Vincomin brushes off questions of profiteering on coal imports

Vinacomin’s recent import of coal is to ensure national energy security and not corporate self-interest, an official from the company said.

After receiving the first batch of 9,570 tonnes of coal imported from Indonesia on June 13, the state-owned Vietnam National Coal-Mineral Industries Group (Vinacomin) has faced several inquiries about the real purpose behind the imports.

Vu Manh Hung, the Deputy General Director has said that its coal imports are aimed at serving increased domestic demand, and that they were done in accordance with the Prime Minister’s approval.

According to Hung, estimates said that Vietnam would face a shortage of coal by 2015, and that the shortfall will worsen in the following years.

The country is forecast to have to import around 6 million tonnes of coal annually in the next five years, and the figure will rise due to the added demand of thermal power plants, he said.

DTiNews interviewed Mr. Vu Manh Hung, Deputy General Director of Vietnam National Coal-Mineral Industries Group (Vinacomin).

Vietnam has started importing coal while at the same time increasing coal exports. Could you comment on this situation?

Vietnam has been exporting anthracite coal that is higher quality than other types of coal and is more expensive. The country has yet to foster the types of industries that need this type of coal, such as metallurgy and electrode manufacturing.

Vinacomin has also exported a certain amount of very low-quality coal in order to boost revenues. Meanwhile, the majority of coal imports will be bituminous coal, whose quality is higher than lignite coal but of lower than anthracite. This kind of coal is suitable for thermal power plants.

Vietnam has started importing coal late in the game. How can we compete with other importers?

Even though Vietnam is a newcomer compared to Japan, South Korea, India, and China; we see Indonesia and Australia as potential suppliers.

However, the nation may find it hard to secure large-scale coal import contracts with these countries because Japan, South Korea and Taiwan are already established as their major partners.

In order to have better access to foreign coal resources in the long-term, we will have to make efforts to acquire mines in other countries, or buy stakes in foreign coal companies.

Is Vietnam financially capable of joining the game?

In order to increase coal imports to the rate needed to satisfy demand, capital is a must. Vinacomin, together with some of its partners, has drawn up plans to raise funds.

Apart from plans for coal imports, how will Vinacomin develop its major coal mines in the time to come?

In order to minimise coal imports, Vinacomin has been making efforts to develop its coal mines. The Khe Cham 3 mine, with a capacity estimated at 2.5 million tonnes per year, is scheduled to become operational by late 2014 or early 2015.

The coal supply is expected to increase in 2017, when two more pit coal mines become operational. We estimate that Nui Beo will have a capacity of 2 million tonnes a year, and Khe Cham, we estimate, will have annual capacity of 3.5 million tonnes.

The group will also speed up the implementation of some new coal projects, including Nga Hai Quang Hanh, Khanh Hoa and Red River coal basin.

Tags: Vietnam Coal, Vietnam Coal imports, Vincomin