Vietnam to curb booming coal exports as local demand surges

By Kay Johnson Apr 26, 2007, 9:26 GMT

Quang Ninh, Vietnam - Asian countries looking to Vietnam to fill the region's insatiable demand for coal may have to look elsewhere as the government plans to curb its exports to ensure there is enough for Vietnam's own rising needs.

In recent years, coal exports have become a big earner for Vietnam's exports, earning 927 million dollars last year - up 66 per cent over 2005 - by exporting 30 million tons, mostly to China and Japan.

Vietnam has an estimated 30 billion tons of coal reserves in the northern Red River delta north and east of Hanoi, making it very attractive to countries looking for new sources.

Last year, more than three-quarters of all coal production went to exports.

But that will change soon, says Vu Manh Cuong, deputy chief of Vietnam National Coal Industries Group, which represents some 55 coal state-run and private mines accounting for about 80 per cent of Vietnam's coal production.

'Priority is to be given to domestic demand for coal,' Cuong said recently. 'The proportion of coal for export is temporary and will be reduced.'

The Ministry of Industry recently outlined its plans to gradually reduce exports even as it raises production of coal - which has already more than tripled in five years to 40 million metric tons.

Under the plan, Vietnam would reduce its exports by more than half to 12 million tones by 2010 and stop exporting after 2015.

The reason for the coming curbs is Vietnam's own steeply rising demand for coal to fuel electricity plants and steel factories.

Facing electricity demand growing at 15-20 per cent a year - and already facing shortages - Vietnam is planning to build at least seven new coal-fired power plants, including a 1.4 billion-dollar plant in Quang Ninh.

Cuong estimated that Vietnam will require between 35 and 42 million tons of coal per year by 2010.

'If annual production is 50 million tones, the reserve is enough for 100 years,' Cuong said.

As such, the country is pushing to ramp up mining production, good news for grimy coal towns like Oung Bi, where nearly 80 per cent of the local population works for Vang Danh Coal Company.

Nearly everywhere you look in Oung Bi, everything is black. The road to the mines - which cover 10 square kilometers - is so caked with coal dust, it looks freshly tarred; the houses lining it have inky soot up to their windows.

'Coal is everywhere here,' says Nguyen Van Huan, spokesman for the mining company in Quang Ninh province, 250 kilometers east of Hanoi. 'It's under the ground; the dust covers everything.'

For coal towns like Oung Bi, black is the colour of money.

Founded in 1964, state-run Vang Danh is Vietnam's largest coal producer, employing more than 6,000 workers. It recently added more than 400 new miners for three round-the-clock shifts.

It's dirty and dangerous work: at least 12 miners in Vietnam have been killed in mine collapses or explosions so far this year.

But for the estimated 150,000 workers in the coal industry, the rewards are clear.

A miner at Vang Danh, for instance, can make as much as 650 dollars per month - about 10 times the usual wage for manual labour in Vietnam.

'Many of the minors come here from different provinces to find work,' said Huan, the mine's spokesman.