The Capital’s Demand: An Investigation into August’s Sand Mine Auction, Where Bids Soared to 70 Times the Reserve Price

The Hanoi People’s Committee Office has issued Document No. 10061/VP-TNMT regarding the directives of Mr. Nguyen Trong Dong, Vice Chairman of the Hanoi People’s Committee, related to the auction of mining rights for three sand mines: Chau Son, Lien Mac, and Tay Dang – Minh Chau.

Vice Chairman of the municipal People’s Committee instructed the Department of Natural Resources and Environment to promptly address and resolve the implementation of Dispatch No. 1087/CĐ-TTg dated November 11, 2023, issued by the Prime Minister. He also requested a report on the execution of the tasks assigned in documents No. 1325/UBND-TNMT dated May 4, 2024; No. 6536/VP-TNMT dated May 31, 2024; and No. 7443/VP-TNMT dated June 20, 2024, from the Hanoi People’s Committee Office. The department has been given a deadline of August 2024 to complete these tasks.

Mr. Dong also assigned the municipal Inspectorate to closely coordinate with the Department of Natural Resources and Environment in carrying out the above-mentioned contents.

Previously, on November 5-6, 2023, the Hanoi Department of Natural Resources and Environment organized an auction for mining rights for three sand mines: Chau Son (Chau Son commune, Ba Vi district), Tay Dang – Minh Chau (Tay Dang town, Minh Chau commune, Ba Vi district), and Lien Mac (Thuong Cat ward, Bac Tu Liem district). More than 40 investors from various northern provinces and cities participated in the overnight auction, which lasted for 21.5 hours. Catering and logistics were arranged on-site for the participants.

The auction, which started at 9 am on November 5 and ended at 5:33 am on November 6, saw intense competition, with the final price reaching VND 1,690 billion, 70 times the starting price.

Specifically, the Chau Son sand mine in Chau Son commune, Ba Vi district, had a licensed exploitable sand volume of over 700,000 cubic meters. With a starting price of VND 2.8 billion and an incremental bid of VND 144 million, it took 89 rounds of bidding for the auction to end with a winning price of nearly VND 400 billion, more than 137 times the starting price. The winner was Vietnam Son Investment and Trading Joint Stock Company.

Regarding the Lien Mac sand mine in Thuong Cat ward and Lien Mac commune, Bac Tu Liem district, with a sand volume of over 500,000 cubic meters, the starting price was VND 2 billion, and the incremental bid was VND 103 million. After 53 rounds of bidding, the winning price was VND 408 billion, 200 times the starting price. The winner was KSP Trading and Service Investment Co., Ltd.

As for the Tay Dang – Minh Chau sand mine in Minh Chau and Chu Minh communes, Ba Vi district, with a licensed exploitable volume of nearly 4.9 million cubic meters, the starting price was over VND 19 billion, and the incremental bid was VND 965 million. It took 21 rounds of bidding to reach a winning price of over VND 880 billion, nearly 46 times the starting price. The winner was Phuc Loc Thinh Trading Co., Ltd.

Given the unusual and contrasting information surrounding the auction results, which could potentially impact socioeconomic development and the construction materials market, the Prime Minister issued Dispatch No. 1087/CĐ-TTg on November 11, 2023. This dispatch instructed the Chairman of the Hanoi People’s Committee to immediately inspect and review the entire process of surveying, evaluating mine reserves, preparing dossiers, and organizing auctions for mining rights for the three sand mines. The aim is to ensure strict compliance with the law and prevent organizations and individuals from exploiting loopholes for personal gain, causing losses and waste, or forming interest groups.

By doing so, any violations of legal provisions in the auction of mining rights can be detected early and dealt with strictly, preventing bidders from taking advantage of the auction to drive up prices and cause market disruptions.