Finance ministry proposes ban on raw mineral exports

11:19 AM 10/09/2018 Print

Copper ore extraction at the Sin Quyền-Lào Cai Vimico complex in the northern province of Lào Cai. VNA/VNS Photo Quốc Khánh

The proposal was revealed in a recent document the finance ministry sent to the Ministry of Industry and Trade (MoIT) that contains numerous measures to boost State management of mineral resources.

Lưu Mạnh Tưởng, director of the Import and Export Taxation Department, General Department of Việt Nam Customs (under the finance ministry), told Tuổi trẻ newspaper that the Party and the State have always supported the export of highly processed minerals that carry high added value.

Tưởng pointed out that tariffs on many minerals cannot be raised to reduce export because materials such as iron, copper and lead are subject to export taxes as high as 30-40 per cent, already reaching the maximum duty level.

“Raising tariffs even more is not appropriate. The remaining viable measure is to implement ‘technical barriers’ but this responsibility rests with the MoIT, outside the jurisdiction of the finance ministry,” Tưởng said.

Nguyễn Minh Đức from the legal department of the Việt Nam Chamber of Commerce and Industry (VCCI) told Tuổi trẻ (Youth) newspaper the proposed could be in violation of Việt Nam’s commitments to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Đức said  Việt Nam maintains an export tariff on raw minerals during negotiations, but once CPTPP comes into effect Việt Nam would have to eliminate them.

“Any measure to limit export of minerals must be carefully studied,” Đức said.

He also said that Việt Nam’s tax policies on mineral exports have seen “rapid swings” in recent years. This uncertainty did not encourage long-term investment, giving rise to slapdash short-term mining activities.

“Natural resource management must be based on the three pillars of revenue transparency, selling at the best price and developing the domestic processing industry,” he added.

Technical standards

Other experts on mining said the proposal isn’t new, but the ban has not made it into actual policies because there have not been technical standards for what constitutes “unprocessed”, “processed” or “highly processed” minerals.

Mineral expert Nguyễn Thanh Sơn said there are different levels of processing for raw minerals, and not all of them need to be highly processed. As a result, a uniform policy for all types of minerals is not advisable – each mineral should be considered independently.

“Take bronze for example, which only needs moderate processing to fetch a decent price. On the other hand, the more refined titanium is, the higher price we can get,” Sơn said.

Trần Văn Miến, geology head of the General Department of Geology and Minerals of Việt Nam, favours the raw mineral export ban but agreed there should be processing guidelines for some minerals.

“I think the authorities should issue a document which details optimal processing levels, financially speaking,” Miến said. “Of course, there couldn’t be separate regulations for all types of minerals, but it would be a basic management tool to ensure a balance between mineral exploitation, processing and environmental protection.”

Limit low-tech mining

Previously, Prime Minister Nguyễn Xuân Phúc has ordered limiting small-scale and low-tech mining projects of minerals such as gold, copper, nickel and molybdenum, which “causes pollution and losses to the country’s natural resources.”

Phúc urged the formation of large-scale mining enterprises that make use of advanced technologies – especially new processing and environmental protection techniques.

Recently, mineral export has been on the rise. According to latest reports from the Customs Authority, the country had exported more than two million tonnes of ore by July 15, netting US$101 million in revenues.

75 per cent of the exported ore, totaling 1.5 million tonnes, was sent to China.

Việt Nam’s mineral export to China has been criticised lately due to the perception that the selling price is under market value, while Việt Nam still imports a vast amount of minerals from China.

Most of the minerals exported to China are in their raw, unprocessed form, meaning that the relatively minor trade gains they provide are outweighed by the level of ecological damage caused by mining activities.

VNS (Source: vietnamnews.vn)