Agence France-Presse . Beijing

Vietnam, the biggest supplier of coal to China, will cut exports to its giant neighbour nearly in half in 2008 to meet rising demand from its own power plants, state media reported Tuesday.

Vietnam will reduce sales to China to 13 million tonnes this year, the 21st Century Business Herald said, citing an unnamed Vietnamese government official.

Previous reports in the Chinese media said Vietnam's coal exports to China last year totalled 24.6 million tonnes. Vietnam's industry ministry has recommended to the country's prime minister a total halt in coal exports after 2015, according to the report in the 21st Century Business Herald.

Analysts said a decline in the exports, which accounts for a rather small share of China's total demand, was unlikely to have major impact on China even though Vietnam was its biggest coal supplier. 'The impact will be quite small,' Wang Shuai, a Beijing-based analyst with Orient Securities, told AFP.

This is less than one per cent of China's output, as official figures showed it produced 2.5 billion tonnes of coal last year, up 8.2 per cent from a year ago. But the 21st Century Business Herald said a cut in supply from Vietnam would threaten the operations of power plants in southern China's Guangdong province and the Guangxi region.

Guangxi imported 14.0 million tonnes of coal in 2007, with 13.3 million tonnes sourced from Vietnam, while Guangdong imported 14.6 million tonnes last year. Separately, the paper said that Guangdong Yudean Group — the top power producer in Guangdong — has suspended coal negotiations with Vietnam as Vietnamese suppliers are demanding a 40 per cent hike in export prices.

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