Vinacomin with Long-term Vision

In the first nine months of 2012, Vinacomin produced 33.2 million tonnes of coal, fulfilling 67.8 per cent of the full-plan year and shrinking 6.8 per cent from the same period of last year. Revenues were estimated at VND60.4 trillion, equal 63 per cent of the yearly plan and 80 per cent of the same period in 2011. Average monthly income was approximately VND7 million.

 

At the cabinet meeting on Vinacomin’s production, business, finance and restructuring activities, Prime Minister Nguyen Tan Dung hailed the efforts of Vinacomin Group and workers, especially coalminers who have to work hard in risky and dangerous conditions. In the past years, in spite of difficulties in production and business activities, the group’s revenues, State equity and profits still increased. Rapid-growing production meets domestic and export demand, helping the country boost macroeconomic stability, guarantee energy security, improve material and spiritual life of staff members, and ensure environmental safety. The group is a pioneer in applying advanced sciences and technologies to production, especially open-cast coal mining, renovating and enhancing corporate governance, improving labour productivity, preventing accidents; and gradually bringing illegal coalmining to an end.

 

The group’s mineral production is developing on the right track and gradually going into the depth of the industry. It also expands Sin Quyen copper project and Thai Nguyen zinc project among others. Its mine engineering companies and industrial explosive companies are operating very well. Its power plants are increasing the value of coal and helping with the formation of a competitive electricity market.

 

Vinacomin is focusing on core business lines and ensuring sufficient coal production and import for the country. According to the guidance of the Prime Minister, the group must calculate and reorganise production; and restrict exports unless they are used in a large volume and of high value. Electricity production must be strictly in compliance with the approved scheme. The group will consider holding percentages in mechanical companies, even dissolving underperforming ones. However, the group will maintain all industrial explosive companies and focus on improving product quality. Mine construction must be strongly consolidated and highly professionalised. The group will divest in other businesses. On that direction, Vinacomin has rebuilt its production and business plans to 2015, and further to 2020.

The Government allowed Vinacomin to make gradual rises in coal-selling prices applied to power production so selling prices are lower than production costs to ensure sustainable investment sources for restoring, upgrading and expanding the capacity of existing mines and building new ones to meet the growing demand in the coming years and rationalise energy consumption.

 

Vinacomin made specific calculations of coal supply and demand in the 2011-2015 period in the Vietnamese coal industry development plan towards 2020, with the perspective to 2030, approved by the Prime Minister. In 2012, the group will base on real coal output and domestic consumption to make adjustments to export volume.

Coal export taxes will not be changed in the near term, as the job requires meticulous calculations and studies. The Ministry of Finance will consider exempting import duties for equipment and materials for the installation of alumina plants in Tan Rai bauxite aluminium project in Lam Dong province. Environmental protection loyalties on alumina products will be applied at the lowest level. Export taxes will not be levied on alumina products while the two plants are being commissioned.

 

In the coming time, Vinacomin will work with banks and credit institutions to raise funds for new coal mine projects. In addition, the group will continue exploring coal in the Red River Delta.