Vinacomin wants better price of coal for power plants

By Van Nam

The Saigon Times Daily

February 9, 2012

Page 2

Vinacomin will propose hiking coal prices for the power industry as the prices of coal sold to power plants is now equal to only 60 to 70% of the production costs.

Bui Van Khich, deputy general director of Vinacomin, told the Daily that the production cost of coal now reaches VND1 million per ton, while coal is now sold to electricity generators at a mere VND600,000 a ton after several price hikes.

The cheap coal supply cause many difficulties for Vinacomin in correcting its financial balance and implementing coal project. The government has earlier approved the policy to gradually adjust the domestic coal price in accordance with the market mechanism to generate profits for reinvestment.

“There must be another coal price hike in 2012. Last year we suggested an increase of 10-15% and the level of 5% was approved. We will continue to make proposals this year, and another hike of 30-40% is necessary to offset production cost,” Khich said.

According to a report of the Ministry of Industry and Trade, coal consumption in January amounted to 2.8 million tons, a drop of 10.8% year-on-year. Vinacomin expected to export some 13.5 million tons of coal in 2012 at the average price of US$100 per ton, and planned to steadily reduce the export volume in the following years.

Khich explained if coal prices for power production were not revised up this year, Vinacomin would run into more difficulties in its financial balance. He added EVN still owes Vinacomin some VND1 trillion for power supply an coal supply for electricity generation.

Regarding the project to construct a coal transshipment port in the southern region, Vinacomin said it is working with a  foreign consultancy group on surveying a location for the project and will send a report to the Government this month.

The amount of imported coal from now to 2015 is estimated at over 40 million tons per year; and will jump to 200 million tons in 2020. The thermal power plants in the Mekong Delta will import some 15 million tons a year, while other thermal power centers like Van Phong, Vinh Tan and Son My will need 6-13 million tons of imported coal every year.

Source: http://english.thesaigontimes.vn/Home/business/other/21721/

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