Buyers were primarily China, Japan, Thailand, India, Malaysia, South Korea and Europe, said Tran Xuan Hoa, general director of the Viet Nam National Coal and Mineral Industries Group (Vinacomin).

Local consumption was 10.98 million tonnes, also equal to the same period last year. Coal for both domestic consumption and export earned Vinacomin more than VND20 trillion (USD1.1 billion), of which VND12 trillion (USD 667 million) was from exports, Hoa said. Vinacomin plans to export 3 million tonnes of coal this year.

Despite its estimated 42 billion tonnes of coal reserves, the company is struggling to cater for steeply rising domestic energy demand of 17-20 per cent a year and plans to lower its export target.

Coal for China

Vinacomin was expected to export 10.5 million tonnes of coal to China for the second half of this year and the first quarter of next year, said Pham Minh Chau, head of Vinacomin’s export department.

The coal utility would sell 2.5 million tonnes of fine anthracite coal to China through the Van Gia transhipment area in the northeastern province of Quang Ninh by directly signing contracts with Chinese companies. Coal could be exchanged for goods under these contracts, he said.

More than 336,000 tonnes of coal was sold through the Van Gia transhipment area from mid-May to mid-July at a price of USD 38 per tonne, representing 93.92 per cent of the volume signed with Chinese companies. Of the figure, Hon Gai fine anthracite coal 11C accounted for 160,000 tonnes, the official added.

The Hon Gai fine anthracite coal 11A sold under contracts signed between the two governments was sold for USD 46 per tonne last June, Chau said.

Direct coal trading between Vietnamese and Chinese companies resumed last March after it was banned in May 2007 due to rampant coal smuggling in Quang Ninh.

Within a day in May 2007, 104 ships were seized in Van Gia for illegal coal transport because domestic prices were lower than international ones. Chinese buyers were small companies in Guangxi province’s Dongxing, the only port linking China and Viet Nam by both land and water, Chau said. Now demand for coal is not as high as in early 2008 due to the global economic crisis, Chau said.

China, the world’s largest coal producer and consumer, is expected to be a net coal importer for the first time in 20 years, as low prices in the international market and sluggish demand discourage exporters, according to analysts.

Several analysts have forecast that Chinese domestic coal prices, now hovering around USD 89 a tonne, could rise in the coming months on the back of summer demand and economic growth. China’s power output rose on the year in June for the first time since last October, thanks to a pick-up in the economy and rising temperatures.

Supply has also been improving, as some of China’s small coal mines are slowly returning to production, months after being shut down for strict safety inspections ordered by the central government.