While the Vietnam National Coal and Mineral Industries Corporation , or Vinacomin, has confirmed that it only exports coal types that are rarely used domestically, the Ministry of Industry and Trade’s figures show that this is not entirely true.
Vinacomin has exported nearly 10 million tons of coal to be used in thermo-power generation, and is likely to import this type of coal in the future, the ministry said in its report on the coal exporting plan in 2011 – 2015 that was recently submitted to the government.
Responding to the issue, Vinacomin chairman Tran Xuan Hoa said that using the coal which it has exported at US$300 a ton only to fuel the thermo-power plants is “too wasteful.”
Coal dust No 4 and 5, which Vietnam is expected to begin importing in 2015 due to the domestic supply shortage for fueling thermo-power plants, accounted for as much as 14 percent of the total coal exports of Vinacomin last year.
The figures were even higher in 2009 and 2010, at 22.3 percent and 21 percent, respectively.
In 2010 alone, Vinacomin exported more than 18 million tons of coal, pocketing $1.4 billion.
Meanwhile, the Ministry of Industry and Trade said that out of the 17 million tons of coal exported last year, coal dust No 6 and poor-quality coal accounted for 12 million tons, although Vinacomin said it only exported “good coal.”
To Quoc Tru, director of the Vietnam Energy Consultancy Center under the General Department of Energy, said most thermo-power plants in the country are using coal dust No 5 and 6 for production.
“We will have to import these types of coal in 2015 as Vinacomin will fail to maintain supply,” said Tru.
“In June 2011, Vinacomin imported the first batch of this coal to prepare for a 5 million ton plan five years later.”
Still lamenting of hardship
Although Vincomin claims an export price of $300 a ton, figures obtained by Tuoi Tre show that the actual rates are not that high.
The average export price for coal in the first quarter of this year is only $85.6 a ton, down by $6.5 a ton compared to the full-figure last year, according to the General Department of Energy.
However, when global coal prices slumped, and while experts demanded that Vinacomin cut its exports to save natural resources, the coal giant instead called on the government to reduce the exporting tariff from the current 20 percent to zero as it is in a tough spot with 7.5 million tons of coal in stock.
In explaining the plan of high exports, Vinacomin has repeatedly said that it is to make up for the loss it incurs when it has to sell coal under cost prices to the power sector, as ordered by the government.
However, the General Department of Energy said Vincomin only incurred a VND5 trillion loss for selling at subsidized prices, while it reaped a huge VND6.8 trillion profit from exporting coal in 2011.
From its foundation in 1995 to the end of 2009, Vinacomin has exploited a total of 361.5 million tons of coal.
The company has repeatedly lamented of capital shortages to seek permission to increase exports.
While Vinacomin is expected to need around $2 billion a year for its operation and investment between 2011 and 2015, the public has wondered how much coal will have to be exported before this complaining can stop.