Coal Industry Strives to Reach Target in Q4

The Vietnam National Coal, Mineral Industries Holding Corporation Limited (Vinacomin) said it sold 28.15 million tonnes of coal and earned revenue of VND66,521 billion (US$3.3 billion) in the first nine months of 2013, equal to 64 percent of the full-year plan and 100 percent of the performance in the same period of last year. Coal sales grossed VND37,681 billion in the reporting period, equal to 62 percent of the yearly plan and down 10 percent from the same period of 2012. Major buyers included power and cement industries. Coal sold to the electricity industry reached 10.5 million tonnes, or 74 percent of the annual plan.

 

These modest figures show the under-performance of the coal industry. In their explanatory reports concerning their profit decline from the same period last year, Vinacomin’s member companies pointed to lower coal selling prices than planned prices in 2013. Coal prices were revised down by 7-10 percent. Non-coal revenues also plummeted on slow sales. In addition, Vinacomin’s coal price cut of 7-9 percent in 2013 also caused net profit of its member companies to shrink sharply. Coal price reduction resulted from a steep price decline of coal exported to China - the major importer of Vietnam’s fossil fuel, thus bringing about a surge in coal inventories in the first nine months.

 

The group anticipated continued hardships in the fourth quarter of 2013, although weather conditions are more favourable, export tax has been brought down to 10 percent and the domestic demand would increase. Vinacomin forecast export at 3.3 million tonnes of coal and domestic consumption at 7.5 million tonnes in the fourth quarter.

Anticipating rising demand in 2014, Vinacomin will boost its production, expand exportation, enhance labour productivity and lower prices.

 

Accordingly, Vinacomin will continue to increase production output in the event of stronger demand, reduce production costs, invest in new coal mines to raise production capacity and better manage resources. It will try not to let the restructuring process reduce the autonomy of its member companies, improve labour safety, and stabilise employment for workers.