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Leading miner fears coal shortage may affect power plants

Vietnam’s biggest coal miner Vinacomin is struggling to provide enough coal to thermal power plants due to shortage of workers and surging costs.

The state-owned company provided 6.3 million tons of coal to power plants from the beginning of the year to March 14, 31 percent short of what it promised.

One of the reasons is that half of its miners contracted Covid-19 in the first two months, and some mines saw only 20 percent of workers showing up at the end of last month.

Another reason is import value so far has met only 7 percent of that planned for the first three months, which has led to the company’s delivery of coal mixed between foreign and domestic sources falling 69 percent short of target.

The delay of the national utility Vietnam Electricity (EVN) in approving price tags for mixed coal also made Vinacomin miss opportunities to import more coal.

Now that EVN has approved the price tags, the miner has struggled to import due to surging prices globally amid the Russia-Ukraine crisis.

Vinacomin also said that many thermal plants tend to buy coal from other sources when their prices are low, and only buy from it in surging amounts when its competitors raise prices, which make the miner struggle to fulfill its commitments.

It requested the Ministry of Industry and Trade to order thermal plants to purchase according to contracts.

The company also proposed that the government increase coal prices, as dwindling resources has made mining more costly, while coal prices for power plants have remained unchanged for the past two years, dragging the company’s profit down.

Vinacomin estimates that it would lose VND1.39 trillion ($60.76 million) in coal mining this year.

Coal-fired plants accounted for 43.6 percent of total power generation in February, according to EVN.