Nguyen Khac Tho, deputy head of the general Department of Energy, told Tuoi Tre that state-run coal giant Vinacomin has to export coal in order to obtain capital for operation, despite the fact that the country will have to begin importing coal in 2015.
According to the Ministry of Finance, Vinacomin, or the Vietnam National Coal and Mineral Industries Corporation, has exported nearly 10 million tonnes of the types of coal which Tho said the country has little to no demand for.
“Given the 48 billion tonnes of coal Vietnam has in reserves, what has been exported is not considerable,” Tho told Tuoi Tre in an interview.
However, Tho also admitted that Vinacomin has in fact exported certain types of coal that are set for imports in the future.
“As stated, the domestic demand for such types of coal is far lower than Vinacomin’s supply capacity, and we thus have to export to avoid unsold stock,” said Tho.
“However, as of 2015, when domestic consumption increases as thermo-power plants become operational, we will have to import coal.”
When asked why Vinacomin does not focus on creating coal reserves to meet demand in 2015, Tho said exports should be pursued now to create capital for the corporation.
“In order to ensure an adequate supply for domestic demand in 2015, Vinacomin needs annual capital of VND42 trillion (US$2.01 billion), so it needs to export coal to have this investment capital,” he explained.
Importing is not simple
Tho said Vietnam is expected to import around 5 million tonnes of coal in 2015, a figure that will gradually rise in the following years.
The Ministry of Industry and Trade has assigned Vinacomin to take the main role in importing coal. It has signed a memorandum of understanding with some exporters from Indonesia, Japan, and Australia, said Tho.
Tho said it is not easy to import coal, given the increasing global demand for the mineral.
“Hence, we have ordered Vinacomin to be more active in signing import contracts, and also consider exploiting overseas coal mines, or buying shares in international mining companies,” he said.
As Vinacomin is likely to import coal even from Japan, a country which does not export the mineral, insiders are concerned that Vietnam will have to pay high prices for the imports.
“Yet this is a necessary solution to ensure imports,” responded Tho, adding that they will of course carefully consider economic effectiveness before officially inking import contracts.