Removing knots in coal mining investment

Exhausted natural resources and slow investment progress

According to Deputy Director General Nguyen Van Bien of the Vietnam Coal and Mineral Industries Group (Vinacomin), mineral resources are one of the two basic resources of Vinacomin. However, until now the proportion of open-cast coal mining has reduced and the group mainly has to exploit in deeper pit coal mines which results in growing coal prices.

Director of Khe Cham Coal Company Bui Xuan May also said, to this moment, resources at Khe Cham I pit mine have gradually become exhausted and the company is now moving attention to the Khe Cham III pit mine. Similar circumstances have already been seen at some new mines like Dong Trang Bach and Quang La.

Meanwhile, the implementation progress at coal mine projects remain slow and quality of the projects is not high either. To explain this, Head of Vinacomin's Natural Resources Department Nguyen Van Vuong said the slow progress were due to plans and procedures to move some mines out of the restricted zones, plus difficulties of the group’s production and business operations in recent years. Until now, Vinacomin has been granted seven certificates for coal exploration and has six coal exploration projects under verification process.

Investment in coal mining projects to maintain production of companies under the group also failed to meet the expected progress, for example, in Nam Mau, Vang Danh and Khe Tam coal mining projects. The main reason for slow progress of these projects was capital shortage. Every year, Vinacomin spends VND40-50 trillion on coal exploitation and construction of the coal mines but in reality, for the past few years, the figure has been only around VND10 trillion a year. Meanwhile, the cost to invest in a new coal mine at capacity of 2.5 million a year is over VND6 trillion already.

Focusing on developing natural resources and stabilizing coal output

In the coming years, one of the important tasks of Vinacomin is to remove “knots” in developing natural resources, especially exploring new mines. Nguyen Van Vuong said developing natural resources is a long but not an overnight story. Therefore, Vinacomin is pushing for mine exploration and licensing progress. With exploration volume implemented, the post-exploration reliability of Northeastern and hinterland resources and reserve tanks increased from 24 to 37 percent.

Exploration results show more geological conditions and coal resources and reserves, timely met production operation of the mines and improved reserve capacity for projects such as Khe Cham II-IV pit mines; Nga Hai Mine and Lo Tri Zone.

Vinacomin’s Members Council Chairman Tran Xuan Hoa added that in 2014, the group will invest VND32.3 trillion in basic construction works, concentrating on key coal/mineral exploitation, electricity, industrial explosive, mechanical and construction material projects. Of those, the projects of great interests are those on raising the capacity of the mines, technological innovation for coal mining and infrastructure construction projects of pit mines like Nui Beo, Khe Cham II-IV, Khe Cham III – 300, Ha Lam -300, Nam Mau, Mong Duong and Thong Nhat and the open-cast Khe Cham II.

To develop the mineral resources and maintain the coal output in the coming years, General Director of the Energy Department Pham Manh Thang said the government will adopt suitable mechanisms and encourage foreign investment to seek for new coal mines and coal imports from new markets. He added that technological solutions were also offered in the coal mining projects in the Red River Delta region to ensure efficient use of this kind of energy.

Deputy Prime Minister Hoang Trung Hai:

The years to come are expected to be a difficult period for the coal – mineral industries as the exploitation conditions are become increasingly difficult. The coal industry needs to control expenses and improve quality, efficiency in its operational areas, increase technological renovation proportion, ensure construction progress, especially at coal mines.

Source: VEN/ VietnamEnergy.vn