Paradox of coal industry: massive export, massive import

From the position of a country with great natural resources, after years of massively exporting, so far, when domestic demand increases, Vietnam has returned to import tens of millions of tons of coal every year and possibly up to 100 million tons by 2030.

The import rockets

According to the latest data of the General Department of Customs, by February 15, the country imported nearly 4.2 million tons of coal, totaling nearly $US 446 million. This result increased to nearly 2.6 million tons compared to the same period in the last year, equivalent to a growth rate of 157%. While the turnover growth rate is also up to 133% with the absolute number increased by nearly $US 255 million. The growth rate of output which is higher than turnover shows that the average value of each ton of imported coal is lower than the same period in 2018. Notably, in January alone, the amount of imported coal of all kinds has been more than 3 million tons, this is the month with the largest import volume ever.

The sudden growth of coal import activity is the highlight of import activities in the early period in 2019, especially it takes place in the context that Vietnam has always exported tens of millions of tons of coal in each previous years.

About the coal import and export activities in the last 10 years (since 2009), statistics of the General Department of Customs show that, from 2009 to 2013, Vietnam annually exports about 19 million tons of coal and almost did not import this item.

Since 2013, the export of all types of coal began to decline gradually while imports began to increase. Taking into account the amount of coal imports of all types in the period 2013-2018, it was 2 times higher than the export volume.

In particular, coal exports of all types in 2013 were 12.8 million tons and only about 2.4 million tons by 2018. Including the period 2013-2018, Vietnam only exported about 27.7 million tons. Meanwhile, in 2013, Vietnam started importing coal with nearly 2.3 million tons. In the period 2013-2018, with the average rate of galloping growth to 48% per year, by 2018, Vietnam's coal import volume reached nearly 22.9 million tons. For the period 2013-2018, Vietnam imported a total of about 63 million tons.

Regarding the import market, since 2013, Vietnam has imported all types of coal from major markets like Indonesia, Australia, Russia and the China. In particular, the most imported volume is from Indonesia with the volume of 11.2 million tons in 2018.

The booming coal export period of Vietnam was mainly exported to the Chinese market. From 2009 to 2013, China imported 14 million tons/ year, accounting for nearly 80% of Vietnam's coal export volume. Since 2014, along with the trend of reducing export volume, the amount of coal exported to the Chinese market has been decreasing, only about 4.1 million tons, accounting for about 50% of the country's export volume. Since 2015, China has no longer imported or imported very little coal from Vietnam.

Value and average price of coal export and import of all types in the period 2013-2018. Chart: T.BINH.

Export of all types of coal from Vietnam to China in the period 2013-2018. Chart: T.BINH.

Great import demand

It can be easily seen that Vietnam's coal import activity increased rapidly when a series of coal-fired thermal power plants came into operation such as Mong Duong, Uong Bi, Cam Pha (Quang Ninh), Duyen Hai (Tra Vinh), Vinh Tan (Binh Thuan)... Due to this trend and domestic coal source is exhausted, it is easy to see that the coal import story will increase strongly in the coming time.

According to the National Electricity Development Plan for the period of 2011 - 2020, with consideration to 2030 (Power Development Plan VII, according to Decision 1208/ QD-TTg dated July 21, 2011 of the Prime Minister), in order to meet the country's electricity demand, in 2020, our country’s power plants must have a total capacity of 75,000 MW, of which coal-fired thermal power plants account for 48% of the total capacity. By 2030, the total capacity of power plants must reach 146,800 MW, and the proportion of coal-fired thermal power plants will be raised to 51.6%, with a total capacity of nearly 76,000 MW, greater than the total capacity of Vietnam by 2020.

Meanwhile, according to Vietnam's coal industry planning by 2020, with consideration to 2030 (according to Decision 403/ QD-TTg dated March 14, 2016), the demand for coal for thermal power is 64.1 million tons in 2020 and up to 131.1 million tons by 2030. However, also in this plan, the calculated domestic coal mining output is only 47 - 50 million tons by 2020 and 55 - 57 million tons in 2030. While coal mining resources must also be used for many other areas such as metallurgy, cement, fertilizer and chemicals, other consumers. Particularly, these 4 target groups are also estimated to need 25.5 million tons of coal by 2030.

Thus, it can be seen that the total coal production demand in 2030 is nearly 157 million tons, while the domestic exploitation capacity is only 57 million tons, which means Vietnam must export to 100 million tons of coal by 2030.