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Power producers may pay more for coal

Update: April, 16/2013 - 10:39
Workers fix power connections on pylons at the Phu My Thermo-electric Centre in Ba Ria-Vung Tau Province. The Viet Nam Coal and Mineral Industries Group (Vinacomin) has asked the Government to increase the price of coal sold to power producers because coal is selling for less than it costs to produce. — VNA/VNS Photo Ngoc Ha

HA NOI (VNS) — The Viet Nam Coal and Mineral Industries Group (Vinacomin) has asked the Government to increase the price of coal sold to power producers, saying that the group is facing difficulties because coal is selling for less than it costs to produce.

However, experts have expressed concern about such a proposal made last week.

If the coal price increased, the power industry would surely ask for a price hike as well – causing inflation, said economist Le Dang Doanh.

But Nguyen Van Bien, deputy general director of Vinacomin, argued that the coal industry was in particularly dire straits, as the volume of coal sold to the power industry this year had been rising significantly. Last year, coal sold for electricity generation accounted for 10-15 per cent of coal sales; and that figure rose to more than 50 per cent in this year's first quarter.

Moreover, the mining industry faced major difficulties due to the steep decrease in exports. In previous years, coal producers could use the export value to offset their domestic losses. But this year, both coal export value and volume declined sharply, causing the export price to fall by roughly 30 per cent. Economist Nguyen Minh Phong said that because the Government sought to bring prices of all commodities in accordance with the market price, a coal price hike was necessary, but transparent audits should be conducted so the public could see whether the coal industry was making a profit.

The industry's high production costs and low labour productivity resulted from its failure to broadly implement modern technology, said Tran Viet Ngai, chairman of the Viet Nam Power Association. — VNS


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