Hanoi (VNA) - The Electricityof Vietnam Group (EVN) and its coal supplier Vietnam National Coal andMineral Industries Holding Corporation Limited (Vinacomin) have finally reachedan agreement on coal selling prices for power production.

The agreed price, which has not yet beendisclosed, has come into effect from September 1, according to the Ministry ofFinance.

Earlier, the relationship between EVN, thecountry’s largest power generator, and Vinacomin, a long-time coal supplier ofEVN, became tense when EVN revealed its plan to reduce coal purchased fromVinacomin, the country’s largest coal miner, explaining that the group wantedto buy products at reasonable prices which fitted its power generationtechnology.

EVN was then seeking the Government’s permissionto move forward with the plan, according to which it looked to reduce its coalpurchase to 17.92 million metric tonnes, a two-million-tonne drop from itsprevious plan.

Vinacomin immediately expressed its oppositionto EVN’s proposal, claiming it would make Vinacomin’s coal production costsincrease and reduce effectiveness.

Besides this, the corporation would have to layoff 4,000 workers to make up for the financial losses if EVN went through withits plan to cut coal purchase.

Vinacomin requested intervention by theGovernment and relevant ministries to convince EVN to avoid purchasing coalfrom other units this year to avoid losses for Vinacomin.

In addition, claiming unfairness in taxes andfees, Vinacomin said the Ministry of Industry and Trade (MoIT) should havepolicies to encourage use of locally produced coal and limit imported coal.

“Under no circumstance should EVN stop buyingcoal from Vinacomin to purchase coal from foreign suppliers”, a representativeof EVN said.

It was the high coal prices that had forced EVNto cut coal bought from Vinacomin. High coal prices would make electricityproduction cost increase and force the power sector to bear huge losses, headded. Therefore, instead of buying from Vinacomin, EVN would consider buyingcoal from other domestic companies at more reasonable prices, he added.

At a recent meeting, Minister - Chairman of theGovernment Office Mai Tien Dung requested that the MoIT and related agenciesurgently implement solutions to consume Vinacomin’s coal inventory.

Dung said Vinacomin should also take measures tolower cost and increase competitiveness. For example, imported coal dust waspriced at just 1.4 million VND to 1.6 million VND (61-70 USD) per tonne, whilethe price of coal produced by Vinacomin was 500,000 VND higher per tonne, hesaid.-VNA