Vietnam’s top coal producer, Vinacomin, said it planned to build two major coal-fired power plants with a combined capacity of 2,600 megawatts (MW) and an investment of more than $3 billion.

The first plant, Hai Phong 3, will have a capacity of 600 MW and use coal from Vinacomin’s mines in the northern coal hub province of Quang Ninh, Vinacomin Deputy General Director Nguyen Chien Thang said in a government report on Thursday.

The Hanoi-based group will also build another plant with a capacity of 2,000 MW in the southcentral province of Binh Thuan to supply power to Vinacomin’s bauxite processing complex there, Thang said.

He did not disclose the value of the investment but energy experts said the two plants could cost more than $3 billion to build, as it would cost $1.2 million to build each megawatt of coal-fired power generation capacity.

The unlisted coal group has invested in eight coal-fired and hydro power plant projects with a combined capacity of 1,600 megawatt.

Coal consumption in Vietnam, mainly by power plants, steel and cement producers, is forecast to jump 20 percent to 24 million tonnes next year from 20 million tonnes in 2008, the government said this week.

Hanoi has planned to slash coal exports, mainly to

The London Metal Exchange has announced that it has listed the first Vietnamese steel brand, DINH VU HAI PHONG, under the Mediterranean and Far East Steel Contracts. 30 brands have now been listed by 30 producers as good for delivery against the LME Steel Contracts, equating to a combined annual production of approximately 45 million tonnes.
 
 Producer: Dinh Vu Steel Stock Company
 Lot CN3.1
 Dinh Vu Industrial Zone
 Dong Hai Ward
 Hai An District
 Hai Phong City
 Vietnam
 Brand Name: DINH VU HAI PHONG
 Plant Address: As above
 Annual Billet Capacity: 170,000 mt
 Deliverable Shape: 120S 640kg
 SWORD Codes: DINHFE Far East Contract
 DINHME Mediterranean Contract
 
 The Mediterranean and Far East Steel Contracts have also reached a combined turnover of 600,000 metric tonnes.
 
 The official cash price on Friday 10 October for the Far East was: $350 and USD 360 for the Mediterranean.

It is reported that Viet Nam Steel Association has asked the government to further slash the export duty on steel ingot to 2%, following a ministry of finance decision to reduce the tax from the current 10% to 5%.
 
 Under the Decision 84/2008/QD-BTC, steel ingot will enjoy a reduced export tax duty of 5%. According to the ministry of finance, the move was aimed at removing difficulties for domestic steel producers. This is the second steel ingot tax cut in the past few weeks. On September 22nd 2008, the steel ingot export tax was halved from 20% to 10%.
 
 According to the VSA, domestic steel producers, especially steel ingot producers, lack capital and are facing bankruptcy due to the combined problems of lack of demand in the domestic market, and the high tax rate, which prevents them from developing an export market.
 
 Mr Pham Chi Cuong chairman of VSA said that a number of steel producers had been forced to cease production. He added that producers had nearly 1 million tonnes of steel worth roughly USD 1 billion in stock due to decreasing demand.
 
 According to the General Department of Customs, steel producers in the first seven months of the year exported nearly 1.3 million tonnes of steel ingot and steel products, an about face over previous years when steel had to be imported. However, the situation has changed in past months as prices of steel ingot and steel products in the world market are roughly USD 200 per tonne lower than in the domestic market.
 
 Besides the establishment of a fund to buy steel ingot stocks, the VSA also suggested the government provide steel producers and construction investors incentive credit policies to boost domestic steel consumption.

Vietnam News Agency reported that just a few days after the ministry of finance decided to slash the ingot steel export tax from 20% to 10%, Vietnam Steel Association has proposed the ingot steel export tax be slashed further to 2% or 0%.
 
 MOF expected that its decision to slash the ingot steel export tax rate from 20% to 10% would satisfy steel mills, especially VSA’s members, as the decision was made after considering the proposal from VSA itself. However, steel mills now say they want bigger tax decreases, in order to help steel mills boost exports, thus helping them survive their current difficulties.
 
 The noteworthy thing is that three months ago, VSA put forth a contradictory proposal. It suggested raising the export tax on ingot steel. VSA said that this is because of the unpredictable movement of the steel price in the world’s market and the unanticipated decrease of the domestic demand for steel.
 
 In the first months of 2008, while the domestic steel price was at USD 830 per tonne, the world’s price was as high as USD 1,200 per tonne. The big gap between the domestic and international prices prompted domestic steel mills to export massive quantities of ingot steel. The exports of ingot steel at that time were considered a worrying problem, as they could have resulted in a domestic shortage of steel. In order to restrain ingot steel exports, MOF, considering the proposal by VSA, announced the increase of the ingot steel export tax from 2% to 10% and then to 20%.
 
 The global economic recession and the US financial crisis in recent days both have forced steel prices down by a half to USD 650 to USD 700 per tonne. The world’s price decreases, together with the reduction in the demand for steel in the domestic market by 2/3, have led to bigger steel stocks. The inventory volume is now estimated at 900,000 tonnes, and has forced many steel mills to halt production temporarily.
 
 As a result, VSA, which previously was worried about the exportation of a massive quantity of ingot steel, now considers exports the only way out for many enterprises. The exports would help them settle financial difficulties paying bank debts and foreign partners. VSA thinks that cutting the export tax rate to 2% or 0% is the best solution for now. It said that the high export tax rate, aiming to restrain exports, was unnecessary at this moment, and would push steel mills into bankruptcy.