Vietnam coal group seeks gov't help in "unfair' Indonesia mining deal

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State-owned mining group Vinacomin has asked the government to take strong measures against an Indonesian company accused of breaching output limits while extracting coal in northern Vietnam.

According to Vinacomin, Jakarta-based PT Vietmindo Energitama's contract limits its annual commercial coal output from the Uong Thuong-Dong Vong Mine in Quang Ninh Province at 500,000 tons. However, its output exceeded the limit by 242,000 tons in 2010 and by 363,000 tons last year.

Vietmindo signed the contract with Uong Bi Coal Company, a subsidiary of Vinacomin, to jointly operate the 1,000-hectare open-pit mine project in 1991. The contract allowed Vietmindo to develop mining facilities, extract reserves and export all products until 2021. It granted Uong Bi 10 percent of the profits.

But it was only recently that Uong Bi officials admitted that the deal was not fair for their company. They said they had no power in the partnership. 

Pham Van Tu, deputy general director of Uong Bi, said the company has been calling for a renegotiation of the terms of the old contract, but the Indonesian company turned down the request.

Now Vinacomin is seeking government intervention in the case, arguing that the old contract has to be revised to follow current mining regulations. The group also urged the government to impose strict penalties for any violations by Vietmindo.

It noted that the Indonesian firm has been fined twice for breaking environmental regulations.

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