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Coal industry faces difficulties in H1

Update: July, 16/2015 - 08:30
In the third quarter, Vinacomin plans to sell 7.8 million tonnes of coal, including 7.55 million tonnes to local customers and 250,000 tonnes in exports. — VNA/VNS Photo Trong Dat
QUANG NINH  (VNS) — The domestic coal industry has been facing a difficult business environment, which caused a build-up of large coal inventories in the first half of this year.

Consumption of coal in the first half of the year reached 18 million tonnes or 97.2 per cent of the consumption during the same period last year, according to the Viet Nam National Coal and Minerals Industries Group (Vinacomin). The export volume stood at 704,000 tonnes or 18 per cent of the export volume for the first half of last year, Vinacomin reported during its conference to review production and trade in the first six months of this year, in Quang Ninh Province yesterday.

Domestic consumption fell partly because some cement producers did not buy coal from the group as contracted, and also because of temporary stoppage of coal deliveries to customers who had not completed payment of old dues, Vinacomin said.

In the third quarter, Vinacomin plans to sell 7.8 million tonnes of coal, including 7.55 million tonnes to local customers and 250,000 tonnes in exports. The group expects coal consumption during the entire year to reach 35-36 million tonnes.

To achieve the target, the group will follow market developments and be more flexible in its management of production and trade. It will also change the way it sells coal to meet the market demand, the group said.

Last month, the Ministry of Trade and Industry asked the government to allow coal exports to solve the problem of large coal inventories in the first half of this year. For a period, the government had limited coal exports as it needed to ensure enough coal supply for electricity generation.

Early this month, the government approved a proposal from the ministry to allow export of 2 million tonnes of coal this year. Vinacomin and the Dong Bac Corporation of the Ministry of Defence are two of the enterprises that have permission to export coal.

Tran Viet Ngai, chairman of the Viet Nam Energy Association, said local coal consumption had posed difficulties for the domestic coal industry, so the government was right in giving permission to export coal because keeping the coal in inventories for a long time would reduce its quality, the Hai Quan online newspaper reported.

Nguyen Manh Diep, head of Vinacomin's Coal Business Division, said 2 million tonnes of coal would be exported to Japan, Europe, South Korea, Thailand and Taiwan for chemical and metallurgical industries. — VNS

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