Vietnam eyes ambitious coal import plans

But Vietnam’s coal import target of 100m tonnes requires hefty infrastructure investment

VIETNAM has received its first thermal coal cargo from Indonesia, and has grand ambitions to import 100m tonnes of coal a year in ten years, writes Hal Brown.

However, the amount of 100m tonnes has been called a “huge number” that would require significant infrastructure investment in power stations that use thermal coal.

“I don’t know how well-built the infrastructure in Vietnam is but I don’t think it’s that well advanced,” a London-based panamax broker told Lloyd’s List.

Vietnam’s 100m-tonne target would require about 100 power stations, much more than many of the large European energy companies use for their thermal coal. Therefore, “Vietnam taking 100m tonnes by 2020 is a huge number”, said the broker.

Vietnam has said it plans to build 90 new coal plants by 2025, but “there’s a difference between planning and doing”, said the broker.

Highlighting the ambitious target, Vietnam currently imports around 700,000 tonnes of coal a year, compared with about 50m into India and 95m into South Korea.

In 2015 India will be importing around 115m, and South Korea 106m, whereas Vietnam is projected to raise imports to about 1.5m by 2015, far off the 100m target expected by 2020.

Questions surrounding Vietnam’s coal import target follow reported comments by deputy general director of state mining group Vinacomin Vu Manh Hung earlier this week.

He reportedly said the 100m coal import target is part of a master plan that still requires government approval. His comments came after Vietnam received its first thermal coal imports from Indonesia earlier this week, opening up a new supply channel as the southeast Asian country boosts imports of the fuel.

Indonesia is tipped to help drive the dry bulk market in the future.

“Its infrastructure needs improving dramatically but I believe the government has recently said that they will actually start spending money increasing their infrastructure and that’s obviously going to help both India and China on their coal basis,” said Seanergy Maritime Holdings chief executive Dale Ploughman at a Capital Link dry bulk webinar last week.

Speaking at the same dry bulk webinar, Star Bulk Carriers chief executive Spyros Capralos said: “Some analysts have started grouping the so-called MIST countries: Mexico, Indonesia, South Korea and Turkey. And MIST countries have a number of important factors in common – large populations and each and are all members of the group of 20.”