Vietnam needs in energy will depends on its capicity to import coal

It turns out to be not an easy thing for Vietnam to import coal, because it needs big tonnage ships and deep water ports, while the supply remains limited.
The Vietnam Coal and Mineral Industries Group (Vinacomin) imported 10,000 tonnes of coal last month, the first consignment of imports in the long term coal import strategy. The import has helped Vinacomin understand that it is not an easy thing to import coal in big quantities, because it requires suitable infrastructure conditions.

“The import deal has allowed Vinacomin to understand about the infrastructure conditions we need to have if we want to import more coal,” said Vu Manh Hung, deputy general director of Vinacomin.

Vinacomin, which has been assigned by the government to import coal to provide to power plants, well understand that the 10,000 tonnes of imported coal would make nothing if compared with the big volume of coal needed for power plants.

Experts say that a power plant with the capacity of 1000MW needs 3.2-3.5 million tonnes of coal a year. As such, in order to just serve a 1200MW power plant, Vietnam will need to have one goods-carrying trip a day, if it only uses barge like it did with the latest import consignment. Meanwhile, if it wants to use big tonnage ships, it will have to build suitable deep water seaports, which will cost a lot of money.

According to Dr Nguyen Thanh Son, director of the Song Hong Energy Company, in order to import more than 10 million tonnes of coal a year, Vietnam needs to have the ships with the minimum tonnage of 50,000 tonnes and the seaports with the depth of over 10 meters.

“In order to be able to receive coal at the ports in Australia, we need to have 100,000 tonne ships. Besides, we will have to pay for the carrying of coal from big tonnage ships which can stay on deep water areas to the power plants located far in mainland,” Son said.

As such, the import of coal in big quantities will be far different in the scale, which cannot be compared with the receiving of 10,000 tonnes of coal lately.

While calculating the investment costs for the Vinh Tan Thermopower plant in Binh Thuan province, investors planned to build a port for importing coal capable to receive 12 million tonnes in the first phase. It was estimated that such a port will need the cost of 200 million dollars.

Since it is unfeasible to seek the money for building the port from the state budget, the investor decided that the investment capital will be deducted from the coal prices and counted on the electricity prices. This means that the electricity production costs will be higher.

Experts believe that Vietnam should rely on the two main markets – Australia and Indonesia, because it will be much more costly to import coal from far markets, such as Russia.

However, it is really not easy to import coal from Australia and Indonesia, according to Dr Son. Vinacomin seems to be unable to import more than 30-50 million tonnes a year, while Vietnam’s demand is much higher than the figures.

“While Vietnam’s demand for coal increases to 100 million tonnes a year, slated for 2025 or 2030, the Chinese demand would be 1600 million tonnes a year,” Son said.

“Meanwhile, China and Japan also seek coal supplies from the above said markets. Meanwhile, China and Japan have bigger advantages than Vietnam in importing coal. They have long term investment strategy, higher efficiency in using coal. They also have bigger ports and can purchase coal at higher prices,” he continued.

The figures released by Vinacomin showed that it would be better to use import coal for power plants than using domestic products. The import price was 73.6 dollars per tonne, and if counting on other expenses, the cost price would be 100.6 dollars per tonne. This is the coal similar to the 10b2 coal that Vinacomin is exporting at 108.6 dollars per tonne.

Meanwhile, with the transportation fee of 14 dollars per tonne to carry coal from Hon Gai to Cat Lai, the price would be 122 dollars per tonne.


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