Vietnam regrets selling coal mine to RI firm

There has been growing disappointment in Vietnam over a 1991 decision to allow Indonesia?s PT Vietmindo Energitama to acquire a coal mine asset as the former country struggles to deal with the looming coal shortage at home, Vietnamnet.vn reported Thursday.

Vietmindo has become the co-owner of the Uong Thuong ? Dong Vong coal mine in Uong Bi City of Quang Ninh province since 1991. This is the only foreign investor who can set foot in the Vietnamese coal exploitation industry, the report said. The other co-owner is Uong Bi Coal Company, a subsidiary of Vietnam?s state-owned Vinacomin.

?The decision on ?selling the coal mine to an Indonesian investor 15 years ago has blundered the coal mining industry,? the report said.

It pointed out that Vietmindo has been exporting coal from the Uong Thuong-Dong Vong coal mine, and in several cases has breached production limit, an ironic situation as the Vietnamese government has been trying to reduce coal export to help ensure domestic supply as the country is projected to begin importing coal in 2015.

There has been suggestion for Vietmindo to limit annual coal export to 500,000 tons only, while the remaining dedicated for the domestic market.

Another point of contention is what is seen as little financial benefit for Uong Bi Coal Company. Under the business contract signed in 1991, which lasts 30 years, Vietmindo gets 90 percent of the total coal to be exploited, while the Uong Bi Coal Company only gets the other 10 percent.

In the past couple of years, Vinacoming has been calling for a revision of the 1991 business contract in a bid to seek more favorable terms. (*)