As many as half of million of people could be affected by difficulties facing the Vietnamese coal sector, according to the Vietnam National Coal Mineral Industries Holding Corporation Ltd.
Currently, more than 108,000 pit workers are working at coal mines in the northern province of Quang Ninh. The poor performance of these mines has the potential to effect not only workers, but their families as well, a number that has been estimated to be as large as 500,000, or half of the province's population.
According to the company, Vinacomin counted on a certain amount of inventory in order to ensure jobs for pit workers. Despite cutting between 5% and 15% in salaries this year, they say they are trying to maintain the salaries of pit workers at the same level as last year.
In July, Vinacomin sold 2.2 million tonnes of coal, including 300,000 tonnes that were exported, a record low in recent years.
The Electricity Regulation Agency of Vietnam says that the Electricity of Vietnam (EVN)’s power sales has also dropped as a result of a fall in coal consumption. This downtrend is forecast to continue in coming months.
Beginning July 1, when electricity prices were scheduled to increase, coal price also went up by 10%-11.5%, but Vinacomin still claimed losses of VND8.5 trillion (USD407 million) because their selling prices were below actual market value. Without any foreseeable way to offset their losses the group predicts no profit in 2012.