Coal Prices to Increase by 6 per cent in 2007

 Coal prices in Vietnam are scheduled to increase by around 6 per cent next year, according to the Ministry of Finance, after the coal industry decided to raise the charges on three big consumers (cement, fertilizer and fertilizer industries) by over 20 per cent on average.   

 

The ministry said that from the third quarter of 2007, coal prices for electricity production would be roughly equal to prices for the three big consumers, set to follow market prices. 

 

Specifically, coal sold to fertilizer production will be priced at VND970,000 per ton, for nitrogenous fertilizer production VND385,000/ton, for cement making VND550,000/ton and for paper production VND430,000 per ton.

 

Vinacomin said it is selling coal to large consumers at prices below production costs. Domestic coal prices are now only 40 per cent of the world price. It, therefore, is always compensated for losses.

 

In 2004, the group got government subsidies worth VND450 billion ($28.13 million) to compensate its losses, in 2005, VND750 billion ($46.88 million) and in 2006 the figure is estimated to reach VND1 trillion ($62.5 million), it said.