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Doubts raised about MOIT’s coal industry development program
The program on the coal industry development by 2020, with the vision until 2030 which was made public by the Ministry of Industry and Trade (MOIT) in February 2012, showed optimistic viewpoints about the domestic coal exploitation capacity. However, the answers to a lot of questions have not been found in the program.
The program’s feasibility still under debate
Vietnamese specialists once came to a conclusion that the coal exploitation capability in Vietnam would be some 60 million tons per annum. However, the program which has been made public shows that the coal volume to be exploited would increase continuously, from 47 million tons in 2012 to 58 million tons by 2015, then to 65 million tons and 75 million tons by 2020 and 2030, respectively.
The increase of the coal exploitation capacity would allow to satisfy the demand for coal to run thermopower plants which is forecast to jump to 77 million tons by 2020.
However, experts have doubts about the feasibility of the exploitation plan. They also said that they cannot find the answers about the economic efficiency of the program and the possible impacts on the environment and agricultural land.
At present, there has been no more open cast mine for exploitation, which means that Vietnam would have to focus on exploiting coal at the mines deep in the earth. Meanwhile, this will require modern technologies, complicated exploitation process and will not bring high yields like the opencast mining. It will require thorough field research before building mines and start the exploitation. This would be time and money consuming process.
According to Dr Nguyen Thanh Son, Director of the Management Board for Red River basin Coal Projects, an arm of the Vietnam Coal and Mineral Industries Group (Vinacoal), in order to implement the program, by 2015, it will need 2.23 million meters of exploitation drilling, which is equal to the volume of works done in the last 57 years. This is really a huge volume of works that need to be done within a short time, which proves to be an impossible mission.
Under the program, in order to have 18 million tons of coal by 2020, it will require an investment sum of 317,736 billion dong, or 15 billion dollars. This sum of money would be spent to open 47 new mines and exploit the 61 existing mines, to build infrastructure and supporting services. As such, in order to have one more ton of exploitation capacity, it will require 833 dollars, an overly high investment rate.
Currently, the average investment rate for every ton of exploitation capacity at Vinacoal is about 200-240 dollars. With the investment rate, the commercial coal production cost, including the loan interests would be 1.245 dong per ton. How high the production cost would be, if the investment rate is 3.5-4 times higher? It is clear that the coal sales would not be high enough to recover the investment capital.
Son said that it is also necessary to consider the possible impacts on the environment and the penalty Vietnam has to pay for the coal. Vietnam signed a contract on exploiting coal from a 30 million ton reserve mine with Vietmindo, a foreign partner, 20 years ago. The benefit Vietnam got was the 10 percent of the annual coal output. However, after the mining, the foreign investor left a 210 square meter gravely soil area on the site covering an area of hundreds of hectares.
Experts have also pointed out that the program only set the output targets, while the solutions to increase the productivity.
The coal and mineral exploitation in Vietnam, in general, has high proportion of loss. It is necessary to dig two tons of ores in order to obtain one ton of commercial coal.
vietnamnet
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