The global coal market changes and evolves: new players appear on the global stage, new partnerships emerge, market hubs shift to new locations, and the commodity flows alter.
The changes going on globally also include fundamental shifts in the mineral resources market, movement that began around 2003. These particular developments have led to traditional producers and exporters of mineral resources to divert supplies to domestic consumers, and in some cases to even become net importers. This situation applies to China and India, and also to Brazil, Indonesia and other emerging economies which are becoming increasingly significant consumers of commodities on the back of extensive industrialisation and urbanisation.
Vietnam, in south east Asia, is among those countries undergoing rapid modernisation, and it is a country that boasts extensive mineral riches. The territory of Vietnam includes deposits of many traditional metal resources, including antimony, bauxite, chrome ores, manganese ores, copper, nickel, lead, silver, titan ores, wolfram, zinc, gold and iron ore. The country also has some of the special high-tech metals, such as rare earth elements (REE) and non-ore minerals like apatite, barite, fluorite and silica sands. Vietnam also has raw fuel energy resources; the country produces crude oil, natural gas and, above all, a high-quality coal – anthracite.
The importance of mineral resources to the economy of Vietnam is clear from the fact that mining industries account for some five per cent of the country’s GDP, and exports of its two main commodities, oil and anthracite, traditionally bring in approximately 20 per cent of the country’s foreign currency earnings.
There are immense anthracite reserves, especially in the Quang Ninh province in the northeast of the country, near the border with China. Anthracite is extracted in the area with the use of both open-pit mining and deep mining. Key anthracite mines are located in the areas of Cam Pha, Cao Son, Coc Sau, Deo Nai, Dong Trieu, Ha Tu, Hong Gai, Khe Cham, Mao Khe, Mong Duong and Uong Bi. The region has in recent years witnessed an explosive development of the coal industry with unbelievable production growth, supported by both domestic demand and growing global demand for high-quality Vietnamese anthracite. This coal offers a high heating value, as well as low ash, phosphorus and sulphur contents. The anthracite deposits are huge: as much as 3.5 billion tonnes at depths of no more than 300 metres, with estimated reserves at greater depths of a higher order.
As the above table shows, dynamic production growth between 2003 and 2007 was coupled with nearly a fivefold increase in the volume of anthracite exported from Vietnam. The country has gradually become the largest global exporter of anthracite with a marked advantage over Russia (approximately 9 million tonnes exported in 2007) and China (5 million tonnes exported in 2007). Vietnamese anthracite has been traditionally exported to Japan, South Korea and China, with China gradually gaining a dominant position as the main buyer in recent years. Growing domestic consumption forced the Vietnamese government in 2007 to limit exports in order to safeguard supplies earmarked for domestic thermal power plants and cement kilns. Domestic consumption is expected to continue on the growth curve. It is forecast to reach 50 million tonnes in 2015, meaning the country would go from being a coal exporter to being a net importer.
The state-held company VINACOAL (Vietnam National Coal Corporation), a member of the VINACOMIN consortium together with the Vietnam National Minerals Corporation (VIMICO), is the exclusive miner of Vietnamese anthracite. VINACOAL acts as an umbrella for 20 subsidiaries, including three processing plants in Cam Pha, Hong Gai and Uong Bi, and three transport terminals in the region. VINACOAL thus controls the majority of the production, distribution and export of anthracite from Vietnam.
Beside the “national” raw material anthracite, Vietnam possesses numerous other attractive mineral resources. Within the Asia Pacific region, the country is an important producer and exporter of crude oil, a regionally important producer of titanium ores and a prospective producer of the rare earth elements (REE) that are indispensable for numerous modern technologies. Thanks to a sophisticated strategy, China has gained a global monopoly in REE mining, currently accounting for approximately 95% of global production. Moreover, China took the decision recently to limit exports of these highly strategic resources to global markets, citing growing domestic consumption and the necessity of closing down some of its mines for safety and/or environmental reasons. These developments could turn the promising REE deposits in the Lao Cai province in the north of Vietnam into a much-desired alternative source of these super-strategic resources for the global market.
The dynamic development of Vietnamese mining industries generates numerous cooperation opportunities for Czech exploration and mining companies, as well as for suppliers of mining and processing technologies for the existing deposits. There are already numerous successful “win-win projects” under way. For example, Czech geologists recently found an extensive deposit of high-quality silica sands. There is also a close cooperation between relevant counterparts at the government level, involving the Vietnamese Ministry of Natural Resources and the Environment (Department of Geology and Minerals of Vietnam) and the Czech Ministry of Industry and Trade (Department of Resources and Energy Security).
Pavel Kavina, MSc, Ph.D.
mineral resources analyst
- Vietnamese anthracite production, export and domestic consumption from 2001 to 2009 (in millions of tonnes)
- Vietnamese coal mine Núi béo