Despite bad results in 2019, the coal industry still wants to export 2.05 million tons

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The Ministry of Industry and Trade said that coal exports will not greatly affect the electricity supply plan and operation of the electricity system in 2020. Photo: Nguyen Thanh

Nearly half of coal volume cannot be sold

The Ministry of Industry and Trade has sent documents to the Ministry of Finance, Ministry of Planning and Investment, Ministry of Natural Resources and Environment,Ministry of Defense, the State Capital Management Committee at enterprises and QuangNinh People's Committee on contributing ideas to the 2020coal export plan of Vietnam National Coal - Mineral Industries Group (Vinacomin) and the Northeast Corporation.

The draft on the 2020 coal export plan of Vinacomin and Northeast Corporation that the Ministry of Industry and Trade sent to the Prime Minister stated thatin 2019, according to the coal export plan approved by the Prime Minister, the TKV and Northeast Corporation exports 2.05 million tons of coal. Of which, Vinacominexports 2 million tons of lump coal and coal dust 1, 2 and 3; Northeast Corporation exports 50,000 tons of lump coal and coal dust 1, 2 and 3.

According to the report of Vinacomin and the Northeast Corporation, the export of coal in 2019 is expected at 1.21 million tons (equal to 59% of the plan). In particular, Vinacominexported about 1.2 million tons (including 700,000 tons of lump coal and 500,000 tons of coal dust 1, 2 and 3, equal to 60% of the plan); Northeast Corporation exported about 10,000 tons of lump coal (equal to 20% of the plan).

The main reason for the lower than planned export of lump coal, coal dust 1, 2 and 3 in 2019, is due to the traditional coal export market of Vinacomin and the Northeast Corporation, mainly Japan, South Korea and several European countries with high requirements for coal quality and delivery schedule.

At the beginning of 2019, the world coal price was high and Vietnam's coal export was attractive to foreign users. However, only after the coal export plan was approved in May 2019, Vinacomin and the Northeast Corporation have just had a basis for organizing coal exports, so traditional partners (especially Japan) have sought alternative sources of coal and signed coal trading contracts in 2019 with other suppliers.

"This is also the time that the world coal price tends to decrease, so it is difficult to find new partners," the Draft of the Ministry of Industry and Trade stated.

The export price is lower

Regarding the 2020coal export plan, according to the report of Vinacomin and Northeast Corporation, these two units reviewed and formulated the coal production and consumption plan in 2020 on the principle of ensuring maximum supply of coal for domestic consumption, prioritizing electricity production and only exporting types of coal that are not in demand in the country according to the development perspective of Vietnam's coal industry.

These two units plan to combine coal dust 1, 2 and 3 with low quality coal produced domestically to get 5a.1 and 6a.1 coal dustfor domestic consumption, especially electricity production.

Besides, in 2020, Vinacomin and Northeast Corporation will promote the import of suitable and competitive types of coal (the two unitsexpected to import 15 million tons of coal to mixfor domestic demand, especially for electricity production).

In order to help enterprises in the coal industry be proactive in production and business and financial balance, Vinacomin and Northeast Corporation recommend exporting 2.05 million tons of coal.

Specifically, Vinacomin exports2 million tons of coal (including 700,000 tons of lump coal and 1,300,000 tons of coal dust 1, 2, 3); the Northeast Corporation exports 50,000 tons of coal (including 30,000 tons of lump coal and 20,000 tons of coal dust 1, 2 and 3).

The Ministry of Industry and Tradesaid: according to the world coal market (Global Coal, Platt), the export price of coal dust 1, 2 and 3 of Vietnam in 2020 (with the exchange rate of VND23,350/USD) is about US$139 -145/ton.

For the domestic coal market, the selling price of coal dust 1, 2 and 3 for households is as follows: about VND3,200,000/ton with coal dust 1; VND3,100,000/ton with coal dust 2 and VND2,800,000-2,985,000/ton with coal dust 3.

Thus, if exporting coal dust 1, 2 and 3, the economic value is higher (about VND45,000-215,000/ton) than the domestic consumption, bringing higher economic efficiency for the coal industry.

According to the Ministry of Industry and Trade, there are 1,320,000 tons of coal dust 1, 2, 3out of 2,050,000 tons of coal proposed to exportby Vinacomin and the Northeast Corporation. The recommended amount of coal dust is only equivalent to the demand of a power plant with a capacity of about 600 MW and accounts for a very small proportion (about 1.4%) of the total mobilized electricity capacity nationwide in 2020 (approximately 41,828 MW).

"Therefore, the export of coal dust 1, 2 and 3 has no significant impact on the electricity supply plan and operation of the electricity system in 2020, which is being considered and approved by the Ministry of Industry and Trade," said the Ministry of Industry and Trade.