Indonesia, Vietnam discuss expanded coal trading

Indonesian associations and coal companies are discussing expanding coal exports to Vietnam to meet the country’s growing power needs.

According to the Ministry of Industry and Trade, Vietnam’s demand for coal is increasing, especially for its growing power needs. Vietnamese industries are forecast to need about 81.2 million tonnes by 2020 and around 144.6 million tonnes by 2030, including 59.5 million tonnes and 119.4 million tonnes for electricity production, respectively.

Given such high coal demand, domestic supply is insufficient, requiring imports to serve the needs of domestic industries, especially for electricity production.

In recent years, Vietnam has imported several dozen tonnes of coal to serve domestic demand, some 45-50 percent from Indonesia. Indonesian Ambassador to Vietnam Ibnu Hadi said coal is one of his country’s strongest exports to Vietnam. In the first quarter of this year, Vietnam imported more than 3.7 million tonnes of coal from Indonesia, an increase of 185 percent compared to a year ago.

Dinh Quang Tri, deputy general director of the Vietnam Electricity (EVN), said coal-fired thermal power accounts for nearly 38 percent of Vietnam’s power structure and contributes 41 percent to electricity output. The country’s hydropower resources, meanwhile, have been fully exploited. Therefore, EVN is seeking sources of coal from countries such as South Africa, Australia, and particularly Indonesia.

In addition to assured supply, Indonesia has a great advantage thanks to its geographical location close to Vietnam. EVN expects Indonesian coal suppliers to provide good quality coal in a stable manner in order to help investors feel secure in developing coal-fired thermal power in Vietnam, Dinh Quang Tri said.