Mining giant vows healthy competition in coal supplies

The Vinacomin Group was recently accused of controlling coal supplies. The group’s deputy director, Le Minh Chuan, spoke with Dai Doan Ket (Great Solidarity) about the issue.

How do you respond to accusations made by cement companies that the group is artificially inflating freight charges for the supply of coal?

Customers normally take time to study and negotiate before signing contracts. Over a year it often takes one or two meetings to conclude negotiations. Diverging opinions are thus inevitable.

The State entrusts the group with coal exploitation activities to serve the national economy and secure national energy security. The group takes full responsibility for managing and exploiting coal nation-wide. During contract negotiations there are always some customers who are not satisfied and think the group is controlling supply and inflating freight charges.

Cement companies complained there were no negotiations when coal supply contracts were signed. Could you explain if this was the case?

Signing of coal transport contracts were based on agreements between the two sides. Under existing rules, the group signed coal supply contracts at a quantity of 50,000 tonnes per year. Contracts for smaller quantities remain the responsibility of the group’s affiliated companies. So, if customers complained that the group had not reached an agreement with them or fixed freight charges were above the market price, perhaps affiliated companies did not fulfil their responsibilities.

I should add the group’s transport capacity only covers 10 per cent of coal supply contracts, private companies transport the rest.

Could you explain why freight costs offered by transport companies associated with your group were much higher than market prices?

Transport companies requested the group to raise freight costs several times last year but in fact we asked them to reduce prices instead.

Freight charged on coal supply contracts is usually very high. Why doesn’t the group open the contracts to tender instead of appointing transport companies to regulate freight?

The decision to choose transport companies was made by the group and its customers. Presently, no documents regulate the transport of coal. Any transport company is eligible to participate. All transport contracts have been made by both two sides, not imposed by the group .

Many people have said the group holds a monopoly over the sale and transport of coal but I want to stress we don’t monopolise the supply of coal.

The Viet Nam Coal and Mineral Industries Group decided not to allow cement enterprises to freely transport coal out of fear it would be re-sold to unlicensed traders. Is there evidence of these activities?

Investigations show coal leakage persists even when the group continuously updates information for customers about sales quantities. Strengthening management control should be considered a priority for customers.

The Viet Nam Cement Association said it sent a report to the group to complain about the unreasonable price of coal following reports of high prices last year. Why has the group failed to respond?

The group has not received any reports concerning this issue since last year. I think cement companies should hold further negotiations with the group to reach a consensus.

VietNamNet/Viet Nam News

Tags: Vietnam coal suppliers, Vietnam mining, Vinacomin Group