Coal exports continue despite shortage

by Le Hung Vong

Viet Nam is exporting more coal despite a warning from experts that the country could face a shortage of this fossil fuel from 2013.

The Viet Nam National Coal and Mineral Industry group (Vinacomin) has said the country will have to import coal for domestic consumption beginning in 2013, but it could not identify the sources of coal to be imported to Viet Nam.

According to Vinacomin’s figures, by 2015 the country’s coal demand will reach 94 million tonnes per year, including 67 million tonnes required for thermo-power plants while Viet Nam’s coal production stands at 60 million tonnes.

Local demand will rise to 184 million tonnes, including 150 million tonnes for power plants, while domestic production will be only 70 million tonnes per year by 2020.

Companies with plants fuelled by coal such as steel refineries, glass manufacturers, fertiliser and chemical plants will also face challenges due to the coal shortage.

But to win contracts for coal imports is no easy task, even at a price three to four times as high as the prices offered for Viet Nam’s coal today.

Sai Gon Tiep Thi (Sai Gon Marketing) newspaper says most proposals made by Vietnamese groups to import coal, to buy stakes in overseas mining companies or puchase coal mines abroad have been rejected. The proposals came from such groups as Electricity of Viet Nam Corp. and Viet Nam Oil and Gas group.

A leader from a big group who declined to be named was quoted by Sai Gon Marketing as saying that buyers from Thailand and China snatched away several contracts for coal imports shortly before they could be inked between Vietnamese groups and foreign coal mining companies. "They [Thai and Chinese firms] seemed to be willing to buy coal at any cost," he said.

Despite the coal shortages, Vinacomin’s subsidiaries exported nearly 13.6 million tonnes of coal in the first seven months of 2009, a year-on-year increase of 7 per cent.

In addition, in March 2009, the Trade Ministry approved a plan to export 3 million tonnes of fine anthracite coal per year to China through the Van Gia transhipment area in coal mining Quang Ninh Province by directly signing contracts with Chinese companies.

Furthermore, illegal coal exports to China are also on the rise. At a meeting in late July, the Party Committee of Quang Ninh said most of the illegal coal exports in the northern provinces came from Vinacomin.

The company has punished a dozen of its personnel, including the director and deputy directors of Mao Khe Coal Co., for "not performing their responsibility in protecting State minerals".

The coal sector was pleased with the revenues of nearly $1.1 billion earned in domestic consumption and exports, and its contribution to the country’s GDP.

In a recent report, Vinacomin says domestic coal demand in 2010 will be around 25 million tonnes, and Viet Nam will have an additional 20 million tonnes for export. The company said it planned to reduce its coal exports to 5 million per year in 2012.

Sai Gon Marketing says to stop the illegal coal exports and seek solutions to energy shortages, coal export must be stopped as soon as possible.

MSG pollution claim denied

Monosodium glutamate maker Vedan Viet Nam has rejected a compensation demand by farmers in southern Dong Nai and Ba Ria-Vung Tau Provinces and HCM City for damages it caused by polluting the Thi Vai River, saying the sum sought by locals is too high.

On August 10, Hoang Nhu Vinh, a lawyer representing the Taiwanese company, said the amount of VND596.6 billion (US$33 million) demanded by the farmers associations is "groundless" and had not been endorsed by authorities.

They had asked Vedan to pay 45 per cent of the estimated losses to fisheries and 48 per cent of the losses suffered by aquaculturists due to its pollution of the river by discharging untreated waste.

The farmers made the demand based on the total revenues they would possibly earn by exploiting the river, without deducting input and labour costs, he said.

The company proposes to compensate only the losses it may have actually caused to farmers by identifying the victims and assessing the damage accurately.

According to a report released by the Environmental Protection Department in May 2006, a 10-kilometre section of the Thi Vai (from the 2nd to 12th milestones) was the most severely polluted.

But many other factories and industrial parks also discharge untreated wastewater into this section of the river.

In April this year, Vedan reportedly announced a "financial support" package of VND25 billion (nearly $1.4 million) for farmers who suffered losses because of its pollution.

The general director of Vedan Viet Nam, Yang Kun-Hsiang, said the package comprises VND7 billion each for farmers in Dong Nai and HCM City and VND6 in Ba Ria-Vung Tau. The remaining VND5 billion would be used to establish a fund to develop infrastructure and help farmers get other jobs.

But the associations slammed the offer as being too low.

Lawyer Vinh said if the farmers’ demand was much higher than the amount Vedan can pay, it would withdraw its offer and the two sides could meet in court.

The case began on September 8 last year when the environmental police reportedly caught Vedan discharging wastewater directly into the Thi Vai. They had mounted a three-month ambush to get evidence.

On September 29, the Ministry of Natural Resources and Environment announced that Vedan had dumped nearly 110,000 cubic metres of post-fermentation molasses residue and solid waste every month into the river, 2.5 times higher than the ministry had previously thought.

The Environmental Protection Department said to avoid detection, the company had stored the molasses waste in a 7,000cu.m container. A second container of 15,000cu.m and some smaller ones of 1,500cu.m were also found buried. The containers were connected by a system of pipelines and the waste was pumped into the middle of the river eight metres below the surface.

The health of the Thi Vai improved earlier this year after Vedan scaled back production, but the risk of pollution still hovers since the MSG producer has a huge quantity of untreated wastewater.

Speaking at a seminar held to discuss measures to clean up the Thi Vai in HCM City in May this year, the Minister of Natural Resources and Environment Pham Khoi Nguyen said the river had been polluted, mainly by Vedan. However, untreated industrial wastewater had also been discharged from the Nhon Trach 1, Nhon Trach 2, Go Dau, My Xuan, and Phu My industrial parks. — VNS

Source: Viet Nam News