Vietnam mining group cuts pay as sales plummet

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The Vietnam National Coal and Minerals Industries Group said it has had to cut salaries by 5 percent while a mass temporary layoff is also likely due to low coal sales.

A 5 percent pay cut across the board in the first half follows a 10 percent cut last year.

The state-owned company, known commonly as Vinacomin, said June 18 that it is facing difficulties and made low profits in the first half when its revenues were VND47.6 trillion (US$2.26 billion).

News website VnEconomy quoted Nguyen Van Bien, the company's deputy director, as saying coal supply is increasing worldwide but demand remains low in a stagnant global economy.

While global prices are falling, domestic production costs are increasing, he added.

The mining tax rose by 13.5 times in the past five years to $148.29 million last year.

Export tariffs on coal are set to increase by 3 percentage points to 13 percent from July 7, prompting Vinacomin to cut monthly shipments by more than half to 400,000-500,000 tons in the second half of the year..

The company expects to export 9.5-10.5 million tons this year, a decline of around 40 percent from last year.

More than 10 percent of Vinacomin's 138,000 employees face temporary layoffs or cuts in working hours.

Tax increase protest

A 3 percent increase in export duties equals VND120 billion, but the government would lose as much as VND600 billion in other tariffs like corporate tax since the company has to cut back on production and exports, Vinacomin said.

The government's revenue losses could be higher if tax collection of related industries is counted, it added.

It has proposed a regime of graded export tariffs based on prices.

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