Indonesian firm PT Intra Asia Indonesia has signed a memorandum of understanding (MoU) with its counterpart in Vietnam, in connection with its plan to construct a coal port in the southern part of the country with US$1 billion.

The agreement was signed by PT Intra Asia president director Justin Lim and Hong Pat Coal and Resources chairman Phan Ngo To Hong in Jakarta on Wednesday, witnessed by secretary- general of the Communist Party of Vietnam, Nguyen Phu Trong.

“The port will especially be used for cargo and logistics that will serve exports and imports between Indonesia and Vietnam, particularly coal,” said Intra Asia Indonesia commissioner Lutfi Ismail in a statement.

When it operates, the capacity of the port will reach between 15 and 20 million tons of coal per year, he said, adding that it would cut logistics cost for coal imports from Indonesia.

Lutfi said construction of the port would facilitate the sustainability of coal exports from Indonesia to Vietnam, and would help fuel power plants in the country.

Indonesia targets to export 4.5 million tons of coal to Vietnam this year, said Lutfi. “We hope that the cooperation will boost Indonesian coal exports to Vietnam,” he added.

The Central Statistics Agency (BPS) recorded that trade between Indonesia and Vietnam reached $6.3 billion last year, while Indonesia suffered a $182.90 million deficit. (bbn)