The Vietnam National Coal and Mineral Industries Group (Vinacomin) plans to reduce coal production and consumption from 43 million to 39 million tonnes this year, says Nguyen Van Bien, Vinacomin’s deputy general director.

Bien said that the cutback, which is roughly the same as last year, was due to a decrease in the demand for coal on both the domestic and overseas markets.

He added that in the first five months of this year, coal consumption was 17.7 million tonnes, approximately 41 percent of the yearly target.

The turnover of 39.6 trillion VND (1.9 billion USD), represented a 5 percent reduction compared to the same period last year.

Several industries have reduced their coal consumption, except for the power sector which has already used 7.08 million tones for generating electricity, an increase of 6.1 percent against the corresponding period last year.

The amount of coal used by the cement sector was 2.14 million tones, a decrease of 16.6 percent over the same period last year.

The group’s current coal stockpiles have risen to 7.1 million tonnes due to the sharp decrease in consumption.

The decrease is due to the worldwide economic downturn as well as the emergence of new energy sources, many of them renewable, being used by Russia and the US , which use 15 percent of the world’s coal, Bien said.

In addition, many countries that have their own coal reserves have increased production for their own domestic markets. He said that coal prices in the global market had dropped sharply, which has had adverse effect on the group’s exports.

In the first six months of this year, the group suffered losses of 1.8 trillion VND (8.6 million USD) as the price of coal sold to the Electricity of Vietnam has only covered 85-87 percent of production costs.

It has also been seeking approval from the Government to apply different levels of tax to coal exports instead of the current 10 percent.-VNA