VINACHEM

VietNamNet Bridge – Facing a lack of coal for power generation, Vietnamese state-owned enterprises are rushing to look for foreign coal suppliers.

Dinh Quang Tri, Deputy General Director of the Electricity of Vietnam (EVN), noted that enterprises are importing coal themselves to run thermal power plants instead of relying on the Vietnam Coal and Mineral Industries Group (Vinacomin), the only domestic coal supplier.

According to Tri, it was very difficult to import coal two to three years ago, when the world market was hot because of high demand from China. However, things are different now.

As China has shut down many power plants run with outdated technologies, the demand from China has decreased.

“It’s now a buyer’s market,” Tri said. “The supply is very abundant with the overproduction in Australia and Indonesia. The coal price has dropped to $80 per ton”.

Three EVN’s power plants with the total capacity of 3,000 MW are now using imported coal, including the expanded Duyen Hai 3 (600 MW), Vinh Tan 4 (1,200 MW) and Duyen Hai 3 (1,200 MW).

On average, a 1,200 MW power plant would need some 4 million tons of coal per annum, which means that EVN would need to import 10 million tons of coal every year.

The Vietnam National Oil and Gas Group (PetroVietnam) has also been looking for coal supply sources itself instead of expecting supply from Vinacomin.

PetroVietnam is running five thermal power plants with the total capacity of 6,000 MW. Of these, three would run with imported coal, including Long Phu 1, Quang Trach 1 and Song Hau 1.

A contract was signed by PetroVietnam and an Australian coal company in February under which PetroVietnam would import 3 million tons of coal a year.

Observers noted that power generators have got so “fed up” with Vinacomin that they now are trying to seek import supply sources themselves instead of using Vinacomin’s coal or importing coal through Vinacomin.

Vietnam anticipates that it will lack coal to run domestic thermal power plants after 2015.

At least 1/3 of its thermal power plants will have to run with coal imports, because the domestic coal supply will be just enough for plants in the northern and central regions.

Vinacomin has been assigned by the government to look for foreign coal supply sources to prepare for the coal import plan to start after 2015. It is expected that Vietnam will import 6-7 million tons of coal in 2016 to serve domestic power generation.

However, Vinacomin admitted that the coal import plan implementation is making no headway. Le Minh Chuan, Chair of Vinacomin, said the biggest problem now is that Vinacomin does not know how much coal power generators need.

“Enterprises have to register the coal volumes they expect to consume. We will suffer if we have to import coal but cannot sell to domestic consumers,” Chuan said.

Tri of EVN said some miners in Indonesia and Australia have offered to sell coal to EVN at low prices, therefore, there’s no need to import coal through Vinacomin. Meanwhile, EVN cannot say for sure how much coal it needs because Vinacomin does not provide information about the sources of coal and the import prices.