An agreement on coal trading with Laos to be developed

La Hay International Border Gate through which coal is imported from Laos. — VNA/VNS Photo Thanh Thuỷ

HÀ NỘI — Minister of Industry and Trade Nguyễn Hồng Diên has asked for an agreement on the trading of coal with Laos.

At the working session with energy and minerals corporations on Tuesday, Diên said the coal trade with Laos not only plays an important role in promoting commercial and economic development, but it is also a political task between the two countries.

Diên asked corporations to have comprehensive evaluations about the demand for coal between the two, as well as outlining any potential problems to be addressed to create favourable conditions for the trade.

The agreement will focus clarifying imported volume from Laos, pricing, methods for transactions and the allocation of the imported coal.

Under the memorandum of understanding (MOU) between Việt Nam Ministry of Industry and Trade and Laos Ministry of Energy and Mines signed in July 2023, the two sides already agreed to enhance cooperation and investment in mining, processing and trading of coal.

Việt Nam will create favourable conditions for the trading of coals between enterprises of the two countries, enhance experience sharing and capacity building to promote energy security, energy transition and energy cooperation between the two countries.

Within the MOU a target has been set to export 20 million tonnes of coal from Laos to Việt Nam per year.

Việt Nam has high demand for coal import during 2025-30 period, estimated at 60-100 million tonnes per year.

However, the trading of coal with Laos remains difficult due to limited transport infrastructure, resulting in higher prices of imports from Laos and the absence of long-term mechanisms for coal trading, as well as problems in the quality of coal imported from Laos.

According to the Oil, Gas and Coal Department, solutions must be raised to lower prices of coal imported from Laos, including policies in taxes and investments in transport infrastructure.

Statistics from the General Department of Customs showed that Việt Nam imported 2.2 million tonnes coal from Laos in 2023, worth US$159 million. The imported coal volume from Laos remained modest compared to Việt Nam’s total coal imports, which was estimated at 51.1 million tonnes, worth $7.1 billion last year.

In the first six months of this year, Việt Nam imported 1.17 million tonnes coal from Laos, worth $75.8 million. — VNS