VIETNAM faces an acute shortage of electricity which will primarily be solved by more coal-fired power stations owing to the limited potential for new hydro plants and limited availability of gas. This will increase demand for coal and in anticipation the government has raised the coal export tax from 15% to 20% with further increases expected.
The government is seeking to increase domestic coal production but it is almost certain that imports will still be needed. Most of the extra need for coal is being met by imports from Indonesia and Australia, however these avenues look increasingly difficult with Indonesia considering increased taxes on coal exports while Vietnam will have to compete harder with India, China and Japan for imports.
Vietnam has about 52 active coal mines and all are majority owned and controlled by state-owned Vietnam National Coal and Mineral Industries Group (Vinacomin). It almost completely controls coal mining companies in every aspect of their operation, from the amount produced to the price they sell for.
The majority of Vietnam’s reserves lie beneath the Red River basin, which is estimated to have 20 times more coal than Quang Ninh, the country’s largest coal mining area. However, according to preliminary geological survey results, this coal lies far underground and covers 3500sqkm. To exploit these reserves would require massive investment and foreign technological expertise with major environmental costs.
All Vietnam’s listed coal mines are in the Quang Ninh area but because they are generally open-cast mines which generate air and water pollution, coal is being mined at a large environmental cost while the open cast mines are fast being depleted.
With difficult global economic conditions expected to continue into 2014, Vinacomin is planning flexibly. It has set consumption goals of 43 million tonnes and 41.5 million tonnes, correlating with its production targets of 46 million tonnes and 43 million tonnes respectively.
Regarding the strategy for development of minerals in Vietnam, Vinacomin chairman Tran Xuan Hoa told a recent workshop that in the future, due to the development demands of the economy, Vietnam’s mining industry needed to continue to conduct research and exploit such important types of minerals as copper in Sin Quyen, iron in Thach Khe, bauxite in Dak Nong and Lam Dong, coal in the Red River Delta and a number of new oil and gas operations on the continental shelf.
He says because many types of traditional minerals have entered an exploitation phase which is not as advantageous as earlier, it is necessary that scientists and technical officials take a step ahead and think of scientific and technological solutions in order to improve the effectiveness of Vietnam’s mining industry.