This information was announced at the workshop “Vietnam – Indonesia Coal Industry – Ensuring Economic Development and Energy Security” jointly organized by the Indonesian Embassy in Hanoi and Vietnam Chamber of Commerce and Industry.

The presentations at workshop showed that, in the first five months of 2017, Vietnam imported 5.57 million tons of coal, worth US$ 577.218 million, decreased 4.7 percent in volume but increased 58.3 percent in value.

According to Ngo Son Hai, Deputy General Director of EVN, in 2016 EVN started to import coal for Duyen Hai 3 thermal power plant (TPP) – the first plant under EVN using import coal. At present, the Government assigns EVN to build and manage Vinh Tan, Duyen Hai 3 and 4 (expansion) TPP which use import coal. Ensuring steady coal supply for the Duyen Hai 3 TPP is an issue that EVN is particularly concerned about.

Currently, besides EVN, in Vietnam there are TPPs of foreign investors, Petrovietnam, Vinacomin VN, TKV also using import coal.

According to the project “Vietnam Coal Industry Development Planning to 2020 and project till 2030”, by 2020 coal demand for domestic production will reach about 75 million tons. However, domestic coal source can meet only about half of the demand. Therefore, import coal will reach tens million tons by 2020 and up to about 120 million tons by 2030.

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 To the end of the first quarter of 2017, the import coal amount in the country was 3.61 million tons worth $410 million. The import coal mainly came from Russia (1.26 million tons) and Indonesia (1.07 million tons).

According to the Power Planning, Vietnam, will import coal for thermal power plants with an annually increasing amount. Especially, the import coal amount will increase up to tens of million tons per year from 2020.

However, increasing import coal will have a lot of implications for the domestic coal industry. According to recent information from Ministry of Industry and Trade (MOIT), currently, production and business of the coal industry is facing many difficulties as domestic coal has to compete with low price import coal.

According to MOIT, to offset the cost suitable for the coal consumption market, Vinacomin has adjusted increasing coal prices by 3% -10.7% (depending on coal types). However, up to now no customer has signed contract on coal purchase in 2017, because of they do not agree with the new coal prices applied from 24/4/2017 in accordance with Decision No 3005/QD-TKV of Vinacomin.

Soucre: Vietnam Energy

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The above data have show that the growth rate of coal import in 8 months underwent a sudden mutation by both volume and value as 1.2 million tons per month, respectively over US$ 75 million per month.

Russia, Indonesia and China were the largest coal supplies for Vietnam.

Russia, Indonesia and China were the largest coal supplies for Vietnam. The concrete situation of coal import from three counties was as follows: from Russia – 2.8 million tons with an average rate of about US$ 63/ton valued over US$ 179 million; from Indonesia – 1.8 million tons with US$ 44/ton valued US$ 80 million; and from China – 1.4 million tons with US$ 71/ton valued US$ 100 million.

With identifying the domestic coal demand is more and more growing, the Government has approved the project on the Coal Industry Development Plan of Vietnam by 2020 with an outlook up to 2030 in which the coal demand is expected: 56,2 million tons by 2015, 112,3 million tons by 2020, 145,5 million tons by 2025 and 220,3 million tons by 2030.

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This event has helped the company engaged in the import and distribution market of coal. According to Mr. Tran Van Nghia – Chairman of the Board of the Southern Otran – this agreement comes into effect through out the periods of 2 years (2015 – 2016). At the present time, hundred thousands tons of coal have been imported and distributed to the market, which supplies timely to the shortage of coal due to the nature disaster at Quang Ninh.

Leadership representative of Otran Energy and Mercator Group signed the cooperation agreement

According to the Ministry of Industry and Trade, the country’s total coal demand is 41.8 million tons in 2016, which is projected to be 74.9 million tons in 2020 and 143.7 million tons in 2030; while Vietnamese intrinsic ability to exploit coal is 43.8 million tons in 2016, 50.4 million tons in 2020 and 57.5 million tons in 2030. Therefore, the demand for coal importing from other countries in 2020 is expected to be 26.5 million tons and 88.2 million tons in 2030 and will continue to increase in the next few years when the thermoelectric plant goes into operation. In addition, in the field of manufacturing, the demand for coal also steadily increased for many years.

The event marked the participation of Otran in the coal market

Therefore, the company decided to enter the market based on the existing advantages of the deep water seaport system and large warehouses nationwide. Furthermore, Mercator Group – Otran’s partner – owns 4 coal mines in Indonesia with a significant source of coal which is more than 100 million tons and another coal mine in Mozambique with an estimated reserve of about 3 billion tons and many licences for exploring and mining coal, oil & gas in India, Indonesia, Myanmar and Africa. This  group has rich sources of high-quality coal with reasonable prices, which ensures that Otran – Top 50 Large Private Enterprises in Vietnam – can maintain a large and diverse coal supply for the market. To ensure the financial sources, at the signing ceremony with Mercator Group, Otran also signed a financial cooperation agreement with BIDV and Agribank.

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