China to Soon Cut Coal Import VAT and Port Charges

China, the world's largest coal producer and consumer, may soon lower value-added tax (VAT) and port charges on imported coal to encourage the country's coal imports to ensure an effective supply of the fuel, said Hao Xiangbin, a senior official with the China Coal Industry Association, sources reported.

Hao said that the Chinese government has been studying the adjustments of VAT and port charges on coal imports.

Currently, the Chinese government imposes a 17% VAT on coal imports, which was adjusted up from 13% on Jan. 1, 2009. Port charges for coal imported at Chinese ports range from RMB 30 to RMB 40 per metric ton, with Guangzhou port at RMB 38.5 per metric ton, and Shanghai port at RMB 32.5 per metric ton.

Hao added that China's net coal imports will remain high this year, likely hitting 150 million metric tons, and are expected to increase in 2012 and 2013.

In the first six months, China's coal imports amounted to 70.49 million metric tons, down 11.8% year on year, and its coal exports fell 13.7% year on year to 8.75 million metric tons. China saw its net coal imports decrease by 8.04 million metric tons or 11.5% year on year to 61.74 million metric tons.

Hao estimated that the country's coal demand in the second half will be higher than that in the first half, and that its total coal demand for 2011 will reach 3.73 billion metric tons, up 9.7% year on year.

China's raw coal output reached 1.77 billion metric tons in the first half of this year, representing a year-on-year increase of 13%, and its coal sales volume reached 1.71 billion metric tons during the period, 14% more than a year ago.