Old technology obstructing coal production plans: official

A crane works at the Na Duong coal mine, Lang Son Province. The coal industry must invest up to US$904 million to complete production plans on schedule, according to Nguyen Van Bien, Deputy General Director of the Viet Nam National Coal-Mineral Industries Group. VNA/VNS Photo Trong Dat.

He said that the projects lagged behind schedule because the old mines were becoming deeper and more difficult to exploit while the group was slow in exploring and building mines with more advanced technology.

He added that investment in the coal industry was limited because coal products were sold cheaper than the selling price to part of the population. The industry had made low profits since 2012, when the economy started going down.

Taxes were also a problem for the industry, Bien said. The Government raised coal-production taxes to 13 or 14 per cent of the selling price, 10 times higher than in 2007. The tax that Vinacomin paid in 2014 for exploiting coal and authorising other organisations to mine coal increased by VND2 trillion ($95 million) over last year.

Vinacomin's Deputy General Director said the Government should reduce taxes and resolve problems regarding capital and procedures to support the industry to improve working conditions and income for miners as well as production efficiency.

He also said that Vinacomin would increase the use of machines in coal mining to improve productivity and reduce prices to meet growing demand.

Nguyen Van Bien reported that the industry had raised its production by seven times during the last 20 years. Vinacomin itself increased productivity by four times since 2005 and produced 40 million tonnes of coal each year since 2011.

However, coal exports decreased from 18.7 million tonnes in 2010 to 6.5 million tonnes in 2014, including 6 million tonnes of coal exported by Vinacomin. In 2015, Vinacomin would continue to reduce coal exports to 2 million tonnes, he said.

Coal imports had become necessary because the industry could only meet two-thirds of market demand, even when productivity was maximised and new mines were built.

The industry would import a few hundred thousand tonnes of coal to produce construction materials and operate factories in 2015, he said. Additionally, 3-5 million tonnes of coal would be imported for thermal power projects in accordance with their progress from 2016 onwards.

Vinacomin would also explore the Northeast Coal Basin, which covers Quang Ninh, Bac Giang and Hai Duong provinces, and study the Red River Delta Region and other regions where the coal quality was good.