In 2010, the coal industry did not hike coal prices to stabilize the market at the direction of the Prime Minister. However, if current prices are kept unchanged, coal companies suffer more loss from more work they have done. To ensure the coal supply for big users like electricity, paper, fertiliser and cement companies, Mr Tran Xuan Hoa, General Director of the Vietnam National Coal - Mineral Industries Group (Vinacomin), has proposed the Government to allow Vinacomin to apply market-based selling prices soon.
As regards coal price and profit, at present, coal is sold to big users is US$27 per tonne while export prices are US$81.5 per tonne. Meanwhile Vinacomin needs VND39 trillion to invest in production each year. With this coal selling structure and the current price, the coal industry will lose more for more work they have done.
Mr Tran Xuan Hoa proposed the Government to allow Vinacomin to export dust coal for power generation because coal producers are keeping 6.5 million tonnes in their stores. The exportation of this low-energy coal will help coal firms clear their warehouses and increase incomes in foreign currencies.
According to the current coal allocating structure, coalminers sell 17 percent of output to cement producers and 50 percent to power plants, and keep 8 percent for reserves. According to Vinacomin, if Vietnam does not export coal, the inventory plus new production of 33 million tonnes will ensure the domestic demand in 2011. In addition, if coal prices are not raised, the coal industry will incur a loss of VND5,800 billion in the year and 30,000 workers will face lay-offs.
Also, according to the development roadmap, from now till 2015, Vinacomin will export coal the country has not needed. Thus, the exportation of bad coal will offset costs from loss-making sales to big users to stabilise the domestic market and increase funds for buying new machines and equipment for new projects.
According to Mr Hoa, although the increase in coal prices under the pricing roadmap is slow, the group will have to continue reviewing proper time for adjustment. Indeed, more proper pricing will not only benefit domestic producers but also enhance the economic and effective use of the fossil fuel. High mining costs force coal producers to revise up selling prices.
In response to Vinacomin’s request, Minister of Industry and Trade, Vu Huy Hoang, agreed on solutions proposed by the coalmining group while reminding it of the successful implementation of the safety - renovation - sustainable development objectives.
Minister Hoang noted that, in 2011, the Government will direct the Ministry of Industry and Trade and the Ministry of Finance to study and build market-based pricing plans, which were initiated and approved long ago but lacked concrete implementation roadmap. In 2010, as the Government advocated to control inflation and stabilise the market, many important commodities, including coal, were not allowed to increase prices as scheduled.
Huong Ly
Vietnamese
