■ The development of Vietnam’s coal industry
 
- Vietnam is a country with comparative advantage in coal industry which comes from the country’s relatively abundant coal reserve. By January 2011, investigation results indicated that Vietnam has coal reserve of about 48.7 billion tons, the majority of which, 39.35 billion tons, lie beneath Red River basin with the area of 2000 km2. Although the Northeast of Vietnam possesses the second largest coal deposit with the reserve of 8.83 billion tons¹, it is the largest mining area in the country because it is currently not feasible to exploit coal from the deposit in Red River basin, which lies in the range of 150-2,500 meters underground and the exploitation of which requires huge investment and modern technologies not available in Vietnam yet. In addition, the Red River deposit has complicated hydrogeological condition and is located in a populous area. Moreover, Red River Delta is also one of the two main granaries in Vietnam, which may be adversely affected by mining activities. Therefore, coal production is mainly carried out in the Northeast of the country.

Table 1 – Vietnam’s coal production and export, 2006 - 2012

(Unit: million tons)

- Vietnam is currently the 17th coal producer in the world².  The average coal production in the country during 2006 – 2012 was approximately 45 million tons/year. Open-cast mining is still employed as the main method of coal exploitation, bringing about 55-60% of the country’s total coal output. Vietnam National Coal – Mineral Industries Holding Corporation Limited (VINACOMIN) is the major coal producer in Vietnam, accounting for 95% of the nation’s total coal production. The corporation has 5 big open-cast mines with the capacity of over 2 million tons/year, 15 other open-cast mines with the capacity of 100-700 thousand tons/year and some with the capacity of less than 100 thousand tons/year.
- Vietnam is most famous for its Anthracite coal and has exported coal to many countries around the world since 1989. Vietnam’s coal export hit the peak of 24.303 million tons in 2009. However, since then, the export volume keeps declining and the country has to face fierce competition in the international coal market due to the world economic downturn, the discovery of new sources of energy with huge deposits, higher risks of coal mining and higher export tariff imposed on coal³. The export volume in 2012 was only 14.4 million tons. The main destinations for Vietnamese coal include Japan, China, ASEAN and Korea, among which China is and will continue to be Vietnam’s most significant coal importer in the coming years.

Table 2 - Vietnam’s major coal export markets, 2006 – 2011

(Unit: 1000 tons)

-According to VINACOMIN’s 2012 Annual Report, the corporation produced 44.2 million tons of coal and had the revenue of VND 95,400 billion (over US$4 billion), leading to a profit of VND 2,500 billion. Vietnam’s Ministry of Industry and Trade reported that total coal export turnover in 2012 was US$1.2 billion (approximately 14.4 million tons of coal). Coal industry and other mining industries considerably contribute to the national GDP annually (10-11%).

■ Vietnam’s coal supply and demand forecasts

-Total coal supplies of Vietnam for 2015, 2020, 2025 and 2030 will be 50-52 million tons, 58-60 million tons, 62 million tons and 65 million tons, respectively. Meanwhile, coal demands are forecasted to be 38-42 million tons in 2015, 62-72 million tons in 2020, 91-100 million tons in 2025 and 116-145 million tons in 2030. Accordingly, Vietnam has to import coal from 2017 and the import volume will increase from 10-13 million tons in 2020 to 50-67 million tons in 2030.

Table 3 – Vietnam coal supply and demand forecasts

■ Sustainable development in Vietnam’s coal mining industry

- Providing energy input for many industries like electricity, cement and fertilizer, coal industry is obviously one of the most important industries in Vietnam. The industry, however, is also regarded as one of the activities that damage the environment the most. By mining coal, soil and rock, coal exploitation significantly changes the topography and landscape of mining areas. The discharge of a large amount of wastes like rocks, soil and wastewater has negatively affected rivers, streams, ponds and coastal areas, leading to the reduction of water quality. In addition, coal production process, especially open-cast mining and creates a lot of dust, hazardous emissions, such as CH4, CO, NOx and SOx, polluting the air in the mining areas. Moreover, people who live near mines suffer from noise and vibration from blasting activity and mining machines. Therefore, sustainable development of coal industry should be taken into consideration.
-     Sustainable development of the industry should be based on the following factors:
•  The product of this industry is a non – renewable resource, which will be reduced during the time. Hence, to achieve sustainable development, the amount of coal exploited should be control to ensure coal resource for future generations. Replaceable resources, advanced knowledge and technology play a very important role in this process.
•  Exploitation activities must be implemented at the same time with environmental protection in mining areas.
•  The sustainable development of the coal industry should be carried out for three aspects: economy, society and environment and in coordination with other sectors in the process of sustainable development of the country.
-  In order to achieve sustainable development for Vietnam’s coal industry, the following solutions should be taken into consideration:
•  Build a unique plan in using, exploitation and environmental protection
•  Organize reasonable order for exploitation to avoid the situation of exploiting only mines with favorable conditions for mining, leaving those with difficult mining condition to be unexploited because this affects the evaluation and planning process.
•  Search for more new resources.
•  Reorganize business structure of the industry to ensure diversification and increase the value added for the industry.
•  Apply advanced technology to exploitation and production processes to make the best use of the existing resources and protect the environment.
•  Improve sewage treatment systems in every manufacturing stage.
•  Continue to raise environmental fund, disburse and use the fund more effectively in the process of protection and improvement the environment.
•  Continue to evaluate environmental impacts and strictly control this content when doing the plan.
•  Develop replaceable resources and materials. In order to do so, it is necessary to corporate among different sectors in energy and mining industry like electricity, petroleum. It is also possible to establish “Energy and new materials development fund” which will be put under the control of the State to support for researches, development and experimental use of new energy and materials.

¹⁾ Prime Minister’s Decision No. 60/QD-Ttg, 2012.

²⁾ Wikipedia, 2013.

³⁾ Pham, T. H. and Vu, D. A, 2013.

References

[1]. Sverinov, O.V. and Nguyen, T.C. (2013). Perspective and challenge to sustainable development of Vietnam’s coal industry.  Proceedings of the 1st International Scientific Conference on Economic Management in Mineral Activities – EMMA 2013. Hong Duc Publishing House, Vietnam.
[2]. Nguyen Van Bien. (2011). Thị trường than Việt Nam – Thực trạng và chiến lược để đảm bảo cung cấp than cho nền kinh tế. VINACOMIN. (Vietnamese)
[3]. Pham, T. H. and Vu, D. A. (2013). Certain issues related to Vietnam’s coal export. Proceedings of the 1st International Scientific Conference on Economic Management in Mineral Activities – EMMA 2013. Hong Duc Publishing House, Vietnam.
[4]. Vietnam Customs. At . Accessed October 12, 2013.
[5]. Prime Minister’s Decision No. 60/QD-Ttg. (2012). “Vietnam’s Coal Industry Development Plan to 2020 with a vision to 2030”.
[6]. Wikipedia. (2013). “List of countries by coal production”.At .