VIETNAM’S growing power sector is driving demand for coal with domestic supply struggling to keep pace, requiring greater emphasis on imports from Australia, Indonesia, Russia and China.

Vietnam National Coal and Mineral Industries (Vinacomin) sold nearly 8.7 million tonnes of coal to domestic consumers in the first quarter of 2016, up 6.1% from the same period of 2015. It aimed to sell 10 million tonnes in the second quarter, an increase of 14.9% on quarter one.

State-owned Vietnam Electricity, or EVN, the national power generation and distribution company, added more than 3400 MW of electricity generation capacity from new coal-fired power plants in 2015. EVN data shows that these new plants consume nearly 10 million tonnes of coal annually.

In the first two months of 2015, Vietnam imported 2.4 million tonnes of coal, an increase of 295.9% year on year. The main sources were Australia with 904,211 tonnes, up 357.9% year on year; Russia 658,920 tonnes, 22 times higher than the same period of 2015; China 436,510 tonnes, more than eight times higher than January-February 2014; and Indonesia 380,353 tonnes, up 58.7% year on year.

The country’s power sector is expected to be the biggest buyer of coal, consuming about 33.2 million tonnes in 2016, or about 69.9%, of the estimated total coal consumption in the year.

Power sector consumption is expected to rise to 64.1 million tonnes, or 74.2% of the total by 2020, about 96.5 million tonnes or 79.4% of the total by 2025 and 131.1 million tonnes or 83.7% of the total demand by 2030.

Meantime, while there is a lack of coal for domestic power generation, Vietnam still plans to continue coal exports. The country’s Ministry of Industry and Trade (MOIT) has asked for government permission for the export of lump coal and dust coal in the 2016-2020 period.

If the proposal is approved, Vietnam would export high-quality expensive coal products and import low-quality products for domestic thermal power plants.

MOIT data shows that Vietnam exploited 40.03 million tonnes in 2015, while the output is expected to reach 43.77 million this year, 50.38 million tonnes by 2020 and 57.49 million by 2030. When comparing the estimated output and the demand, the ministry found that Vietnam had 3.5 million tonnes in excess in 2015 and 2 million tonnes in 2016 and proposed to export the excess.

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