Vietnam will gradually cut coal exports as local demand surges and supply declines, a government official said at the end of May. Government policy is to ensure sufficient coal supply for the country, and for the power sector in particular, Minister of Industry and Trade Vu Huy Hoang said. “But the extent of export cuts and the coal varieties to which they will be applied will have to be considered carefully,” he said.
Hoang said there are many kinds of high quality coal that are not used at home but can fetch good export prices. “Moreover, the coal industry is in need of capital. and exports can bring back money to buy equipment and machinery for the industry. Non-renewable energy sources including coal, gas and oil are running out and if there is no new discovery, it will be difficult to find energy for the country in the next several decades, including for power generation,” he said. “From 2015, when local demand surges sharply and a number of new power plants start production, the country will not only stop exporting coal but will have to import as well.”
We’ve had the BRIC countries (Brazil, Russia, India and China – the last three all important coal producers). Now we have the second tier, the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa). Once again there are important coal producers here. There was not editorial space to include Vietnam in International Mining’s global coal review in August, so it is published here.
State-owned Vietnam National Coal and Minerals Industries Group said in March the country will have to start importing coal in 2013 with an annual volume of up to 20 Mt. Deputy General Director Nguyen Van Hai: “We are planning to work with our partners in mining projects overseas so that we will be able to bring coal to the country.”
The national coal monopoly, also known as Vinacomin, has been allowed by government to increase prices. According to Vinacomin, a price hike is necessary as production costs would surge due to deeper mining. Salaries for miners also need to be raised this year, it said. Coal prices supplied to Electricity of Vietnam have been raised by between 27 and 48%, lower than Vinacomin’s price hike proposal of up to 149%. Hai said after the hike Vinacomin would still have to suffer losses as the new prices are still 20-30% lower than production cost and 50-60% lower than export prices. “We hope the government will allow us to raise prices of coal supplied to the power sector at the end of this year so that production cost can be recouped.”
Domestic coal consumption is projected to climb to 90 Mt in 2015 from just under 20 Mt this year as a series of new thermal power plants become operational. Vietnam is expected to produce 40 Mt of coal this year, around half of which will be exported.
