The Viet Nam National Coal, Mineral Industries Holding Corporation (Vinacomin) has petitioned the Government to reduced the coal export tax from 20 to 10 per cent this year to help the corporation avoid further losses.
HA NOI —
|A conveyor belt transports coal at the Viet Nam National Coal, Mineral Industries Corporation. The company has asked the Government to reduce export taxes to avoid losses. — VNA/VNS Photo Minh Dong |
As of last month, coal stockpiles had reached 8.5 million tonnes, according to Nguyen Van Bien, deputy general director of Vinacomin. Despite this, Bien said Vinacomin had incurred losses of VND8 trillion (US$380 million) every year on average for several years, because it sells coal for power production at below market prices under a Government subsidy programme.
Importers still wanted to buy coal from Viet Nam but offered buying prices lower than the production cost, said Bien. "As a result, Vinacomin dare not continue signing new export contracts because we're afraid of suffering further losses," said Bien.
In the first half of 2012, Vinacomin exported nearly 7 million tonnes of coal. But so far this month, it has exported only 250,000 tonnes of coal and has no more export orders.
"We anticipate that coal shipments in the remaining months of the year are likely to be low," Bien said.
He said one tonne of coal for export is subjected to many taxes, including valued added tax, natural resources tax, environment tax and exploration tax, which substantially inflate coal prices and make it extremely difficult to earn a profit.
Bien said Vinacomin wanted the Government to reduce the export tax by half to boost the coal sector. He said this could be a temporary measure that was still in line with the country's strategy to gradually minimise coal exports.
Viet Nam plans to gradually cut down on coal exports as local demand surges and supply declines. The Government policy is to ensure sufficient coal supply for the country, especially for the power sector. —VNS