Despite the efforts of maintaining stable production and securing jobs and income for workers, the decline in the market price and consumption resulted in a drop in revenue, reaching VND200 billion of the coal industry in the first 7 months of 2016.
Mr Le Minh Chuan, Chairman of Vietnam National Coal - Mineral Industries Holding Corporation Limited (Vinacomin), said that in July 2016, even though the sales volume was quite good, the profit of the coal industry was declining due to many reasons. The main reason is due to increasing environmental costs of the mining industry and the high proportion of pit coal. The current mineral price almost hit bottom, while the taxes and fees increase.
Some coal consumers did not purchase the full amount of coal as signed under the contracts, while due to declining outputs, some fertilizer factories have reduced their coal consumption.
The declining coal have come while the demands for funding of the group is higher, especially low amount of deep pit coal, rising investment rates and large amount of existing coals. This causes imbalance. Existing mines are down to 300 metres in depth while the rate of coals is 50 per cent-60 per cent higher than the deep pit coal. The open-pit coal mining, rock and soil grow rapidly, strengthening the competitiveness of the coal of Vietnam.
In face of such the adverse situations, Vinacomin has adopted many measures including continuously reducing costs, the restructuring of the business production and coals produced based on the market demand, and cut production volume. Due to the fact that the coal price is low so despite the coal output by 97 per cent consumption over the same period, the revenue fell more than the same period, causing a large impact on its balance of the Vinacomin. However, Vinacomin has tried to ensure jobs and income for workers.
On the other hand, the coal price has risen, along with high taxes and fees of 25 per cent of the cost, leading to tougher competitiveness in the coal industry. Since July 1, taxes on coal have increased by 3 per cent; therefore, the coal industry has proposed decreasing taxes and fees to remove difficulties. Also, Vinacomin has also made many suggestions and proposals related to the implementation of restructuring and divestment of a number of areas, provisions of research, survey and licensing activities, and execution of some projects to guarantee for the urgent projects. In particular, the proposals have special mechanisms to ensure urgent investment projects.
Vinacomin has also recommended the Government direct the units to use coal for electricity of the agreement signed with the Vinacomin, in accordance with Directive 21 CT-TTg of the Prime Minister that the Ministry of Industry and Trade approve coal charts for producing electricity from domestic coal by the Vinacomin under the direction of the Vietnam Electricity Group and Petrol Vietnam.
In the last 5 months of the year, the Vinacomin will continue to reduce costs, manage investment and promote consumption of the products as the market flourishes to ensure stable profit and income for its 120,000 workers and employees.
Huong Giang
Vietnamese
