After 200 auction rounds, the sand mine in Quang Nam increased from 1.2 billion to 370 billion.

A typical example is the result of the sand mine auction, which just took place in Quang Nam province, which shocked many people when the starting price was only 1.2 billion VND but the winning bid was up to 370 billion VND.

The auction of BD2B sand mine in Dien Tho commune (Dien Ban town) started at 8:00 a.m. on October 18 and ended at 4:00 a.m. on October 19.

Notably, the starting price was 1.2 billion VND, but after 20 hours and 200 rounds, the sand mine was priced at 370 billion VND, an increase of more than 1,500% compared to the starting price. The winning bidder is headquartered in Da Nang City.

According to a sand trading company in Dien Ban town, the current price of sand approved by the Quang Nam Provincial People's Committee is 150,000 VND/m3. The price of sand at the wharf is only 150,000-180,000 VND/m3. Therefore, the auction result of this sand mine surprised many people because of the "huge" price.

Mr. Nguyen Thanh Vy, Head of the Department of Natural Resources and Environment (TN&MT) of Dien Ban town, admitted that the price this company won the auction was too high. The price of sand after the auction was more than 2.3 million VND/m3, if taxes and fees were included, the price of 1m3 of sand would be nearly 3 million VND. This is unrealistic compared to the current market price.

Furthermore, it is not known whether the business will forfeit its deposit after winning the auction.

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The sand mine auction in Dien Tho commune lasted 20 hours. Photo: Contributor

According to the report of the Department of Natural Resources and Environment of Quang Nam, the auction results of mineral exploitation rights at this mine site had unusual factors. The price paid was many times higher than the starting price and the price of construction materials announced by the authorities.

The final price also shows signs of market manipulation for profit, pushing up the price of construction sand materials, negatively affecting economic security and social order.

On the afternoon of October 19, the Chairman of the People's Committee of Quang Nam province issued a document directing the temporary suspension of recognition of the results of this sand mine auction, and at the same time assigned the provincial police to investigate, verify, and clarify the motive for the unusually high bid.

Hanoi cancels auction results of nearly 1,700 billion VND for 3 sand mines

The Department of Natural Resources and Environment has decided to cancel the results of selecting the unit to implement the bidding package to organize the auction of the exploitation rights of 3 sand mines including: Thuong Cat (Bac Tu Liem district), Tay Dang - Minh Chau (Ba Vi district) and Chau Son mine (Ba Vi district).

The reason for the above decision is that the contractor violated the provisions of the Law on Bidding, such as intentionally providing dishonest and non-objective information and documents in related documents to distort the results of contractor and investor selection.

Previously, on November 5, 2023 and November 6, 2023, Hanoi authorities organized an auction for the right to exploit the sand mines of Thuong Cat, Tay Dang - Minh Chau and Chau Son. As a result, 3 units won the auction with a total amount of about 1,700 billion VND, many times higher than the starting price.

In May 2024, in a document reporting to the Prime Minister on the results of the review of the auction process of the above 3 sand mines, the Hanoi People's Committee stated that through comparing the prices of construction materials, it was shown that one cubic meter of unexploited sand in these 3 sand mines was higher, even many times higher than the price of sand at the foot of the construction site.

This leads to sand mining projects at these three mines being unprofitable. When considering investment approval, the investment projects will not only fail to meet the criteria for economic profit, but may also have negative impacts on economic security and social order.

Need stronger sanctions if deposit is abandoned

In fact, there have been cases where businesses won auctions with bids dozens of times higher than the starting price and then “ran away”. Therefore, many localities and experts believe that sanctions should be increased against businesses that win auctions but do not continue to perform.

Specifically, if a business abandons a sand mine after a successful auction, instead of being banned from participating in the auction for 1 year, it should be increased to a ban of 5-10 years or permanently. The deposit should also be increased to 20-40%, instead of 15%. This is to avoid businesses that cannot afford to raise the price and then abandon it.

Mr. Nguyen Minh Duc, a public policy expert, once said: Regulations on auctioning mineral exploitation rights were included in the 2010 Mineral Law. When this regulation was included in the law, it was expected that all mines would be auctioned, but then there were many exceptions. In the end, the number of auctioned mines was not too large.

The mines were not auctioned, so the money the State collected was only equal to the starting price. This led to budget losses from mines that were not auctioned for exploitation rights.

Therefore, Mr. Duc said: Since the State has collected a large amount of money from auctioning sand mining rights, when amending the Mineral Law, it must require auctioning all mines, without exception.