Vietnam, seeking to reduce its reliance on steel imports, has started construction of the country’s largest steel plant, an official said Thursday.

Construction of the $1.6 billion plant, located at the Dung Quat Economic Zone in central Quang Ngai province, is expected to be completed in three years, said Nguyen Van Phu of the zone’s management board.

The plant will be operated by Tycoons Worldwide Steel (Vietnam) Ltd., a joint venture between Thailand’s Tycoons Worldwide Group and Taiwan’s E United Group. It will produce 3 million tons of steel ingots a year, he said.

An ingot is a mass of metal cast in the form of a bar or block for convenient shipping and storage.

The company intends to expand the plant in 2010, investing an additional $1.4 billion and eventually producing 5 million tons of ingots a year.

Annual demand for steel in Vietnam is forecast to rise to 10 million tons by 2010, from the current 6.5 million tons, according to government figures. Vietnam, which has no major iron ore mines, has to import most of its steel. (AP)

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