Japan, the world’s largest coal importer, will agree with Vietnam’s government to jointly explore for the commodity as it seeks to secure supplies of coal used in steelmaking.

A Japanese delegation led by Senior Vice Trade Minister Takamori Yoshikawa will sign an agreement today in the northern city of Halong with the Viet Nam National Coal-Mineral Industries Group to explore for anthracite coal in the Pha Lai area of northern Viet Nam, a senior ministry official said under condition of anonymity because negotiations are still under way.

Viet Nam is Japan’s principal supplier of the smokeless coal used in steelmaking. Japan wants stronger ties with the industry group, known as Vinacomin, as it vies for supplies with China and India, the world’s first- and second-fastest growing major economies.

Japan will also agree to provide Vinacomin with low-interest loans to develop coal resources and to export clean-coal technology to help Vietnam update inefficient coal-fired power generators, the official said.

The 60-member Japanese delegation includes senior officials from Sumitomo Corp., Marubeni Corp., Itochu Corp. and Electric Power Development Co., he said.

Japan imports 190 million metric tons of coal annually, according to the finance ministry. Thermal coal used for power generation accounts for 53%, and coking coal accounts for 42%. Japan imports 5.5 million tons of anthracite coal, and 40% of this comes from Viet Nam. (Bloomberg)