The volumes of raw iron ore illegally exported to China have been on the rise since 2013, hugely affecting taxes collected in Vietnam, the head of a local metallurgy association warned Friday.

More and more iron ore has been illicitly brought to China after Vietnam banned exports of all raw metal ore and hiked the export tariff on iron ore to 40 percent, Pham Chi Cuong, chairman of the Vietnam Foundry and Metallurgy Science and Technology Association, said.

In 2013 around 1.25 million tons of iron ore were officially exported to China at US$48.72 a ton, according to customs data.

But figures from Chinese customs show that 4.5 million tons of ore have been imported from the Southeast Asian country at an average of $84.75 million a ton.

“This represents a 3.1 ton gap in volume, and $36.08 a ton in value, between the two sets of data,” Cuong said.

The disparities cost Vietnam’s state budget more than VND3 trillion ($141.2 million), as duties including natural resources, environment protection, and road maintenance taxes were not collected, Cuong said, citing analysts.

Vietnam also incurred a loss of more than VND500 billion a year in collecting the export tariff on the officially exported iron ore, as the export price declared with customs was only half of the real price sold to Chinese importers, which was $48.72 compared to $84.75 a ton.

Cuong pointed a finger at the loose management of the iron ore import and export activities.

“Many mining companies have managed to illicitly export the ore to rake in profits illegally,” he said.

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