Vinacomin's coal sales below target below target
Vinacomin's coal sales below target below target
Vinacomin Group, the State-owned mining giant, expects to sell 8 million tonnes of coal in the final two months the year, with the group's member companies expected to co-ordinate production and shipping in order to reach the goal.
However, total coal consumption this year was predicted to reach only 39 million tonnes, well below the 45.5 million tonnes targeted earlier in the year, the group admitted.
According to Ministry of Industry and Trade figures, Vinacomin sold 30.7 million tonnes of coal in the first 10 months this year, 10.6 million tonnes of which was exported.
Export volume has failed to increase due to strong competition from other regional producers, including Australia and Indonesia, while domestic demand in the first 10 months also declined by 13 per cent against the same period last year, the group said.
Electricity of Viet Nam (EVN) reduced its coal buy from Vinacomin from VND600 billion (US$28.6 million) to VND550 billion ($26.2 million), and the electricity producer's coal purchases in the last two months of the year were not expected to exceed about VND300 billion ($14.3 million).
To help boost demand, the Government approved Vina-comin's proposal last month to reduce the export tax rate for coal from 20 per cent to 10 per cent.
Over the next three years, the industry continued to expect a growth in demand. The Viet Nam Energy Association said that production would need to increase by 20 million tonnes to meet domestic demand of 55 million tonnes in 2015. This would require building 10 new mines with an average yearly output of 2-2.5 million tonnes each.
The Government has alread approved a plan to build 28 new mines. Under the plan, each would require $300-350 million to develop over a period of 6-7 years. This would require investment of $3.5 billion to develop just 10 new mines, the association said.
Meanwhile, even as export prices have declined 24-36 per cent, the domestic coal price has continued to be cost-controlled, resulting in losses to Vinacomin and the industry, which lacked the financial capacity to invest or attract investment into the development of new mines.
Vinacomin was therefore projecting a domestic coal shortage by 2015 that were further cut export revenues and the group's financial stability.
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