General director of state-run Vietnam National Mineral Corporation (VIMICO) Ngo Van Troi said foreign miners had come unstuck in the communist-ruled country because they had sought quick profits in a complex environment. The industry was also problematic for foreign miners because the government owned all land in Vietnam, Troi said.

"We believe we can extract the minerals ourselves. What we'd like foreign firms to do is get involved in processing," he said. "The law in other countries allows foreign companies to explore, produce and own mines. But in our country, land and minerals are the state's property," Troi said in an interview, adding that foreign miners were still welcome to explore.

Foreign miners have said Vietnam held considerable mining potential but that key impediments were anunattractive 1996 Mineral Law and a perceived stranglehold over the industry by a variety of state-owned enterprises (SOEs).

The Mineral Law, which governs all mining in Vietnam, does not give finders of commercial deposits automatic rights to tap the discovery, only so-called "special" rights, a term considered too risky for most foreign companies.

While not discussing the specifics of the law, Troi said firms were entitled to get what he called "priority" rights to mine discoveries, something he believed was the same as exclusive.

Troi also denied that SOEs were trying to protect their position in the industry. "It is not correct to say SOEs don't want foreign investment in mining. We look forward to receiving investors. The chance of quick profit is low but there is so much potential," he said.

VIMICO has 20 affiliates under its control and a total of 8,000 employees. The corporation processes tin, has interests in the exploration and production of zinc, titanium and chromite and has eyed movinginto bronze, copper and non-ferrous metals, Troi said, without giving figures on commercial reserves.

He added that the two minerals which excited the company most were bauxite ore and what he called "rare ore" -- both of which could be processed with the help of foreign investors. Vietnam had established reserves of six billion tonnes of bauxite ore, but needed $1 billion in investment to get aluminium production into full swing.

He added that Vietnam had major stocks of rare ore, which contained all types of lucrative ores and chemicals. Vietnam also has quantities of coal, gold and gemstones but different state companies oversee their extraction. Troi said VIMICO's annual sales were $50 million a year, with net profits 3-5 percent of that figure, or $1.5-$2.5 million.

Sales growth in the first half of the year was only about four per cent compared with the same period last year, Troi added, without giving specific details.