The state-owned Vietnam National Coal-Mineral Industries Group (Vinacomin), the country’s top mining company, is seeking the Government’s approval to use coal as security to secure foreign loans.
Vinacomin seeks to use coal as security for its foreign loans
On January 10, Le Minh Chuan, General Director of Vinacomin, said that the group plans to use appraised coal reserves as collateral to borrow capital from international sources.
Vu Manh Hung, the company's deputy general director clarified that the group wants to use the appraisal of coal mines value as security for construction loans when building a new coal mine.
Loans with a 10-year term or more are expected to come from international organisations such as the Asian Development Bank (ADB), the World Bank (WB) and the Nordic Investment Bank (NIB), Hung said.
Under the current regulations, coal and minerals are resources owned by the Government and coal firms are just authorised to carry out exploration and exploitation activities.
According to Hung, in 2011, Vinacomin’s debts totaled around USD200 million, and they are making plans to get more loans this year.
In 2012, Vinacomin targets to produce over 48.9 million tonnes of coal, 2.5% more than last year.
They expect to make profits of VND6.28 trillion (USD298.53 million), and have total a revenue of VND96.3 trillion (USD4.57 billion) this year. This would be a fall in profit of 19%, but a 3% rise in revenues compared to 2011.
The group is also seeking the Government’s approval to increase coal prices for the electricity industry in order to offset rising production costs.
