Shocking illegal mineral exports to China

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The study of iron ore exports, according to Vietnam Steel Association (VSA) chairman Pham Chi Cuong, pulled together statistical data from relevant agencies in both countries—and revealed large discrepancies in the respective data.  

Particularly, in 2011 Vietnam reported iron ore export volume to China at  1.34 million tonnes at an average price of $52 per tonne. However, statistical figures from China side set iron ore import volume from Vietnam was 2.89 million tonnes at an average unit rate of $106 per tonne.

In 2012, Instruction 02/CT-TTg demanded a halt in iron ore exports and effectively tapping Thach Khe ore mine in north-central Ha Tinh province and other mining projects serving local steel manufacturing plants.

Under this orientation, ore export volume fell sharply. Only 0.0236 million tonnes were exported to China at an average price at $46 per tonne. However, the China side reported a respective figure of 1.748 million tonnes at an average unit rate of $92 per tonne.

The report then commented there was a huge illegally exported ore volume which exceeded 3.2 million tonnes in the two-year period of 2011 and 2012, in addition to a drastic price disparity.

“This has led to remarkable losses in taxes for Vietnam,” the report noted.

Accordingly, in 2011 the difference in the export volume was 1.55 million tonnes costing VND3.444 trillion or $164 million, based on import side’s unit rate $106 per tonne.

Moreover, this 1.55 million tonnes disparity would incur VND1.780 trillion ($84.7 million) worth in taxes and fees as per existing regulations.

Similarly, the state coffers would get around VND1.78 trillion ($84 million) in taxes and fees additionally from 1.7 million tonne disparity in ore export volume in 2012.

This is irrespective of other tax lines and obligations export businesses incur if they made adequate declarations.

The report also read that ore exports took place mainly in some northern border provinces, particularly Phu Tho, Hai Duong, Haiphong and Quang Ninh involving huge numbers of trucks and ships.

“VSA has sent the report to competent government agencies for check and if it was a fact of life, the state needs to take actions,” said Cuong. He noted that the VSA had proposed the government ban ore exports to save materials for domestic production.