| Abstract | Vietnam National Coal and Mineral Industries Holding Corporation Limited (VINACOMIN),
along with Petro Vietnam (PVN) and Vietnam Electricity (EVN) are three pillars to ensure
the national energy security for Vietnam.
VINACOMIN is a state-owned enterprise, which diversifies its businesses with a focus on
mining and supplying coal for the economy. Established in 2005, VINACOMIN has rapidly
grown. The current size increased 3 times, the revenue increased 4 times since the
establishment. Nevertheless, during development, VINACOMIN also faced many challenges
that need to be addressed and overcome to maintain and improve its competitiveness.
The total amount of raw coal mining in the period of 2006-2013, was 360 million tons, among
them clean coal production reached 325 million tons. Thus, low quality coal (including low -
heating coal, waste residue and sludge of coal...) remained 35 million tons, accounting for
over 10% of the raw coal. Low quality coal will rapidly increase a long with the coal
production to satisfy for the economy.
In addition to improving the coal processing technology to recover the high quality coal, it is
necessary to consider options of using low quality coal to utilize the natural resources in the
context which fossil fuels are running out, minimize impacts on the environment and ensure
sustainable development. One of options is to burn the low quality coal for generating power.
Since 1999, VINACOMIN has implemented the construction of thermal power plants using
coal with the heating value from 3500-4500kcal/kg. The low quality coal with heating value
ranges from 2800-3000kcal/kg is very difficult for burning and needed to apply advanced
technologies. Furthermore, VINACOMIN has to prioritize its finance on mining projects with
annual demand for the capital investment of more than $US2 billion. So, VINACOMIN needs
to solve two key challenges, include financing and technologies.
Vinacomin has also invested power projects in many forms: 100 % of the capital investment,
capital contribution, joint ventures and BOT contracts ... Nevertheless, these types of
investment cannot solve the two biggest problems including the capital and technology.
Finding appropriated forms of investment to develop the power plant projects when burning
low –coal quality is very important and necessary to both maximize the advantages of
technology and financing of domestic and international partners in order to bring maximum
benefits using reasonable resources in VINACOMIN capabilities.
This project develops a framework for VINACOMIN to cooperate with foreign partners
investing in a power project under a Business Cooperation Contract (BCC) with Energy
Conversion Model - ECM, in which foreign partners do the construction and operate the
power plant, while as VINACOMIN provides fuel (coal, oil, limestone, industrial water ...)
and buy electricity from the power plants to distribute in the market. After about 10-12 years
of operation, investors will sell for VINACOMIN with the price of $1. |