Hanoi (VNS/VNA) - As mining activities are seasonal and affected by theweather, revenue and profit of coal mining businesses have fluctuatedcontinuously over the past 10 years.

Vinacomin - Northern Coal Trading Joint Stock Company (TMB) saw an averagegrowth rate of 9 percent in revenue every year during the 2010-2020 period.

Vinacomin - Coal Import Export Joint Stock Company (CLM) has reported a 17 percent rise in revenue during the past 10 years, from 1.6 trillion VND (69.4million USD) to 7.5 trillion VND.

Ha Lam Coal (HLC), Vang Danh Coal (TVD), Ha Tu Coal (THT) and Mong Duong Coal(MDC) witnessed the same average revenue growth in the 2010-2020 period of 6-7percent.

Despite earning trillions of dong inrevenue, coal companies only achieved tens of billions of dong a year inprofit, with some even suffering losses.

Compared to 2010, the profits of coal companies were almost unchanged.

Mong Duong Coal (MDC) had a profit of 79 billion VND in 2010 – the highestin the group mentioned above. But by the end of 2020, this enterprise onlyreported 27.8 billion VND in profit.

Coc Sau Coal (TC6) witnessed profit fall from 67 billion VND in 2010 toonly 5.6 billion VND in 2020, the lowest level among the group, although itsyearly average revenue is much higher than many other businesses in theindustry.

The merger between Cao Son Coal (TCS) and Tay Nam Da Mai Coal (TND) also didnot help Cao Son Coal improve its profit in 2020, hovering at more than 54billion VND.

Viet Bac Mining (MVB), which started the equitisation process in 2015, made abreakthrough in profit growth with 55 billion VND in 2015, soaring to 270billion VND in 2020, a jump of 37 percent.

Businesses in the coal mining industry have to confront specific risks such asthe reserve of open-pit mines gradually drying up.

Most mines are exploited deep underground, with some at even 300mbelow sea level. Underground coal mines have higher soil removal costscompared to open-pit mines, which leads to less competitive coal prices.

Mining activities are seasonal and affected heavily by the weather. Due to thenegative impact on the environment, taxes and fees for the coal industry arealways high and tend to increase.

However, if comparing coal stocks, it can be seen that there are still goodstocks with low price-to-earnings (P/E) rates and high dividend payout ratios.

Leaders of the Vietnam National Coal and Minerals Group (Vinacomin or TKV) saidthat the coal industry was facing many difficulties due to the impact of theCOVID-19 pandemic, which has caused millions of tonnes of coal residuals at theyards and warehouses of TKV.

They said the coal demand for the economy in 2021 will not grow much, stayingat the same level as in 2020. In addition, the mining conditions areincreasingly difficult due to the rising depth underground, hampering thetransportation process./.