Sell coal stockpile, cut rates: PM to Vinacomin

A worker of the Vietnam National Coal and Mineral Industries Group’ controls a production line. - VNA/VNS Photo Minh Đức

At a meeting with Vinacomin on Monday, the working group, appointed by the Prime Minister, said it is very important to resolve the stockpile as Vinacomin’s growth contributes significantly to the country’s overall economic growth.

To meet the GDP growth target of 6.7 per cent in 2017, the Government wants to boost the growth of the oil, gas and mining sectors.

At the meeting, Mai Tiến Dũng, head of the working group, minister and chairman of the Government Office, said that the PM wants Vinacomin to pay attention to five issues closely related to the group’s operations and the overall economic growth target of the country.

Foremost, Phúc wants Vinacomin to deal with its stockpile of nine million tonnes of coal. “This is the biggest obstacle in the way of Vinacomin’s growth and business efficiency,” said Dũng.

Secondly, the PM has asked the group to draw up measures and propose policies to the Government to cut prices so that Vietnamese coal can compete against imported coal. Currently, import coal (coded 4B) is priced at roughly VNĐ1.5-1.6 million (US$66.6-71.1) per tonne, but the same Vietnamese coal is roughly VNĐ2 million per tonne.

“If we do not handle it well, there will be huge competition pressure. This requires Vinacomin to put more efforts into restructuring, revamping and reducing costs,” Dũng said.

Thirdly, Vinacomin must improve its investment efficiency by speeding up profitable projects, and closely supervising projects that are going slow.

The PM also wants Vinacomin to actively work with provincial authorities to fight against illegal coal exploitation and smuggling.

Finally, PM Phúc has ordered the company to further restructure and divest from its non-core businesses. It must pay more attention to processed products with high value-adds instead of only trying to increase output, according to Dũng. Rising output must go hand in hand with effectiveness and value.

Dũng said that Vinacomin is a strong economic group and plays an important role in ensuring national energy security. So far this year, the corporation has made successful changes, which have contributed to its notable turnover and profits.

Vinacomin has produced 18.3 million tonnes of coal in the first six months, increasing 5 per cent year on year and meeting 54 per cent of the annual target. Of the total, 686,000 tonnes of coal have been exported.

With the sale of 18 million tonnes of coal in the first half of the year, up 2 per cent year on year, the group has met half of its annual target.

Vinacomin has posted a turnover and profit of roughly VNĐ53.3 trillion ($2.3 billion) and VNĐ1 trillion ($44 million), respectively in the first six months, up 10 per cent year on year. It has contributed VNĐ6.3 trillion to the State budget and generated jobs for around 110,000 workers in this period. It is estimated that Vinacomin will fetch a profit of around VNĐ2 trillion in 2017, up VNĐ1 trillion against last year.

Reports from the Ministry of Finance also reveal that Vinacomin’s achievements are impressive in the first half of 2017, especially its bauxite aluminium project in the Central Highlands province of Lâm Đồng, which has made a profit of VNĐ50 billion in the first six months, after three consecutive years of losses.