Vinacomin aims to shrink coal stockpile

Tuesday, Oct 08, 2013 06:00

Processing coal at Vinacomin's Nui Beo Coal Company. Vinacomin plans to sell around 40 million tonnes of coal and reduce inventories this year. — VNA/VNS Photo Ngoc Ha

HA NOI (Biz Hub) — The Viet Nam Coal and Mineral Industries Group (Vinacomin) plans to sell 39-41 million tonnes of coal while reducing the volume of coal in stock in the latter months of this year.

The goal is in reach, as Vinacomin has inked a deal to export approximately 3 million tonnes of coal in the fourth quarter and the local demand was expected to increase in the coming time, the group said in its report on nine months' performance.

Vinacomin general director Le Minh Chuan, however, said over the past nine months, the group has encountered many difficulties, with slow power sales due to sinking exports being the biggest.

The period also saw a slump in the volume of coal sold to households, as hydro-electric plants, owned by Electricity of Viet Nam, had operated at full capacity while coal power plants did not.

Difficulties brought by natural resources taxation, policies on environment and labour shortages have also caused headaches, Chuan said, adding that the group had no choice but to cut costs and reduce prices.

In the January-September period, Vinacomin had shipped 8.4 million tonnes of coal abroad, representing a year-on-year decrease of 13 per cent, or fulfilling only 53 per cent of the target set for this year. This has resulted in 7.8 million tonnes of coal in stock.

During the period, Vinacomin also reported a VND38 trillion (over US$1.8 billion) revenue on coal.

Last month, the Ministry of Finance decided to cut the coal export tax from 13 per cent to 10 per cent in a move to help coal producers reduce their high stockpiles.

The move was made following a Vinacomin proposal. The group asked the Government to revoke a July hike in export tariffs, saying it had made a disastrous impact on its business.

According to the group, since the Government raised the coal-export tax from 10 per cent to 13 per cent in July, its coal export volume has dropped to only 120,000 tonnes a month, equal to a tenth of the previous amount.

The group said the rise in tariffs meant that export prices had to increase significantly.

Taxes and fees now make up 30 per cent of the production cost of export coal, and 20 per cent of coal sold to domestic customers. — VNS

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