HANOI – The Vietnam National Coal and Mineral Industries Group (Vinacomin) is seeking approval from the Prime Minister to halve the coal export tariff to 10% in 2012 after it has got the green light from the Ministry of Finance.
Vinacomin insists on coal export tariff cut
By Tu Hoang - The Saigon Times Daily
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| Vinacomin’s coal mining in the country’s north. Vinacomin is asking the Prime Minister for a coal export tariff reduction to 10% in 2012 following the green light from the Ministry of Finance - Photo: TTXVN |
HANOI – The Vietnam National Coal and Mineral Industries Group (Vinacomin) is seeking approval from the Prime Minister to halve the coal export tariff to 10% in 2012 after it has got the green light from the Ministry of Finance.
This is the latest move of Vinacomin after its first effort to have the coal export tax lowered to 0% from the present 20% was rejected by the Prime Minister early this month.
In the petition submitted to the Prime Minister this time, the group’s general director Le Minh Chuan listed multiple difficulties his company has been encountering in domestic and foreign markets.
Total coal volume of Vinacomin sold in January-June only reached 19.7 million tons, equivalent to 43% of the 2012 target but down 13% year-on-year. Local coal consumption stayed at 12.8 million tons, accounting for 41% of the year’s plan but plunging 12% from the year-ago period.
Chuan stressed local coal exporters are in the fierce competition with foreign rivals while global coal prices have tumbled by up to 25-40% against end-2011. The group in the year’s first half only shipped abroad 6.9 million tons, 47% of the target and down by 15% over the same period last year, he noted.
In the first five months, Vinacomin exported only 1.5 million tons a month on average, but the volume plunged in June to merely one million tons and as of the middle of this month, only 250,000 tons was shipped abroad by the group. Now Vinacomin has received no new orders from foreign buyers, Chuan said.
Vinacomin said it has to offset losses of Vietnam Electricity Group (EVN) amounting to over VND8 trillion. Vinacomin said its exports sales of the whole year might shrink by an estimated VND4 trillion while input costs are forecast to go up by about VND2.2 trillion due to high lending rates and the environmental tax.
Vinacomin confirmed to the Prime Minister in its submission that it will be unable to earn profits this year given the aforesaid problems.
“Vinacomin’s coal export in the last six months can hardly inch up if the situation remains unchanged. After paying the export tax, we can neither cover expenses nor boost exports at the Prime Minister’s request,” Chuan noted in the petition.
Late last month Vinacomin had proposed the Government cut the export tax to 0%. However, the Government Office announced the Prime Minister’s rejection of Vinacomin’s request.
According to the office, the Prime Minister had asked Vinacomin to seek ways to streamline production activities and slash input costs as well as minimize exports. The Prime Minister had also allowed the group to raise coal prices for power plants step-by-step in line with the roadmap to hike electricity prices, the office said.