Hoang Anh Gia Lai agrees to sell iron ore to China

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Hoang Anh Gia Lai Joint-Stock Co., Vietnam's biggest listed property company, will sell 1 million tons of iron ore to China next year, boosting earnings, chairman Doan Nguyen Duc said in an interview.

Hoang Anh Gia Lai, which is involved in real-estate, mining, rubber and hydropower in Vietnam, Laos and Cambodia, has about 60 million tons of iron-ore reserves, according to Duc. Duc has already signed contracts to sell 400,000 tons this year to China, at the spot price, he said.

Demand from steelmakers in China, the world's biggest buyer of iron ore, has been rising because of the government's stimulus spending plan. The cash, or spot, market price of ore delivered to China climbed to the highest in more than a year last week.

The sales will add at least VND650 billion ($34 million) to Hoang Anh Gia Lai's third-quarter profit, Duc said. The company, based in the Central Highlands city of Pleiku, expects pretax profit this year to rise to almost VND2.8 trillion, from VND1.7 trillion, on sales of iron ore and electricity, Duc said.

"We always make our targets based on the worst-case scenarios, and the lowest prices, so we're confident that we will beat our forecasts by the end of the year," Duc said.

Duc was Vietnam's second-richest man as of the end of 2009 based on the value of his share holdings, according to data compiled by Bloomberg. He holds more than 54 percent of the $1.1 billion company.

Hoang Anh Gia Lai closed unchanged at VND79,000 Wednesday on the Ho Chi Minh City Stock Exchange. The company gained 86 percent last year, compared with a 57 percent advance in the benchmark VN Index, according to data compiled by Bloomberg.

The company expects pretax profit this quarter to almost double from the same period last year to VND700 billion on sales of apartments, Duc said.

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