Decision No. 20/2003/QD-TTg dated January 29, 2003 of the Prime Minister approving the development planning for Vietnam's coal industry in the 2003-2010 period, with the prospects till 2020 taken into consideration

DECISION

OF THE PRIME MINISTER APPROVING THE DEVELOPMENT PLANNING FOR VIETNAM'S COAL INDUSTRY IN THE 2003-2010 PERIOD, WITH THE PROSPECTS TILL 2020 TAKEN INTO CONSIDERATION

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

At the proposal of the Ministry of Industry (Official Dispatches No. 3989/CV-KHDT of October 10, 2002 and No. 4909/CV-KHDT of December 9, 2002) on the approval of the development planning for Vietnam's coal industry,

DECIDES:

Article 1. To approve the development planning for Vietnam's coal industry in the 2003-2010 period, with the prospects till 2020 taken into consideration, with the following major contents:

1. Orientations for the development of coal industry:

- Coal constitutes a precious natural resource and an irreproducible energy source. Therefore, the exploration, exploitation, processing and use of coal must be done in an economical and efficient manner.

- To sustainably develop the coal industry, thus meeting the national economy's coal demands; to ensure a stable domestic coal market and set aside a rational part for export so as to regulate the quantities and types thereof and create foreign currency sources.

- To develop coal industry in close combination with socio-economic development, tourism, national defense, security and environmental and ecological protection in coal areas, especially in Quang Ninh province.

- To constantly renovate and apply sciences and techniques in order to raise productivity and ensure safety in coal exploitation.

- To strictly manage coal resources.

2. Coal resources:

The total coal reserve by January 2002 is determined at about 3.8 billion tons, in which:

- Coal: 3.4 billion tons.

- Peat: 0.4 billion tons.

- The coal reserve included in the planning: 2.5 billion tons.

In the 2003-2010 period, it is necessary to concentrate on boosting the exploration to the depth of - 300 m, and at the same time conduct exploration and basis surveys at the depth of under - 300m in Quang Ninh coalfield; to step by step explore the northern delta coalfield in service of the energy development strategy; in other areas, peat shall be taken into consideration.

3. Specific objectives:

a) The production output of merchandise coal:

The production output of merchandise coal is estimated at the following levels:

- By 2005: 16-17 million tons.

- By 2010: 23-24 million tons.

- By 2015: 26-27 million tons.

- By 2020: 29-30 million tons.

The merchandise coal output may be adjusted to suit the market demand in each period, taking into consideration the importation of coal on the basis of balancing the common efficiency of the economy.

d) Production technologies:

To boost the renovation of exploitation technologies, especially in the domain of pit mining, focusing on pit mechanization, pit prop and mining in order to reduce natural resource loss, raise labor productivity and improve working conditions as well as industrial safety and hygiene. To synchronize and modernize technological lines for coal sorting, processing and transport as well as the system of coal-delivering ports, thus minimizing the impacts on environment and ecological system.

c) Capital construction investment:

- To step by step invest in, renovate, expand and raise the capacity of the existing mines and coal-sorting systems and open new mines so as to meet the coal demand of the national economy (see the enclosed appendix).

- Investment capital demand:

The total investment capital for the 2003-2010 period is estimated at about VND 14,166 billion, in which:

+ Capital for investment in maintenance, expansion and construction shall be about VND 12,933 billion.

+ Additional capital for business activities shall be about VND 1,233 billion.

- Capital sources:

+ Own capital, commercial loans, preferential loans and other sources.

+ The coal industry shall be partially supported with budget capital for the following tasks: elaborating development plannings for coal industry and coal areas, conducting basic surveys at the deep parts of coalfields in Quang Ninh province, the northern delta and other areas, with peat taken into consideration.

In the course of making investment, its is necessary to create more capital sources in the forms of foreign borrowings, equipment purchase with deferred payment, financial leasing, equitization, issuance of project bonds, and business cooperation with domestic and foreign organizations.

Article 2. Implementation organization:

1. The Ministry of Industry, with its State management functions, shall have to direct the following basic tasks:

- To direct the implementation according to the approved planning, first of all, the investment preparation and execution in the 2003-2010 period.

- To assume the prime responsibility and coordinate with the concerned ministries and branches in directing Vietnam Coal Corporation and enterprises outside the Corporation to draw up investment plans, carry out the exploitation efficiently and apply measures so as to ensure safety in coal mining; to study and propose mechanisms and policies for the development of coal industry as well as policies forwards laborers thereof.

- In the course of implementing the planning: To periodically evaluate the implementation of the planning and propose adjustments thereof in order to suit the coal industry and national socio-economic situation.

- To direct the coal industry to closely coordinate with the ministries, branches and localities (especially Quang Ninh province) in working out effective solutions and measures to minimize negative impacts on the landscape, environment and ecological system in the operation areas.

2. The Ministry of Planning and Investment shall assume the prime responsibility and coordinate with the concerned ministries and branches in studying support policies and balancing capital source for the work of elaborating plannings for the coal industry and coal areas, making basic surveys at the depth of-300m and under of coalfields in Quang Ninh province, northern delta and other areas, with peat taken into consideration.

3. The Ministry of Finance shall assume the prime responsibility and coordinate with the concerned branches, basing themselves on each period and the situation on coal production and consumption, in submitting to the Prime Minister for decision on reasonable selling prices of coal for four big coal consumers, namely electricity, cement, paper and fertilizer industries, on the principle of fully covering reasonable production costs, then striving to apply coal selling prices under the market mechanism by 2006.

4. The presidents of the People's Committees of the provinces having coal resources such as Quang Ninh, Lang Son, Thai Nguyen, Bac Giang, Nghe An, Quang Nam and Hung Yen’shall direct their local services and branches and Vietnam Coal Corporation in creating conditions for coal industry's units to implement this planning.

5. Vietnam Coal Corporation and units engaged on coal production and business shall have to organize the implementation of the planning and bear responsibility for coal supply to the national economy. To effectively perform the tasks of managing and exploiting the natural resources assigned to them. To draw up and carry out plans on human resource training and development and to boost scientific and technical activities with a view to accepting the world's and region's advanced techniques in the field of coal exploration and exploitation, so as to yield high productivity and ensure safety. To coordinate with localities in drawing up plannings on peat exploration and exploitation for fertilizer production in service of agriculture and rural development.

Article 3. This Decision takes effect 15 days after its signing.

Article 4. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the provincial/municipal People's Committees, the Chairman of the Management Board and the General Director of Vietnam Coal Corporation and the heads of the concerned agencies shall have to implement this Decision.

APPENDIX

LIST OF COAL MINES TO BE INVESTED IN THE 2003-2010 PERIOD
(Issued together with the Prime Minister's Decision No. 20/2003/QD-TTg dated January 29, 2003)