Vietnam: Gov’t urges competitive coal market

Vietnam: Gov't urges competitive coal market

The Government has assigned the Ministry of Industry and Trade (MoIT) to build a development roadmap for a competitive coal market as there are new coal suppliers.

The State would gradually reduce its control in the market while ensuring supply and demand balance.

Deputy minister Hoàng Quốc Vượng held a meeting with the Việt Nam National Coal and Mineral Industries Group (Vinacomin) and Đông Bắc Corporation in the northern province of Quảng Ninhon on Thursday to study the roadmap to ensure national energy security for socio-economic development.

The ministry would submit the proposal to the Government for approval with an aim to have a coal market which ensures local households' consumption, prices follow supply and demand and export markets are actively built.

Following the meeting, the ministry would also work with coal consumption households to resolve the industry's difficulties. It would submit documents to the Government instructing Electricity of Việt Nam (EVN) and Việt Nam National Oil and Gas Group (PetroVietnam) to continue buying coal from Vinacomin and Đông Bắc Corporation this year.

The ministry would also allow the export of coal that does not depend on quota to help Vinacomin and the corporation balance their finances.

Vượng said coal demand has been diversified. EVN and PetroVietnam have developed several thermo-power plants with consumption of some 10 million tonnes of coal. Vinacomin also has its own thermo-power plants and BOT projects.

It is forecast that coal demand for electricity production could reach more than 100 million tonnes by 2030. Việt Nam would have to import some 80 million tonnes of coal, while local production would be 50 million tonnes per year.

Therefore, the ministry said the Government should have new policies for market development.

Vinacomin's general director Đặng Thanh Hải said the group has signed nine long-term contracts to provide coal for thermo-power plants.

Vinacomin suggested that the Government allow it to be active in building production and business plans based on long-term contracts to ensure suitable inventory and effectiveness.

Hải proposed to export on a long-term basis coal which local thermo-power plants do not need for electricity production to help Vinacomin be active in consumption markets.

He added that Vinacomin and EVN's power plants have not yet reached an agreement on coal selling prices for the period of December 26, 2016 to February 28, 2017, which was why the two sides have not signed a coal purchasing contract this year.

Earlier, EVN proposed to reduce two million tonnes of coal buying from Vinacomin to choose from two new units.

The reduction according to EVN's proposal would make Vinacomin's coal production costs increase and reduce effectiveness, he added.

The group asked the ministry to tell PetroVietnam and EVN not to buy anthracite coal from other units this year to avoid losses for Vinacomin.

In addition, the ministry should have policies to encourage use of locally produced anthracite coal and limit imported coal as Vinacomin has claimed unfairness in taxes and fees.

Phương Kim Minh, deputy general director of the Đông Bắc Corporation, also proposed that the ministry stop new suppliers from being added for thermo-power plants to ensure national energy security.

Minh also asked the Ministry of Finance to provide guidance o EVN, Vinacomin and the corporation to agree on coal prices sold for power production.

The corporation also asked to export inventory coal for which there is no demand in the local market.

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Link to Original Article: http://vietnamnews.vn/economy/380613/govt-urges-competitive-coal-market.html#elqEh5XDvEvUyyuD.97

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com