The Vietnamese government is actively seeking solutions to enhance coal trade cooperation with Laos, addressing the challenges in the current coal trade between the two countries.
On 25 July, Vietnam’s Minister of Industry and Trade, Nguyen Hong Dien, chaired a conference to discuss these issues. He emphasized the need for corporations and coal-using firms to engage with partners and propose solutions to overcome existing obstacles.
These cooperative efforts between Laos and Vietnam in the coal sector began with a Memorandum of Understanding (MoU) signed on 20 July, 2023. This MoU aimed to strengthen cooperation in coal mining, processing, and export. In the first six months of 2024, Vietnam imported 1.171 million tonnes of coal from Laos, valued at USD 75.8 million. However, achieving the MoU’s ambitious goal of importing 20 million tonnes of coal annually remains a significant challenge.
In 2023, Vietnam imported a total of 2.239 million tonnes of coal from Laos, worth USD 159.4 million. However, several key obstacles hinder further progress. These include high transportation costs due to over 300 km of difficult terrain, a lack of long-term purchase mechanisms, and limited customs clearance capacity.
To address these challenges, the Vietnamese government has proposed several measures. They suggest that Lao coal producers reduce costs to enhance competitiveness and invest in upgrading roads to improve transportation. Additionally, Vietnam has requested that Laos consider exempting the 10 percent tax rate on coal exports to Vietnam.
In the long term, Vietnam aims to invest in coal exploration and extraction in Laos, synchronize infrastructure improvements, and build conveyor belts for coal transportation.
