Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin) has officially proposed the Ministry of Finance (MoF) and the Ministry of Industry and Trade (MoIT) to raise selling coal price sold to Vietnam Electricity Group (EVN).
Vinacomin also suggested MoF and MoIT to cut the coal export tax and a number of measures to mobilize foreign capital.
The information was provided at the Vinacomin’s conference on its measures to cut expenses and restructure business in 2012 following the Government’s Decision No.01/NQ-CP, which was held on Wednesday Feb 22th, 2012.
According to the executives of Vinacomin, electricity prices were raised by 15.28% from March 1st, 2011 while the coal prices for electricity rose only 5%. Selling coal prices for electricity only equal to 57-63% of coal production costs in 2010 (the audited result) or 51-55% of planned production costs in 2011, resulting a loss of VND3 trillion in 2010 and VND5 Trillion in 2011 from selling coal for electricity. This causes interest reduction and investment capital shortage for the coal industry. If the Government does not gradually raise the coal prices for electricity, it will cause pressure for the coming year and it is harder to adjust.
Therefore, the corporation has sent its official document to MoF, MoIT proposing to raise the coal prices following road map which ensure the coal prices for electricity to meet the production costs in 2012 and then to catch the market prices.
Concerning electricity prices for EVN, Vinacomin suggested to increase its selling electricity prices for EVN equaling to input prices.
Vinacomin also proposed MoF, MoIT to consider and present the Prime Minister to cut the coal export tax to 10% from current 20% to offset its high input costs in 2011 and create fund for reinvestment, development new mines to increase coal output and meet the economy’s demand.
In addition, the Group also suggested to get input value added tax (VAT) refund for export coals to limit coal price hike that affects the group’s finance balance.
Vinacomin also proposed to cut alumina export tax to 0% because this is processed product from fine aluminum ore which request the high technique and capital investment.
The Group suggested Government to allow it to call for international long loans (ADB, NIB, WB) which are 10 years or longer loans to invest in new coal mines. Vinacomin proposed the government to allow it to use coal resources as gurantee to call for these international loans (pillotproject).
Source TEI/StoxPlus
