The Vietnamese coal industry was hugely affected by the global economic crisis in 2012. The price of coal fell by more than 50% and the sector has had to look at restructuring as part of a solution to ensure it’s long-term profitability.
Despite these problems the country’s coal stockpile has significantly decreased. Different units in the Vietnam National Coal - Mineral Industries Group have been given more responsibility for their production in order to raise their competitiveness within the group. The cheaper their product, the more likely it will be bought by the group.
In previous years, the coal industry each year had to provide subsidies running into tens of millions of dollars to cover the losses racked up by domestic businesses. The higher coal production and the continuous subsidies have caused shortages in terms of capital in the coal industry and therefore, market-oriented development is a solution.
According to the government’s plan for the sector, total output must reach over 76 million tonnes of coal a year by 20 20 to supply the power industry and other sectors.
With the energy sector about to adopt market valuations, soon consumers will face international level prices. This will also help the government adjust the management of the coal sector in order to attract more investment and develop a more competitive industry.
