Vietnam's Ministry of Industry and Trade has proposed the central government to double the export quota of coal to 4 million mt/year for 2017-2020, from 2 million mt/year set previously.
The increase in the exports will help lower the local producers' soaring stockpile of coal, which is currently at about 12 million mt, the government portal reported Tuesday, quoting Nguyen Khac Tho, deputy director of the ministry's General Department of Energy.
Of the total stockpile, Vietnam National Coal-Mineral Industries Holding Corp. Ltd., better known as Vinacomin, has 11 million mt.
In a recent letter, the country's Ministry of Finance also agreed with the industry and trade ministry's proposal to raise the export quota of coal, the government statement said.
The finance ministry is in favor of increasing the export volumes to help Vinacomin compete with cheap coal imports, rather than lower the natural resources taxes as requested by the company, it said.
Effective July 1 this year, Vietnam raised the natural resources taxes to 12% from 9% for coal produced from the surface, and to 10% from 7% for coal produced from the underground.
Vietnam, which has in recent years lowered its coal exports for local use, is expected to export about 2 million mt of coal this year.
In the first nine months, its coal exports decreased 48.6% year on year to 732,079 mt, according to customs data.
But the lower exports combined with limited sales have hit Vinacomin hard.
The state-owned producer is at its most difficult time in the last 10 years, which is due to fierce competition from cheap coal imports, Nguyen Van Bien, deputy director at Vinacomin, was quoted as saying.
The company's coal output this year is expected to be lower by about 3 million mt compared with 37.3 million mt last year, he said.
Vinacomin said October 11 that its revenue in the first nine months fell 7% year on year to Dong 71.46 trillion ($3.15 billion).
The state-owned company also had to reduce its sales target for this year to 36.5 million mt from last year's 39 million mt due to competition from cheaper imports, Chairman Le Minh Chuan said in July.
Vinacomin then said in a statement earlier this month that it further cut the sales target this year to around 35 million mt, down 1.4% year on year.
In the first nine months, Vietnam imported 10.51 million mt of coal, rising 147.6% compared with 4.25 million mt a year ago, the customs data showed.
Local consumers have turned to imports in the past few months to take advantage of low prices in the international markets, according to Tho. But he said imports are likely to go down for the rest of the year as imported coal prices are expected to increase to possibly to domestic coal prices levels.
