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1. Current Situation of Vietnam's Coal Industry

Vietnam is facing the risk of a shortage of energy sources to meet the country's economic growth demands. Particularly, the coal supply for electricity production is related to ensuring national energy security, which is currently insufficient.

Presently, approximately 107 companies are operating in the coal industry, with leading production companies including Viancomin (41 million tons), Vietmindo (3 million tons), and Northeast Corporation (3 million tons).

In open-pit mining, advanced coal mining technologies such as drilling machines, excavators, truck transportation, and conveyor belts are employed to maintain coal extraction rates and increase labor productivity. However, the conditions for open-pit mining are becoming increasingly difficult and hazardous, leading to higher extraction costs and consequently, increased domestic coal prices.

In underground mining, the geological conditions, complex coal seam structures, and uneven seam thickness with unstable slopes present challenges. Mechanization in such conditions is difficult to apply.

Due to these challenges, the costs of coal extraction are rising, reducing the competitiveness of domestically produced coal compared to imported coal. This, in turn, affects domestic coal consumption and stockpiling, impacting production stability and hindering investment in exploration, redevelopment, expansion, and capacity enhancement of existing mines to meet the growing demands of the economy, especially for rapidly increasing electricity needs.

2. The Coal Import-Export Paradox

According to the balance of supply and demand for coal during the 2017-2030 period, the domestic production of lump coal and high-quality coal concentrate exceeds usage or remains unused, with an average surplus of 2.1 million tons per year. These are coal types of high quality produced concurrently with other coal types through technological processes. However, allowing coal exports to continue will bring significant economic benefits to businesses. For instance, 1 ton of exported lump coal or high-quality coal concentrate is equivalent to 2 - 2.5 tons of coal concentrate for electricity production.

Despite being an exporter, Vietnam still needs to import coal due to high demand in industrial sectors, especially electricity, metallurgy, and cement. Domestic coal production cannot meet this demand, necessitating imports. Import demands vary according to consumption needs and geographical distribution, with coal imports for electricity mainly in the South and Central regions, while imports for industrial production are mainly in the North and Central regions, with a small portion in the South.

Nation	Imported output (tons)
Australia	19,889,709
Indonesia	19,257,469
Russia	4,375,526
Chia	341,768
Other	7,294,386

According to the General Department of Customs, cumulative coal imports in 2023 reached over 51.1 million tons, valued at over $7.1 billion, increasing significantly by 61.4% in volume and 0.7% in value compared to the same period in 2022.

The types of coal imported into Vietnam in recent years mainly include anthracite, bituminous coal, sub-bituminous coal, and coking coal for the steel industry. The volume of imported anthracite coal is not significant, mainly used for blending with domestically produced coal. Vietnam has engaged in coal transactions with a total of 23 countries. The largest exporters of coal to Vietnam over the years include Indonesia, Australia, Russia, and China.

As a result, with the total coal demand projected to reach nearly 115 million tons by 2025, domestic production will only be able to produce over 45.7 million tons. With exports of 1.8 million tons, the import demand will rise to over 71 million tons. By 2030, the import volume will exceed 90 million tons, and by 2045, it will increase to over 95.5 million tons. Despite only starting to import coal in 2013, Vietnam has transitioned from a coal-exporting country to a net coal-importing country.

The current situation of coal production, consumption, export, and import reflects the results of investment processes, the impact of geological conditions of mines, production conditions, and market factors, especially the management policies governing coal production and business operations.

3. Reasons for High Domestic Coal Prices

Vietnam's demand for coal imports is increasing rapidly, primarily to serve electricity production and industrial needs. According to the Vietnam Energy General Department, this increase stems from insufficient domestic coal supply and lower import prices compared to domestic extraction prices, attributed to several factors:

• Geological Terrain of Coal Mines:

Import prices are lower mainly due to favorable geological conditions for extraction in some mines. Mines in other countries are often located in relatively flat and easily accessible areas. However, most coal mines in Vietnam are deep, some even reaching depths of more than 300 meters below sea level. The cost of mining in such conditions, with increased earth removal factors, has tripled, driving up production costs and domestic coal prices.

The reliability of coal resources exploration is very low, especially in traditional mining regions showing signs of depletion. Cọc Sáu Coal Mine in Quang Ninh, with a depth of -300 meters, is the deepest and longest-standing coal mine in Vietnam. This depth is rare in the world, contributing to increased production costs.

• Mining Techniques:

Favorable conditions for mining have depleted, leading to increased investment costs for efficient techniques and large-scale production. As mines go deeper and farther, the level of danger and risk rises, further escalating costs and coal prices.

Vietnam's coal industry is transitioning to predominantly underground mining, which is labor-intensive, hazardous, and risky. This type of activity significantly affects the health and lives of workers, leading to occupational diseases and accidents. Recruiting labor for underground mining is challenging, given the lengthy training period (2-3 years).

• Domestic Tax and Fee Policies:

Domestic coal is also adversely affected by tax policies. Environmental resource taxes have been adjusted in recent years, increasing by over 10%, higher than the world average of 7%. High tax and fee policies on coal contribute to soaring product prices.

• Government Support Policies:

Government support plays a crucial role in alleviating price pressure. Countries like Indonesia and Australia have implemented various measures to support coal mining businesses, including providing financing, tax incentives, and infrastructure support. These policies help reduce production and transportation costs, thereby lowering product prices.

Imported coal faces significant competition in the mining sector. Competition among coal mining enterprises promotes efficiency and reduces costs, making imported coal a cheaper energy source compared to domestic coal.

4. Forecast of Domestic Coal Consumption

The forecast of domestic coal consumption involves both direct and interpolation methods. The direct method calculates the forecasted coal consumption for industries with established plans, such as electricity, cement, steel, and chemical fertilizer. Meanwhile, the interpolation method estimates coal consumption for industries without plans or available data on coal demand.

By 2030, Vietnam's coal demand is forecasted to be approximately 65.65 million TOE (tons of oil equivalent), with an average per capita consumption of around 0.63 TOE per person (corresponding to a projected population of 104 million). Compared to the global average per capita consumption, Vietnam's coal demand by 2030 is higher, but it remains lower than many countries in the region, especially compared to Taiwan, South Korea, China, the Pacific Islands, Japan, and some resource-rich countries.

Coal resources are non-renewable and are identified as a crucial resource for economic and social development, requiring maximum exploitation efficiency. To ensure the sustainable development of Vietnam's coal industry, which is a primary fuel supplier for the economy (especially for electricity), contributing to national energy security, strategic planning, and appropriate policy mechanisms are essential.

Regarding the primary energy structure of Vietnam in terms of fuel types, coal still holds a significant proportion, but there will be a tendency towards stabilizing its share while promoting the development of renewable energy sources in line with green transition trends.

5. Thuan Hai - A Reliable Coal Importer

Thuan Hai ranks among the top 3 largest coal importers in Vietnam, with an import volume of over 3 million tons per year. It is also the largest coal trading company in the country for the Steam - Thermal industry. Here are the reasons why choosing Thuan Hai as a coal supplier in Vietnam is beneficial:

- Diverse Supply Sources: Thuan Hai has expanded its network of coal imports, providing a diverse range of coal sources from large coal mines globally acclaimed for their quality, such as Indonesia, Russia, and Australia.

- Assured Reserves: As one of the pioneering coal importers in Vietnam, Thuan Hai has established long-term cooperative relationships with major coal mines. This advantage ensures stable and continuous coal reserves.

- One-stop Logistics System: With a network of 6 satellite warehouses stretching from North to South, totaling a capacity of 1.2 million tons, situated near industrial zones and major transportation routes. The project of the Cai Map Integrated Port, in Ba Ria – Vung Tau province, with a capacity of 500,000 tons, facilitates more convenient fuel importation and storage. Additionally, Thuan Hai collaborates with transportation companies, owning a fleet of over 100 vehicles and barges to optimize costs and transportation time for customers.

- Quality Control: Thuan Hai conducts on-site inspections at coal mines, rigorously inspecting the quality of coal before transportation to Vietnam. To maintain quality stability, coal is stored and preserved in enclosed warehouses with installed roofs, conveyor belts, and dust filtration systems to protect the environment. Investment in modern equipment (laboratories, moisture and heat testing machines, etc.) ensures regular quality control from input to output.

- Professional Team: Equipped with full infrastructure and a highly experienced, dedicated team, Thuan Hai ensures customers peace of mind regarding fuel supply, from production to transportation processes.