Vinacomin hikes coal prices

Effective from March 1, the prices of two regular types of coal were hiked by 5 per cent, with coal dust No4 rising to VND648,400 VND ($31) per tonne and reaching VND520,000 ($25) per tonne of coal dust No 5.

Prices for two new products, coal dust No6a and No6b, were set at VND450,000 ($21.7) and VND 395,000 ($19) per tonne, respectively, not including Value Added Tax.

Deputy general director of Vinacomin Nguyen Van Hai said the hike was calculated based on an agreement between Vinacomin and EVN under the guidelines of Circular 05/2011 TT-BCT on electricity prices issued by the Ministry of Industry and Trade last month.

The price increase followed the market mechanism which allows Vinacomin to cut losses, Hai said. However, it would only offset around 63 per cent to 68 per cent of the current product costs.

He also revealed that Vinacomin was planning to hike coal prices to other industries including cement, fertiliser and paper with a minimum increase of 9 per cent of export product prices.

This year, the group aims to sell 44 million tonnes of coal products including 27.5 million tonnes to the domestic market.

Vinacomin aims to continue to boost capacity by investing in its existing coal mines.

In another move, the group has recently submitted a report to the Prime Minister on its decision to discontinue contributing capital to enterprises operating in the finance, banking, securities, insurance and real estate sectors.

Hai said that his corporation now aims at specialising in coal, electricity, minerals, coal mining equipment and chemicals industries only.

Specifically, Vinacomin will not follow through on its contributions to any businesses that it has made a promise for committed or registered capital.

The corporation plans to withdraw funds from companies to which it has already contributed capital at an appropriate time to ensure the businesses have secured alternative capital.

Currently, Vinacomin has 66 subsidiaries including 22 limited liabilities companies, 35 joint stock companies, 4 foreign companies and 5 administrative units. Up to now, it has invested in several projects in finance, banking, securities, insurance and real estate.

From 2011 onwards, the group will continue to equitise some limited liability companies that fall outside the coal mining sector and reduce its number of controlling shares in several subsidiaries operating in sectors such as trade, tourism and information technology in order to recover capital to, in turn, invest in coal mining and processing projects.