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Vietnam fails to export 2 mil mt of coal to China due to technical barriers

Hanoi (Platts)--12 Dec 2017 548 am EST/1048 GMT


Vietnam was unable to export 2 million mt of coal to China this year as the latter set strict specification for mercury, arsenic, phosphoric, chlorine and fluorine content in imported coal, according to a Vietnam Ministry of Industry and Trade's letter obtained by S&P Global Platts Tuesday.

Vietnam National Coal-Mineral Industries Holding Corp. Ltd., or Vinacomin, had planned to export around 2 million mt of coal to China from its Uong Bi-Vang Danh coal mines in the northern province of Quang Ninh, which has calorific value ranging from 5,050 Kcal/kg to 5,700 Kcal/kg and maximum 35% ash content under Vietnam's 2015 specifications.

On December 2, 2016, the Vietnamese government had given permission to Vinacomin and the Northeast Corp. to export 4.05 million mt of coal in 2017, the ministry said.

Under the approval, Vinacomin was to export 4 million mt of coal: 2 million mt of Uong Bi-Vang Danh coal and 2 million mt of coal with calorific value ranging from 6,700 Kcal/kg to 7,950 Kcal/kg and maximum 19% ash content.

The Northeast was allowed to export 50,000 mt of high-quality coal with calorific value ranging from 6,700 Kcal/kg to 7,950 Kcal/kg and maximum 19% ash content.

In October, Vinacomin and Northeast announced that they would be able to export over 2.03 million mt of coal this year, just half of the permitted volume.

Tests have shown that the Vietnamese coal has failed to meet the Chinese requirements to be able to penetrate the China market. As a result, Vinacomin is expected to have stockpile of 2.5 million mt of the Uong Bi-Vang Danh coal as of end-2017, the ministry said.

Vinacomin is looking for buyers from Thailand and South Korea to export the Uong Bi-Vang Danh coal in 2018.

For the next year, the ministry has proposed the central government to allow Vinacomin and Northeast to export 4.05 million mt of coal, the same as their 2017 target.

The ministry has also proposed the central government to allow Vinacomin to sign long-term contracts with Japanese buyers to sell high-quality coal until 2025 as these contracts will help Vinacomin in securing more Japanese loans for its coal and power projects. Currently, Vinacomin is permitted to sign contracts to export coal to Japan until 2020.

In the first 11 months, Vietnam exported 1.98 million mt of coal, nearly 106% up on the year, customs data showed last week. Japan was the biggest buyer during the period, rising 80% on the year with 906,477 mt of coal. The shipments to China were just 16,240 mt of coal during January-November, up 4.9% year on year.

--Staff, newsdesk@spglobal.com

--Edited by Pankti Mehta, pankti.mehta@spglobal.com




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