also aligns with national industrial policy to revive a strategic asset that has been a financial burden for state-owned enterprises. The involvement of THACO-affiliated capital suggests potential synergies in logistics and heavy industry.

What to Watch

• Official approval from Lao Cai provincial authorities and final investment decision.
• Progress on restructuring the old joint venture’s VND 6,500 billion bad debt.
• Timeline for mine restart and ramp-up of production.
• HPG’s Q2 2026 earnings report for commentary on raw material costs and capex.
• Any further capital increases or partner changes in the new company.