A worker of the Vietnam National Coal and Mineral Industries Group (Vinacomin) at a production line. (Photo: VNA)
 Hanoi (VNA) - The Vietnam National Coal Mineral Industries Group (Vinacomin) must cut costs to become competitive and find buyers for its stockpile of 9.3 million tonnes of coal, Prime Minister Nguyen Xuan Phuc’s working group said.

At a meeting with Vinacomin on June 19, the working group, appointed by the Prime Minister, said it is very important to resolve the stockpile as Vinacomin’s growth contributes significantly to the country’s overall economic growth.

To meet the GDP growth target of 6.7 percent in 2017, the Government wants to boost the growth of the oil, gas and mining sectors.

At the meeting, Mai Tien Dung, head of the working group, minister and chairman of the Government Office, said that the PM wants Vinacomin to pay attention to five issues closely related to the group’s operations and the overall economic growth target of the country.

Foremost, Phuc wants Vinacomin to deal with its stockpile of 9.3 million tonnes of coal. “This is the biggest obstacle in the way of Vinacomin’s growth and business efficiency,” said Dung.

Secondly, the PM has asked the group to draw up measures and propose policies to the Government to cut prices so that Vietnamese coal can compete against imported coal. Currently, imported coal (coded 4B) is priced at roughly 1.5-1.6 million VND (66.6-71.1 USD) per tonne, but the same Vietnamese coal is roughly 2 million VND per tonne.

“If we do not handle it well, there will be huge competition pressure. This requires Vinacomin to put more efforts into restructuring, revamping and reducing costs,” Dung said.

Thirdly, Vinacomin must improve its investment efficiency by speeding up profitable projects, and closely supervising projects that are going slow.

The PM also wants Vinacomin to actively work with provincial authorities to fight against illegal coal exploitation and smuggling.

Finally, PM Phuc ordered the company to further restructure and divest from its non-core businesses. It must pay more attention to processed products with high added value instead of only trying to increase output, according to Dung. Rising output must go hand in hand with effectiveness and value.

Dung said that Vinacomin is a strong economic group and plays an important role in ensuring national energy security. So far this year, the corporation has made successful changes, which have contributed to its notable turnover and profits.

Vinacomin has produced 18.3 million tonnes of coal in the first six months, increasing 5 percent year on year and meeting 54 percent of the annual target. Of the total, 686,000 tonnes of coal have been exported.

With the sale of 18 million tonnes of coal in the first half of the year, up 2 percent year on year, the group has met half of its annual target.

Vinacomin has posted a turnover and profit of roughly 53.3 trillion VND (2.3 billion USD) and 1 trillion VND (44 million USD), respectively in the first six months, up 10 percent year on year. It has contributed 6.3 trillion VND to the State budget and generated jobs for around 110,000 workers in this period. It is estimated that Vinacomin will fetch a profit of around 2 trillion VND in 2017, up 1 trillion VND against last year.

Reports from the Ministry of Finance also reveal that Vinacomin’s achievements are impressive in the first half of 2017, especially its bauxite aluminum project in the Central Highlands province of Lam Dong, which has made a profit of 50 billion VND in the first six months, after three consecutive years of losses.-VNA