Jaks coal mine hits red tape snag

The province’s Department of Planning and Investment (DPI) told VIR that it was unsure when Jaks’ $50 million project to exploit Co Kenh coal mine and its $2.2 billion project to build a thermal power plant in the province, would be officially rubber-stamped.

In the early stages of last year, the DPI expected the power project to be licenced by the Ministry of Planning and Investment (MPI) in June 2010 and the Co Kenh project in August 2010.

DPI’s vice director Nguyen Xuan Doan said that when Jaks asked the province’s authorities in 2009 for permission to exploit coal at the 40ha Co Kenh mine, it was required to use the mine’s coal exclusively for its province-based 1,200-megawatt coal-fired thermal power plant project, which was then under consideration, as a compulsory condition, to be licenced.

“Only after the power project is licenced will the permission to the Co Kenh project be able to be considered,” Doan said.

To build the power plant, in early 2010, Jaks inked a build-operate-transfer agreement with the Ministry Industry and Trade (MoIT) and a 25-year power purchasing agreement with Electricity of Vietnam.

The 200ha power plant is poised to be built in Kinh Mon district’s Phuc Thanh commune. The commercial operation for the first turbine of 600 megawatts is scheduled in 2014’s fourth quarter and the remaining 600 megawatts will follow in 2015’s second quarter, contributing to allay Vietnam’s power shortages.

Upon expiry of the concession term, Jaks will transfer the plant to the MoIT. Additionally, the company also inked an agreement with state-owned Vinacomin for coal supply from nearby mines in Quang Ninh province for this power project.

However, Doan said that appraisal of this project’s investment dossiers remained with the MPI and other ministries and agencies. But only half of the ministries and agencies had completed this task.

Nguyen Xuan Tu, a representative from the MPI’s Department of Investment Appraisal and Supervision, told VIR that it was quite complicated for appraising this power project’s investment portfolios.

“I cannot say when this project will be licenced, because completion of appraisal of it depends on many other ministries and agencies,” Tu said.

Meanwhile, Doan said that whether the coal project was licenced or not by the DPI depended on the government’s approval because mineral exploitation was considered to be “sensitive”.

Jaks, which is the first foreign investor to eye the Co Kenh mine, has already worked with local authorities. It has also carried out surveys and prepared detailed investment portfolios for the mine with some 10 million tonnes of coal in reserves.

“We are expecting Jaks to be licenced to exploit the Co Kenh mine as soon as possible.”

“At present it is difficult to manage the mine, which is being illegally exploited by local inhabitants and making no contribution to the local budget,” Doan said.