Vinacomin -- Vietnam National Coal-Mineral Industries Group -- expects the country's coal demand to rise to 94 million tons by 2015, with 67 million tons to be consumed by power plants, and a production forecast of not more than 60 million tons. By 2025, demand is projected to increase to 308 million tons.

In the first seven months of 2009, Vinacomin exported 13.586 million tons of coal, a 7 percent increase over the same period in 2007.

Coal trading between Vietnamese and Chinese companies resumed after the lifting of a May 2007 ban imposed because of heavy coal smuggling in the northeast province of Quang Ninh.

In March, Vietnam's minister of industry and trade authorized the export of 3 million tons of coal from Quang Ninh to the Chinese province of Quang Tay. A month before, according to Viet Nam News, the Finance Ministry agreed to a 10 percent reduction in surcharges on coal exports to help boost the economy.

When Vinacomin sells coal to the national electricity company, it loses 45 percent compared with what it could get by exporting it, Viet Nam News reported in February.

A company representative told the paper: "Thanks to the Government's intervention to regulate prices and stabilize the market; cement, fertilizer and paper companies have all benefited from artificially low coal prices. The price now paid by the companies is half the coal export price."

Vinacomin is expected to export 10.5 million tons of coal to China from the second half of this year and the first quarter of 2010. The sale of 2.5 million tons of fine anthracite coal to China, Vinacomin said, would go through the Van Gia transshipment area of Quang Ninh through direct contracts with Chinese companies in which coal could be exchanged for goods.

Yet illegal coal export in Vietnam is showing signs of getting out of control again in Quang Ninh.

Saigon's Tiep Thi news reported that in late July, Quang Ninh politicians pointed the finger at Vinacomin as the main source of illegally exported coal. The Vinacomin companies reportedly covered the China shipments with falsified invoices indicating sales to Vietnamese domestic consumers.

Vietnam Coal and Mining Industry Group, or TKV, has disciplined dozens of its staff because of the problem, Tiep Thi reports, including high-level managers of Mao Khe Coal and Dong Vong Coal, as well as a TKV subsidiary.

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