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Vietnam’s coal giant cries for help as unsold stock nears 10mn tons

Wednesday, June 21, 2017, 19:17 GMT+7
Vietnam’s coal giant cries for help as unsold stock nears 10mn tons
Vinacomin employees are seen at a company coal site.

Vietnam’s biggest coal and mineral enterprise has called on the government to offer preferential treatment to clear its massive unsold inventory, but was told to find thorough solutions to its own problems instead of crying for help.

State-run Vinacomin currently has 9.3 million metric tons of coal in unsold stock, and the problem will worsen as one of its biggest buyers, Vietnam Electricity (EVN), has plans to cut its order by two million tons this year.

The coal giant lamented at a meeting with a working team of the government in Hanoi on Monday that the order reduction from EVN could see some 4,000 Vinacomin employees lose their jobs.

Turning to Minister Mai Tien Dung, chairman of the Government Office, Vinacomin general director Dang Thanh Hai suggested that the government “mandate that EVN, as well as PetroVietnam, buy coal exclusively from Vinacomin.”

Hai also called on the government to issue a policy prioritizing the usage of domestically produced coal plus tax incentives to help the state-run coal company clear its unsold stock.

“Vinacomin should be allowed to export without a quota,” the general director said.

Responding to the cry for help of Vinacomin, Minsiter Dung said that on the one hand, the government would consider suitable policies to help Vinacomin with its huge unsold inventory.

“On the other hand, the company has to exert efforts to enhance its administrative management, reduce production costs and increase its productivity in order to boost economic effectiveness,” the Government Office chairman underlined.

Vinacomin reported VND53.53 trillion (US$2.36 billion) in Jan-June revenue, completing 50 percent of its full-year target.

The coal producer is expected to enjoy VND1 trillion ($44.05 million) in profit this year, contributing some VND6.3 trillion ($277.53 million) to the state budget.

Vinacomin has invested a combined VND198 trillion ($8.72 billion) in some 450 projects, with Minister Dung requesting that those investments be reviewed for efficiency.

“Vinacomin should focus on its restructuring process and developing effective business and investment plans to enhance itself,” the minister concluded.

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