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Indonesian firm to pump in $1b to Vietnam coal port

Indonesian firm to pump in $1b to Vietnam coal port

JAKARTA/HANOI: Indonesian firm Intra Asia Indonesia has entered a deal to build a coal import port in southern Vietnam, local reports said. The project will involve a $1bn investment to build a port with capacity of 15m to 20m tons of coal per year.

The memorandum of understanding (MoU) between Intra Asia and Hong Pat Coal and Resources is aimed a cutting the logistics costs of coal imports from Indonesia. Intra Asia president director Justin Lim and Hong Pat Coal and Resources chairman Phan Ngo To Hong signed the deal.

“The port will especially be used for cargo and logistics that will serve exports and imports between Indonesia and Vietnam, particularly coal,” said Intra Asia Indonesia commissioner Lutfi Ismail.Lutfi said construction of the port would facilitate the sustainability of coal exports from Indonesia to Vietnam, and would help fuel power plants in the country.Indonesia aims to export 4.5m tons of coal to Vietnam this year, said Lutfi. “We hope that the cooperation will boost Indonesian coal exports to Vietnam,” he added.

According to Vietnam Customs numbers, Vietnam imported 7.92m tons of coal in the first seven months of this year, with Electricity Vietnam (EVN) alone importing 5m tons. The figure is expected to increase to 11m tons by 2020 and 19m tons by 2025. This is set to rise even further as seven major thermal power plants have been planned for the Mekong Delta region alone and demand from these is set to rise to 43m tons per year by 2030.

However, many Vietnamese sea ports are ill suited for coal import, being mostly shallow draft, and capable for receiving only relatively small parcels of 50,000 to 60,000 tons, raising shipping costs. To aggravate the problem, most dedicated thermal power plant coal receiving ports are designed with a capacity to only accept 20,000 – 30,000 dwt vessels and often have to dredge.