Vietnam Grants TKV Special Mechanism for Mineral Resource Management

Overview

The Vietnamese government has issued Decree 325/2026/NĐ-CP, granting TKV (Vietnam National Coal and Mineral Industries Group) special mechanisms for operation and financial management. The decree centralizes control over mineral resources, gives TKV pricing authority within its internal market, and provides a framework to handle failed exploration costs. This policy shift is significant for TKV, one of Vietnam’s largest state-owned enterprises, as it strengthens its role in the country’s strategic mineral sector.

Key Facts

• Decree 325/2026/NĐ-CP was issued by the government, effective from October 5, 2026, and applies from fiscal year 2026.
• TKV employs approximately 95,000 workers, making it one of the largest state-owned employers in Vietnam.
• In the first seven months of 2026, TKV’s total revenue reached VND 109,297 billion, with pre-tax profit of VND 3,567 billion.
• The decree grants TKV unified management over exploration, mining, processing, and use of coal, bauxite, and other strategic minerals.
• TKV is authorized to decide and adjust prices for goods and services within the “TKV market,” excluding items with state-set prices.
• TKV can handle failed exploration and investment costs using after-tax profits, under specific conditions such as insufficient reserves or policy changes.
• Meal allowances for workers (mid-shift and rationed meals) can be accounted as production and business costs.

What Happened

The Vietnamese government issued Decree 325/2026/NĐ-CP, establishing a special operational and financial management mechanism for TKV. According to the decree, TKV will uniformly conduct survey, exploration, mining, processing, and use of mineral resources, including coal, bauxite, and other strategic minerals. For mines directly licensed to TKV, the group manages the entire chain from exploration to consumption, and can hire subsidiaries for mining via contracts while acting as the sales hub.

For mines licensed to subsidiaries, TKV remains the management focal point through annual business coordination plans, ensuring unified technology and sales. Notably, TKV gains the right to decide and adjust prices for goods and services within its internal market, except for state-priced items. The decree also allows TKV to use after-tax profits to cover costs of failed exploration projects, such as when reserves are insufficient or technology is unavailable, and to handle certain failed investment costs due to policy changes. The decree takes effect on October 5, 2026, and applies from fiscal year 2026.

Market Context

TKV is not listed on any Vietnamese exchange (HOSE, HNX, or UPCOM), as it is a state-owned conglomerate. However, its subsidiaries, such as Vinacomin – Vang Danh Coal JSC (TVD) and Vinacomin – Deo Nai Coal JSC (TDN), are listed on HNX. The decree is expected to enhance TKV’s operational efficiency and financial flexibility, potentially benefiting its listed subsidiaries through improved coordination and pricing power. The broader Vietnamese mining sector has been under regulatory scrutiny, and this decree signals a consolidation of state control over strategic minerals, aligning with national energy security goals.

Strategic Significance

For long-term investors, Decree 325/2026/NĐ-CP reinforces TKV’s monopoly-like position in Vietnam’s strategic mineral supply chain, particularly coal and bauxite. The pricing authority within the “TKV market” allows TKV to optimize margins across its subsidiaries, potentially improving profitability. The mechanism to absorb failed exploration costs reduces financial risk for high-risk projects, encouraging continued investment in mineral exploration. This policy also aligns with Vietnam’s strategy to secure domestic energy and raw material supplies, reducing import dependence. Investors in TKV’s listed subsidiaries should monitor how the group’s centralized pricing and sales coordination affect their revenue and profit allocation.

What to Watch

• Implementation details of the decree in TKV’s 2026 annual business coordination plans, expected in late 2026.
• Quarterly financial reports from TKV’s listed subsidiaries (e.g., TVD, TDN) for evidence of improved margins or revenue stability.
• Any adjustments to coal and bauxite prices within the TKV market, which could signal pricing power.
• Government decisions on specific failed exploration projects under the new cost-handling mechanism.
• Potential spin-offs or listings of TKV units, as the decree may enhance their financial attractiveness.