ASIA PACIFIC ENERGY RESEARCH CENTRE
INSTITUTE OF ENERGY ECONOMICS, JAPAN
Tokyo, Japan
20 March 2015
Status and prospects of Russian
coal export to the Asia-Pacific
region
Prof. Alexander Kovalchuk,
Director General, Coal Marketing Research Institute
2
Coal resources (as 01.01.2013),bln.t
Inferred
Total
Р1
Р2
Р3
462,7
382,6
672
The structure of Russian coal reserves,mln.t.
Type of coal
Total
Lignite
Hard coal,
including coking
Anthracite
Balance reserves, accounted by
the State in Russia
( as 01.01.2011)
including by categories
total
А+В+С1
С2
273 042
146 403
117 559
50 035
9 080
193 691
100 891
85 951
40 384
6 849
79 351
45 512
31 608
9 651
2 231
Reserves at acting mines
(as 01.01.2014)
Balance
categories
А+В+С1
26 734
7 935
18 110
7 466
689
including
recoverable
reserves
19 991
7 583
11 868
4 731
540
Reserves at acting mines
in Eastern Siberia
(as 01.01.2014)
Balance
including
categories
recoverable
А+В+С1
reserves
6 860,4
6 521,7
6 229,8
6 088,1
630,6
433,6
13,5
12,8
-
3
The dynamics of coal production , million tons
The dynamics of coal processing, million tons
4
The dynamics of domestic and external markets
of the Russian coal, million tons
120
million tons
103.3
350
300
Coal consumption in Russia in the directions of use,
million tons
108.3
98.8
94.1
92
100
export
98.2
91.6
91
85.7
domestic market
99.9 98.9 99.9
98.4
90.5
86.0
80
250
60
200
42.1 40.9 40.8 42.5
150
40
43
100
20
21.1
50
43.3
46.7
43.6 43.6 44.3 42.5
30.8 27.9 27.8
31.1 33.3 29.4
26.1 25.2 26.1 27.4
29
27.5 26.4
37.5 39.3 39.2 39.4 39.1 39.0
28.5
24.5
25.9 24.7 24 25.1 22.6
24.4 22.7 25.2 23.8
23.0 25.1
19.5
0
2000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014 estimate
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014 estimate
TPP
needs of coking
housing and utilities, needs of the population , agrarian and industrial complex
others
5
2012
1.6
5.3
2011
1.3
2.5
2010
2.0
2.3
2009
2014 estimate
2013
2012
2011
2010
0.0
2009
0.0
2008
0
2007
1.0
2006
0.2
2005
500
2004
0.4
2003
1000
2002
0.6
2001
1500
2.0
2008
3.0
4.5
4.9
5.6
6
3.3
2007
0.8
2.9 3.1
2006
0.680.62
4.0
2005
1.0
2004
1.2
4.0
2003
2500
5.0
2002
3000
1.4
2001
3500
1.6
6.0
2000
gas
2000
RUB/tons of equivalent fuel.
1.63 1.8
1.46
1.321.321.291.32
1.18
1.10
1.021.02
0.840.830.89
4000
2000
7.0
coal
4500
Growth of railway tariffs (cumulative to 2000) for
coal delivery ,times
2013
The ratio of prices (gas/coal) for domestic
market
6
The prices of Russian coking and steam coal
7
The dynamics of coal export on a monthly basis in 2014
8
Geography of Russian coal export
0
5000
10000
1018
Taiwan
63
4
1569
1500
0
432
Sri Lanka
406
Vietnam
0
186
N.Korea
38
184
Philippines
0
134
Indonesia
30000
25921
16841
8483
Japan
Hong Kong
25000
5518
Korea
Malaysia
20000
9592
China
India
15000
41
14519
5464
2009
2014
9
List of 15 largest companies-exporters of Russian coal in 2013 (according to CDU TEK)
0
thousand tons
4000 8000 12000 16000 20000 24000 28000 32000 36000
SUEK 2012
SUEK 2013
25,058.7
25,746.4
Kuzbasrazrezugol 2012
Kuzbasrazrezugol 2013
16,228.5
SDS-ugol 2012
SDS-ugol 2013
Kuzbasskaya TK 2012
Kuzbasskaya TK 2013
5,849.3
7,078.6
CC Zarechnaya 2012
CC Zarechnaya 2013
7,430.8
5,206.9
Sibirsky Anthracite 2012
Sibirsky Anthracite 2013
3,347.8
4,507.2
Evraz+(Raspadskaya) 2012
Evraz+(Raspadskaya) 2013
1,897.7
4,324.8
Sibuglemet 2012
Sibuglemet 2013
3,271.0
3,523.7
СС Zapadno-Sibirskaya 2012
СС Zapadno-Sibirskaya 2013
3,210.6
2,559.9
1,337.2
2,119.5
Eastern Mining Company (Sakhalinugol) 2012
Eastern Mining Company (Sakhalinugol) 2013
1,289.2
1,609.7
Russian Coal Company 2012
Russian Coal Company 2013
1,450.1
1,515.0
OJSC Kuznetskinveststroy 2012
OJSC Kuznetskinveststroy 2013
944.8
1,240.4
Open-cut Bungursky-Severny 2012
Open-cut Bungursky-Severny 2013
1,531.8
1,199.8
Severstalresurs 2012
Severstalresurs 2013
20,386.1
10,602.2
12,013.8
Mechel Mining 2012
Mechel Mining 2013
Stroyservis 2012
Stroyservis 2013
36,191.2
38,540.4
954.9
994.1
steam coal
coking coal
10
Top 15 largest countries importing Russian coal in 2013 (according to the Federal Customs Service of Russia)
thousand tons
0
2000
4000
6000
8000
10000 12000 14000 16000 18000 20000 22000 24000 26000
China 2012
China 2013
19,288.8
25,712.1
United Kingdom 2012
United Kingdom 2013
20,281.9
Republic of Korea 2012
Republic of Korea 2013
12,744.9
Japan 2012*
Japan 2013*
10,992.1
10,579.7
Turkey 2012
Turkey 2013
9,479.2
8,967.3
Netherlands 2012**
Netherlands 2013**
6,060.9
Poland 2012
Poland 2013
3,326.7
4,287.3
2,294.0
3,158.8
Taiwan (China) 2012
Taiwan (China) 2013
3,104.0
3,122.2
Belgium 2012**
Belgium 2013**
7,789.6
6,635.9
6,053.8
Finland 2012
Finland 2013
Israel 2012
Israel 2013
15,337.6
12,775.0
12,961.6
Ukraine 2012
Ukraine 2013
Germany 2012
Germany 2013
23,441.7
2,417.0
2,033.3
2,700.9
2,243.2
Spain 2012
Spain 2013
1,916.0
1,740.0
France 2012
France 2013
1,920.5
1,571.9
lignite
low volatile coal
coking coal
steam coal
11
New challenges and opportunities
ü Stable trend continuing low global and domestic coal prices.
ü Devaluation of the ruble and restrictions on borrowing from foreign banks.
ü A sharp rise in interest rates of commercial banks up to 20-25 percent and as a consequence of
increasing the key rate of the Central Bank.
ü Reducing the volume of investment in fixed assets and new projects during the last year.
ü Refusal to freeze railway tariffs for transportation of coal in 2015.
ü Introduced the import duties and increase requirements of harmful substances in imported coal to
China.
ü Russian export a competitive advantage due to the weakening of the ruble.
12
Major decisions of risks reduction in 2015-2016
ü Decline in key rate by Central Bank in the current year.
ü Interest rate subsidies on loans for the purchase of domestic equipment and
lease payments for the use of rolling stocks.
ü Extension of current year freeze railway tariffs for coal transportation.
ü Simplification of procedures for granting state guarantees for coal companies.
ü Revision of license obligations subsoil exploration and coal mining.
ü Inclusion of 7 top coal companies in the list of companies applying for
government support in terms of economic sanctions.
13
The main activities of the coal sector program development
in 2015-2016
Resources and production:
ü Updating software licensing for new coal deposits by Ministry of Natural Resources
ü Application of tax incentives for the development of new coal deposits (Krasnoyarsk Territory
and Republic of Khakasia)
ü Continued development of new coal mining areas in Eastern Siberia and the Far East
ü Start up the implementation of the roadmap on the Russian-Chinese cooperation in the coal
sector
Development of the internal market:
ü Increased use of coal trade exchange mechanisms, including the creation of a system price
indicators
ü The use of long-term contracts for the supply of coal for state and municipal needs with
corresponding changes in the Law on Coal
ü Tax incentives and the abolition of the introductory duties on equipment for coal to liquid
technologies
14
Development of coal export:
ü Implementation of the investment program to increase capacity of BAM and
Transsib railways to deliver coal for sea ports in the Far East.
ü Continued construction of new and expansion of existing coal terminals and sea
ports.
ü Continued implementation of investment projects for the construction mines are
focused on delivery of coal to the Asia-Pacific region (Elga, Elegest, Apsat,Denisov).
ü The creation of joint Russian- Chinese enterprises to finance and implement projects
and long-term contracts for the supply of coal under the state guarantees.
ü Reaching an agreement with the government of China to reduce import duties and
the requirements on the content of harmful substances for imported coal from
Russia.
Source: Rosinformugol
15
Summary
ü Fundamental factors that determine the stability of coal supply from Russia to global market are:
§ an objective limited domestic coal consumption providing priority export during the last two decades
and a future too;
§ a high availability of quality coal reserves for operating mines and resources for construction of new
mines;
§ willingness to increase production capacity of existing mines in depending on market conditions;
§ progressive displacement of coal production activity to the East of the country and reducing the
transport costs of coal to export.
ü Impermanent factor to maintain a stable the Russian coal supply is a competitive advantages due to
weakening of the local currency.
ü Analysis of the influencing factors testifies that high supply risks for Asia-Pacific coal market from the
Russia are unlikely in the short-term.
ü In the medium term the probability of risks in the security of coal supply to Asia-Pacific region may occur
in the case of delays to implement the program to increase capacity of rail transport to seaports in the Far
East.
ASIA PACIFIC ENERGY RESEARCH CENTRE
INSTITUTE OF ENERGY ECONOMICS, JAPAN
Tokyo, Japan
20 March 2015
Thank you for
your attention
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