HA NOI — The Viet Nam National Coal and Mineral Industries (Vinacomin) Group proposed again yesterday that the Government approve higher prices for coal used in electricity production.
Last year, the group sought an increase of 10-15 per cent but an increase of just 5 per cent was approved. Meanwhile, effective March 1, electrical rates will increase by an average of 15.28 per cent. Coal currently constitutes an estimated 51-55 per cent of the costs of generating electricity.
Vinacomin says that coal is sold to power plants below production costs, causing the mining industry losses of VND3 trillion (US$143 million) in 2010 and VND5 trillion ($238 million) in 2011.
Vinacomin general director Le Minh Chuan told online newswebsite Vietnamplus that Vinacom would continue urging the Government to set coal prices in accordance with market forces in an attempt to ensure the group's profitability.
The group has also petitioned for a reduction in export tax rates applied to coal from the current 20 per cent to 10 per cent, as the profits from coal exports allow it to invest in new mining projects, as well as help offset losses on the domestic market and rising production costs.
Vinacomin is also seeking Government approval for its proposal to look for long-term financing from foreign creditors to develop new mines and raise capital.
Vinacomin has targeted production of 45.5 million tonnes of coal this year, a million tonnes higher than last year, and has projected earnings of VND96.3 trillion ($4.58 billion).
Top priority this year will be given to hastening the implementation of key mining projects, mobilising capital from various resources, and reducing State-funded capital expenditures, said Chuan. — VNS