VietNamNet Bridge - The Finance Ministry has said to accept the negotiation between the Vietnam Coal and Mineral Group and four major power users on the plan to increase coal prices. 

According to the plan submitted by the ministry to the government, the price for coal sold to cement producers will increase as of January 1, 2007. The price of coal provided for the power industry will increase in line with the electricity price increasing itinerary. For the paper and fertilizer industries, the new prices will be immediately applied when the government approves the plan. 

Previously the cement and fertilizer industries asked the government and the Finance Ministry to allow them to apply the new coal prices under a fixed itinerary. Accordingly, the coal prices will rise around 10-20% as of January 1, 2007. The paper sector, meanwhile, suggested the time for the increase of coal prices of July 1, 2007. However, according to the viewpoint of the Finance Minister, coal is the output fuel of many industries so the plan for the increase of coal prices must be carefully considered to avoid adverse impacts on the price of goods and on the economy in general. 

Doan Van Hai, an official from the Bai Bang Paper Corporation, revealed that Bai Bang has proposed that the Vietnam Coal and Mineral Group should raise coal prices as of July 2007. “The remaining job belongs to the Finance Ministry and the government. We will accept the plan approved by the management bodies,” he said. 

Under the proposal of the Vietnam Coal and Mineral Group, coal prices will increase by 25% for the power industry as of January 1, 2007, 44% for the fertilizer industry and 50% for the paper industry. However, the proposal has been fiercely protected by the four major coal users. After several rounds of negotiations, the three coal users, cement, paper and fertilizer have accepted the increase of 44% within two phases. The price of coal sold to the power industry will be decided by the government. 

(Source: VNE)