Vietnamese, Lao officials discuss promotion of energy, mineral ties

Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Lao Minister of Energy and Mines Phosay Sayasone talk before their official dialogue

Present at the talks were representatives of the Vietnamese Ministry of Industry and Trade’s units (including the Market Surveillance Agency, Vietnam Trade Promotion Agency, the Vietnam E-commerce and Digital Economy Agency, the Electricity and Renewable Energy Authority, the Electricity Regulatory Authority of Vietnam, the Agency of Foreign Trade, the Newspaper of Industry and Trade, and more), Laos officials, representatives of relevant Lao authorities, and representatives of the two countries’ leading energy and mineral businesses.

Minister Nguyen Hong Dien expressed gratitude for the warm and thoughtful reception by Minister Phosay Sayasone and other Lao officials. He also expressed his joy that the Vietnamese Ministry of Industry and Trade paid a visit to Laos during the traditional Lao New Year Festival – Bunpimay, and extended his New Year wishes for good health, happiness, luck and success to officials and staff members of the Lao Ministry of Energy and Mines.

Minister Phosay Sayasone expressed the desire to further enhance the bilateral energy and mineral cooperation, jointly develop more specific cooperation plans and programs, and implement more projects and exemplary, efficient cooperative works. He proposed that the two sides establish a working group to speed up the issuance of a price framework for Vietnam to purchase electricity from Laos after 2025, found a working group to quicken the connection of 500kV power transmission lines from Laos to Vietnam according to Vietnam's Power Development Plan VIII, address some issues related to the Xekaman 1 and 3 hydropower plants, support each other and exchange experiences in establishment of electricity regulatory agencies, facilitate the transportation of goods from Laos to border crossings/ports in Vietnamese provinces of Quang Tri and Thua Thien Hue, and promote mineral inspection, planning and mapping cooperation.

During the talks, Minister Nguyen Hong Dien expressed gratitude and high appreciation for the specific proposals put forward by Minister Phosay Sayasone. Dien stated that Vietnam currently has a high demand for electricity and energy to serve its production development. Vietnam has emerged as a global factory, ranking among the world’s top-20 exporting economies and top-15 foreign direct investment (FDI) attractors in 2023. Vietnam has attracted almost US$500 billion in FDI, including US$15 billion in 2023.

Notably, in recent years, Vietnam's export scale and growth rate have increased significantly. Vietnam reached a foreign trade value of US$732.5 billion and US$681 billion in 2022 and 2023, respectively, becoming a world top-20 country in terms of export value last year.

An overview of the dialogue between Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Lao Minister of Energy and Mines Phosay Sayasone

In the first quarter of 2024, Vietnam achieved a gross domestic product (GDP) growth rate of nearly six percent, an index of industrial production (IIP) growth rate of six percent, and a manufacturing and processing sector increase of 6.8 percent while earning a trade surplus of more than US$8 billion. Vietnam is expected to reach a total foreign trade value of US$790 billion in 2024 under a high-growth scenario with favorable economic developments.

With such rapid and large-scale development, Vietnam has a significant need for energy to support its production growth. By 2030, Vietnam’s demand for electricity is expected to double its current need, and the country will have to pursue green, clean and sustainable energy. Vietnam is facing numerous challenges to ensure its energy security.

Minister Dien believes that energy and mineral cooperation is key to the bilateral energy cooperation.

He agreed with the proposals put forward by Minister Phosay Sayasone while elaborating on important contents and solutions to promote the bilateral energy and mineral cooperation, and agreeing to establish working groups of the two ministries and the two countries to ease difficulties in energy and mineral cooperation.

Minister Dien said that his ministry told the Vietnam Electricity (EVN) to study and propose a electricity purchasing price framework for the period after 2025. EVN has already drafted the price framework and will report the ministry of this draft after the draft is approved by its Board of Members. The ministry will consider this price frame and submit to the Government for approval. The price frame is expected to be issued at the beginning of the second quarter of this year.

Minister Dien highly appreciated Laos' proposal for Vietnam's technical support and exchange of experience in establishing a power regulation agency (similar to the Electricity Regulatory Authority of Vietnam under the MoIT He directly assigned the Electricity Regulatory Authority of Vietnam to coordinate with the Lao side, share experiences, provide technical support, and receive Lao delegations.

Minister Nguyen Hong Dien proposes various measures to promote energy and minerals cooperation between Vietnam and Laos

Regarding Laos' request for Vietnam to promote and facilitate the transportation of goods from Laos to border gates/ports in Quang Tri and Hue, Minister Dien affirmed that Vietnam will definitely create favorable conditions for the transportation of goods from Laos to Vietnam, especially through border gates and ports in Vietnam.

In Quang Tri, there is the La Lay international border crossing, which is an important gateway for the transportation of goods, particularly coal, directly serving the coal trade between Laos and Vietnam. Coal transported from Laos to Vietnam through the La Lay border crossing will reach ports such as Chan May, Thuan An in Thua Thien Hue, or Cua Viet Port.

"Trade in coal is a matter of great concern for the governments of both countries and their respective ministries. Vietnam's purchase of coal from Laos not only brings benefits to Laos but also contributes to ensuring domestic electricity supply in Vietnam. Therefore, creating favorable conditions for the transportation of goods, including coal, from Laos through border crossings to Vietnam and to the ports is also a goal of Vietnam," emphasized Minister Dien.

Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Lao Minister of Energy and Mines Phosay Sayasone

The two ministers sign a memorandum of understanding on Vietnam-Laos cooperation in the field of energy and mineral mining

This significant event marks a new step forward in energy cooperation between Vietnam and Laos

Minister Dien emphasized several solutions for coal trading cooperation. He stated that Vietnam's demand for coal imports is very high, especially from large corporations, and promoting coal exports is also a desire of Laos. However, the most important aspect is to focus on resolving the issue of coal prices in a reasonable manner. In the period from 2025 to 2030, Vietnam has a significant demand for coal imports (approximately 60-100 million tonnes per year). To meet this demand, the Vietnamese Ministry of Industry and Trade is willing to facilitate information exchange between Vietnamese and Lao corporations/businesses to promote coal trading cooperation.

However, according to Minister Dien, a major difficulty facing coal trade between the two countries is the high cost of Lao coal. Therefore, it is necessary to find solutions to lower the selling price of coal from Laos to Vietnam. The price of Lao coal should at least equal the international market price in order to be competitive.

To meet the demand for coal imports from Laos to Vietnam, Minister Dien proposed that coal mine owners in Laos streamline and optimize their production processes, invest in conveyor systems for coal transportation across the border to reduce the cost of extraction, production, and transportation. He also suggested that the Lao Ministry of Energy and Mines request the Lao Government to abolish the export tax on coal (10 percent). This tax generates revenue for the government but increases the selling price of Lao coal, making it difficult to sell coal and causing losses for both the government and businesses.

Minister Dien also proposed that the Lao Ministry of Energy and Mines request the Lao Government to invest in the upgrading and expansion of existing routes from Kaleum to La Lay and from Kaleum to Lao Bao. This is to improve the transportation capacity.

In Vietnam, the Ministry of Industry and Trade has directed relevant units to implement specific tasks and solutions, including encouraging businesses to sign contracts/commitments to purchase coal from Laos to serve domestic electricity production.

Minister Nguyen Hong Dien presents a souvenir to Minister Phosay Sayasone

Minister Phosay Sayasone presents a souvenir to Minister Nguyen Hong Dien

Lao Minister of Energy and Mines Phosay Sayasone agreed with the proposed options and solutions put forward by Minister Nguyen Hong Dien and affirmed that the Lao Ministry of Energy and Mines is willing to coordinate with the Vietnamese Ministry of Industry and Trade to implement plans aimed at promoting energy cooperation between the two countries.

On this occasion, Minister Nguyen Hong Dien and Minister Phosay Sayasone signed a Memorandum of Understanding (MoU) on cooperation in the field of energy and mineral extraction. This significant event marked a new step forward in energy cooperation between Vietnam and Laos.