Vinacomin to import coal to meet demand

With the limited coal reverse in Dong Bac (North East) basin, Vietnam Coal and Mineral Group (Vinacomin) expectes that it could not meet the domestic coal demand by 2015, for which it will be forced to import about 6 million tons of black gold a year.
In Red River basin, the trial mining will be only conducted from 2018 at the earliest. Therefore, coal import to balance domestic demand is going to be for sure.

Reportedly, the first shipment of 9,500 tons of coal from Indonesia arrived in Cat Lai port (Dong Nai province), imported by Dong Bac Coal-Mineral Investment Joint Stock Co (under Dong Bac Coal Mineral Corp) on June 13. This was seen as the first coal shipment opening the following shipments of Vinacomin this year.

Deputy General Director of Vinacomin, Nguyen Van Bien said that the first shipment will be used to feed the bauxite refiner in Bao Loc (Lam Dong highland province). Dong Bac Coal-Mineral Investment Joint Stock Co was appointed to discuss the entire import plan with Indonesian partner to ensure the long term coal supply with competitive price.

Currently, with the coal import price from Indonesia in addition to transportation costs, the supply to thermo power plants in the central and southern regions will be more economic compared with mining and transport costs from northern ores, he added. Factually, Vincomin proposed the government to use mainly imported coal source for Power Planning 7 of coal-fed thermo power plants in the southern region.

Vinacomin signed a principle agreement with some long term coal importers namely Indonesia, Australia…In his point of view, until 2015, the group will have to import 5.8 million tons for electricity production.

Ministry of Industry and Trade said it was completing the country’s coal sector development planning to 2020 and vision to 2030. Also, the Power Planning 7 has been under the Prime Minister’s consideration.

In the end of Q1 of 2011, the ministry predicted that Vietnam needs to import about 7.7 million tons of coal by 2015 for electricity production and in the period from 2011 to 2015, the coal export will reduce from 17 million tons (estimated in 2011) to 3-4 million tons in 2015. Bien also confirmed that Vinacomin will only export 16.5 million tons within this year, against 17.8 million tons exported last year, and 3 million tons by 2015.

Minister Vu Huy Hoang gave two reasons that’s why Vincomin still recommended to export three million tons of coal in 2015 while importing 5-6 million tons as mentioned above. Firstly, coal volume that Vinacomin exported for years was mainly kinds of non-demanded or low-quality domestic coals. Secondly, coal price for domestic consumers has been equal to only 60% of the production costs.

From March 1, 2011, electricity price was adjusted up 15.28% whereas coal selling price to electricity producers was increased only 5%. In order to ensure financial balance, Vinacomin now still takes turnover from exports to offset domestic coal prices. Nguyen Thanh Bien remarked, from now to 2015, the group needs to invest $3 billion (15 trillion dong per year) to upgrade current ores and develop new ones with a view to increase mining output. – Vietbiz24

Tags: Vietnam Coal, Vietnam Coal imports

Posted by VBN on Jun 16 2011. Filed under Mining & Metal. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry