Coal industry hungry for capital, coal workers hungry for food

VietNamNet Bridge – Vietnamese have been warned that the country would seriously lack coal in the next three years, because the coal industry lacks tens of billons of dollars worth of investment capital.

1,500 coal workers give up jobs because of low salaries

According to the Vietnam Energy Association, the Vietnam Coal and Mineral Industries Group (Vinacomin) employs 140,000 workers, including 110,000 in Quang Nin province.

If the situation gets worse, 110,000 workers would be laid off or see their income decreasing. This would affect their 460,000 dependent family members.

It’s very serious that the number of workers leaving their jobs keeps increasing steadily. It is estimated that 1500 workers have given up their jobs so far this year.

In the past, Vinacomin could easily find workers from the northern provinces such as Thai Binh, Ha Nam, Hung Yen and Hai Duong. However, it nowadays has to look for workers in remote areas and central provinces. As a result, the coal exploiter has to pay higher for the labor force.

Low salaries, hazardous working environment and the business decline of the coal industry are the three main seasons that have prompted them to run away.

A survey conducted in Thai Nguyen, Lang Son and Quang Ninh on August 13 – September 20 showed that though coal workers have to work in a hazardous environment, they receive 7 million dong a month only, which is not enough for the workers who have 3-4 dependent family members.

“A lot of workers leave after a period of working, thus causing the serious shortage of the labor force,” VEA has warned.

Coal industry needs tens of billions of dollars

According to VEA, the coal industry needs to have the total output of 55 million tons of clean coal by 2015, or 58-60 million tons of crude ore to be able to satisfy the national economy’s demand.

This spells that in the next three years, Vinacoal would have to exploit 20 million tons of crude coal more. As such, Vinacomin would have to build at least 10 more mines with the capacity of 2-2.5 million tons per annum.

However, it is very difficult to implement the project, for many reasons.

Firstly, it would take 6-7 years and 300-350 million dollars to build a new mine pit. As such, Vinacomin needs 3.5 billion dollars in the immediate time to build 10 new mines.

And if Vincomin builds all the 28 new mines as requested by the government, and expands the 61 existing mines, the group would need tens of billions of dollars.

The lack of capital for mining remains the biggest headache for investors. The capital shortage has been partially attributed to the low prices of the coal sold to power generators.

According to Vinacomin, the group loses 7 trillion dong a year because of the sale of coal to the Electricity of Vietnam at the prices lower than the production costs.

Secondly, the coal output and the export price have been decreasing. In 2012, the coal export price dropped by 24-36 percent. Meanwhile, it is expected that the volume of coal to be consumed would be five million tons lower than initially planned.

Thirdly, the input costs of coal production has been increasing rapidly with higher burdens of tax and fee.

The energy association has warned that if there is no breakthrough in the policies to be applied, Vietnam will not have enough coal to provide to tens of thermopower plants (36,000 MW in total), let alone other economic branches.

Pham Huyen