Wednesday, June 3 2020


Mineral exploitation comes at a cost

Update: June, 09/2015 - 09:22
Bac Ninh marine transport police inspect a sand barge on Cau River.— VNA/VNS Photo Thai Hung
HA NOI (VNS) — Mining operations in Viet Nam are mired in serious problems including wastage, corruption, environmental damage and inadequate contribution to the State Budget, officials say.

A Tin Tuc newspaper report yesterday cited them as saying the sector contributes significant revenue to the State Budget but this is not commensurate with the scale of operations.

The report cited management deficiencies including a lack of transparency that have led to waste of resources, losses to the State Budget and corruption in exploitation.

The central province of Binh Thuan is recognised as a region rich in resources with 211 areas identified for exploitation of titanium, sand, stone for construction and other minerals.

However, managing the exploitation of mineral resources has proven a very difficult task.

The report quoted Le Dac Lam, a National Assembly deputy from the province, as saying: "Many mining companies fail to declare their real production capacity in order to reap illegal gains, leading to the loss of State revenues.

The surrounding environment is not cleaned up after exploitation, leading to pollution of land and water resources, Lam said.

Similar situations exist in many other localities, the report said.

It cited Nguyen Van Thuan, director of the General Department of Geology an Minerals of Viet Nam, as saying around 200 mining licences have been issued, but tax collection from the sector is not even enough to meet management activities.

The paradox is that mineral production is high, but contribution to the State budge is low, he noted.

Natural resource tax revenues accounted for just 0.9 to 1.1 per cent of the State budget in 2011-13. This does not match the level of exploitation, mining management costs, and social and environmental impacts, the report said.

Dau Anh Tuan, head of the legal department of Viet Nam Chamber of Commerce and Industry, said a recent survey of nearly 10,000 enterprises showed that profitable mining firms have reduced from 75.8 per cent in 2006 to 56.5 per cent in 2011, while failures in mining operations increased from 18.8 per cent to 35.5 per cent.

Real figures?

The survey also found that mining businesses want to expand operations despite economic failures, prompting Tuan to wonder if real figures were being revealed by the survey on profits from mining activities.

The lack of co-ordination between agencies covering finance, land management, environmental protection and mineral resource exploitation has been blamed for losses to the State Budget, Tuan said.

Furthermore, there are no specific technological guidelines on restoring the environment after mining activities.

Tran Thanh Thuy, co-ordinator of Minerals Alliance, said mining management was mainly based on data submitted by companies, and illegal exploitation was happening in many areas.

This has created inequality between businesses and loss of revenues for the State, but the worst affected were residents around mining areas, Thuy said.

The report said experts were worried that Viet Nam will exhaust many of its mineral resources in the near future.

Thuy said Viet Nam should join the Extractive Industries Transparency Initiative (EITI) and derive basic benefits from this membership: increased Budget revenues, investor trust, competitive businesses; and minimise conflicts of interest in mining operations. — VNS

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