Vietnam becomes major coal market of Indonesia


In the first five months of 2017, Vietnam imported 5.57 million tonnes of coal valued at US$ 577.218 million, down 4.7 percent in volume but up 58.3 percent in value.

This is the data released at the Vietnam-Indonesia Coal Industry workshop: "Ensuring economic development and energy security", to promote trade and investment between Vietnam and Indonesia, especially in the coal industry. The workshop was organised by the Vietnam Chamber of Commerce and Industry (VCCI) in cooperation with the Embassy of Indonesia in Vietnam in Hanoi.

Indonesia is currently one of the largest import markets for coal in Vietnam. As demand for coal imports grows, Indonesia is considered a potential import market for Vietnam.

Mr Ngo Son Hai, Deputy General Director of Electricity of Vietnam (EVN), said that in 2016, the demand for thermal coal of the group was 680,000 tonnes, in 2017 it is expected to be 4.7 million tonnes. This number will increase to about 11 million tonnes by 2020 and by 2025 to 19 million tonnes. Mr Hai added that demand for electricity in Vietnam is increasing, while the hydropower potential is fully exploited, renewable energy is also limited, the demand for thermal coal is huge. He also wishes for a stable coal supply for coal power plants.

EVN started to have coal import demand in 2016 and the first factory using imported coal is Duyen Hai 3 Hydropower. Currently, the Government is assigning EVN to build and manage thermal power plants using imported coal that are Vinh Tan Thermo Power, Duyen Hai 3 and 4 thermal expansion.

According to Mr Hai, ensuring stable coal for Duyen Hai 3 Thermal Power Plant is a matter of great concern. EVN is still in the process of researching and applying reality in the coming time to to ensure a stable supply of coal for electricity generation.

According to the Vietnam National Coal - Mineral Industries Holding Corporation Limited (Vinacomin), among the coal volume expected to use in the most cola-consuming sectors including electricity, metallurgy, cement, fertiliser and chemicals, the electricity sector ranks first. Total coal demand for electricity is 34-35 million tones in 2017; over 100 million tonnes in 2025, and over 140 million tonnes in 2030. Meanwhile, in 2016, Vinacomin had exploited 34 million tonnes of coal, in 2017 is expected to be 36 million tonnes and 47 million tonnes in 2020.

Apart from EVN, many foreign thermal power producers and other groups such as Vinacomin, Vietnam Oil and Gas Corporation (PVN) also have to import coal.
However, as estimated, by 2020, coal demand for domestic production is more than 75 million tonnes of coal. Domestic coal only meets half of demand, indicating that Vietnam's demand for coal imports is huge.

Meanwhile, coal production is difficult and cannot increase production quickly, so by the time the coal imports increase, by 2030 is expected to import 120 million tonnes of coal.

Indonesian Ambassador Ibnu Hadi, said that in 2016, Indonesia's coal output was 23 million tonnes, of which 60 percent was supplied by the domestic market, and the remaining was exported to other countries. In 2017, Indonesia will continue to export coal and increase production to 25-30 million tonnes by 2018.

Mr Ibnu Hadi said that the Vietnam’s increasing amount of imported coal will increase an opportunity for Indonesia coal exporters. That also means that Vietnam is a promising market for Indonesian coal exports.

Statistics show that in 2016, total trade exports from Indonesia to Vietnam was US$5.5 billion, in 2017, it will strive to reach US$6 billion. One of the major products that Indonesia exports to Vietnam is coal. In 2016, the export of coal from Indonesia to Vietnam reached 2,945,671 tonnes. In the first four months of 2017, export to Vietnam was 1,551,824 tonnes, and by 2017, 4.5 million tonnes will be exported to Vietnam.

There are currently 39 Indonesian enterprises investing in Vietnam, including Vietmindo, which is investing in mining in Quang Ninh,Vietnam.