Vietnam coal supply summary

As Vietnam pursues its targets in Power Development Plan VIII, coal demand is highly likely to climb with the gradual commission of new coal thermal power plants until 2030 and start to fade out along with the exit of coal thermal plants. We expect domestic production to hover at the current level in the coming years as expansion investment is already spent out. However, the mining conditions at most mines in Vietnam are very challenging to fundamentally improve the domestic supply status quo. Since 2023, total cash cost eased, we estimate consecutive year-on-year decline from 2023 to 2025 mainly due to lower royalties in line with falling prices. We forecast that productivity improvements will outweigh the impact of mining costs in 2025, and therefore C1 per ton will decline by 5% year-on-year.