EVN refuses to buy Vinacomin's coal, 4,000 workers could lose jobs

EVN refuses to buy Vinacomin's coal, 4,000 workers could lose jobs

Electricity of Vietnam (EVN), the biggest power generator, says it does not
want to buy coal from Vinacomin, the country's largest coal miner, for its
power plants.

EVN is seeking the government's permission not to buy 2 million tons from
Vinacomin.

Vinacomin's managers said if EVN doesn't use Vinacomin's coal, the mining
company will suffer heavily.

There are still 10.53 million tons of coal in stock. If the coal is not
sold, the group will have to lay off 4,000 workers.

Pham Pho, former rector of the Sai Gon Economics & Polytechnic Junior
College, believes that EVN doesn't want Vinacomin's coal because the coal
has low carbon content. It would be better for it to import coal because
imports have lower prices and are more suited to technologies used by
domestic thermal power plants.

There are still 10.53 million tons of coal in stock. If the coal is not
sold, the group will have to lay off 4,000 workers.
Pho said that Vinacomin has exploited coal in large quantities. "If
Vinacomin continues providing low-quality products, it will not be able to
sell coal," he said.

Tran Dinh Long, former deputy chair of the Vietnam Power Association, said
EVN has the right to decide from whom it will buy coal.

"It is understandable that EVN wants to buy products at reasonable prices
which fit their power generation technology," he said.

Vinacomin needs to think about when domestic enterprises don't want to buy
its coal and want to use imports instead.

"If Vinacomin is sure that its coal has high quality and reasonable prices,
but EVN still refuses to buy its coal, it can bring the case to the
government. The government will come forward and judge if EVN's refusal is
reasonable," he said.

However, the big problem here is that thousands of workers may lose jobs if
Vinacomin loses one big client - EVN.

According to Pho, the government needs to intervene in this case to
encourage the consumption of Vietnamese products to create jobs and develop
domestic businesses.

"If the coal quality is low, Vinacomin has to improve the quality by
enriching coal and improving the carbon content," he said.

"The government should ask EVN to set up requirements on coal. If Vinacomin
can satisfy the requirements, EVN will have to buy Vinacomin's coal for the
sake of Vietnamese benefits," he said, adding that EVN is a large national
corporation and it has to act for the nation's benefits.

Long said that if Vinacomin's products remain uncompetitive because of bad
management and outdated technology, the government needs to force it to fix
the problems or urge bankruptcy.

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Link to Original Article:
http://english.vietnamnet.vn/fms/business/181963/evn-refuses-to-buy-vinacomi
n-s-coal--4-000-workers-could-lose-jobs.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com