VietNamNet Bridge – The report of the Vietnamese General Department of Customs (GDC) showed Vietnam exported 23,600 tons of iron ore to China in 2012, at $46 per ton on average. Meanwhile, the Chinese customs agencies said China imported 1,748,566 tons at $92 per ton from Vietnam.

Vietnam many times vowed to gradually reduce the iron ore exports to reserve the natural resources for the domestic production. However, it has many times broken the plans when businesses complained they would incur big losses if the border gate closes to iron ore exporters.

The Ministry of Industry and Trade, for example, lately turned the green light on allowing miners to export the exploited ores which was left unsold in an effort to save them from incurring losses.

The policy has been fully exploited by the mining companies, which have exported ores in large quantities, not only the inventory ores as stipulated. As a result, the natural resources have got exhausted, while the State has failed to collect trillions of dong worth in tax.

The high expected profits have prompted Vietnamese enterprises to ignore the regulations to continue exporting ore to China, the biggest buyer so far.

According to the Vietnam Steel Association (VSA), Vietnam has the total reserves of 1.3 billion tons of iron ore. Meanwhile, China needs 1.5 billion tons of ores to make 750 million tons of steel.

Therefore, Chinese have been hunting to purchase iron ores in Vietnam. They have been buying all kinds of ores, accepting all quality levels. Since Chinese are willing to pay high prices, Vietnamese enterprises prefer exporting ores to China to selling domestically.

VSA, expressing the worry about the possible lack of iron ore for domestic steel production, has sent a petition to the Ministry of Industry and Trade and the Ministry of Natural Resources and the Environment, requesting to stop the iron ore export.

VSA emphasized that Vietnam needs iron ores to run the 14 blast furnaces which have the total capacity of 3,829,000 tons per annum. Meanwhile, some of them once had to stop operation because of the lack of ores.

Meanwhile, mining enterprises have been insisting the competent ministries on the permission to continue exporting iron ore.

According to Chinese customs agencies, in 2011, China imported 2,895,156 tons of iron ore from Vietnam at $106 per ton. Meanwhile, according to VSA, the Vietnamese customs agencies’ report showed Vietnam exported only 1,344,836 tons of ore at $52 per ton to the country.

In 2012, Vietnamese agencies reported Vietnam exported 23,600 tons at $46 per ton. Meanwhile, Chinese said the figures were 1,748,566 tons and $92 per ton.

As such, there exist two big problems in iron ore export. First, the export volume was very big, which may harm the domestic steel production. Second, there is a big gap in the statistics about the export prices and the export volume, which has led to the loss of revenue for the state’s budget.

If referring to the reports of the Vietnamese and Chinese customs agencies, in 2011 and 2012 alone, Vietnam lost VND3,560 billion in tax collection because of the failure to control the actual export volume.

The Ministry of Industry and Trade, when asked to comment about the big gap in the statistics, said that Vietnam and China have not signed the agreement on information exchange, which means that it’s still impossible to check the statistics.

TBKTVN