The Vietnam Coal and Mineral Industries Group (Vinacomin) has submitted a proposal to the Government to increase coal prices for the country’s four largest coal consumers as of early next year. In the wake of an instruction from the Prime Minister and the Ministry of Finance, coal prices sold to power, cement, fertiliser and paper producers will increase to gradually match market price levels.
Under the proposal, producers of cement, fertiliser and paper will have to pay prices that are only 10 per cent lower than the export prices. Meanwhile, the plan to raise coal prices for power producers will be implemented in two phases. In early 2011, prices will be raised to levels equal to the production costs in 2010.
Vinacomin deputy general director Vu Manh Hung estimated that the price currently offered to cement, paper and fertiliser producers was only roughly VND1.1-1.5m (US$56.40-76.90) per tonne against the VND2m (US$102.60) export price. Meanwhile, Hung said production costs for a tonne of coal currently reached VND803,000 (US$41.2), surging up to 111.2 per cent over last year. Chairman of the Vietnam Cement Association Nguyen Van Thien said his organisation had recommended maintaining the current coal price next year.