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Deni Creek goes to Asia

Chairman of the Board of Directors of Kolmar Sales and Logistics (KSL AG) Anna Tsivileva about a new brand of coal and exports to the Asia-Pacific countries

In 2004 year in South Yakutia, in the immediate vicinity of the city of Neryungri, coal mining company "Kolmar" began to work. Today this Russian enterprise has already entered the world market of energy resources, created its own trader - Kolmar Sales and Logistics (KSL AG), builds new concentrating factories and a port in the Far East. Moreover, Colmar seriously intends to push premium Australian coal in the Asian market. About how KSL AG is going to be among the best coal traders, said the chairman of the board of directors of the company Anna Tsivileva.

Deni Creek goes to Asia
Photo courtesy of Kolmar Sales and Logistics
Special project Coal of the East of Russia

- Anna Evgenievna, the coal of the company "Colmar" is already in demand abroad?

- Sure. Over the past year, KSL AG exported more than 1,5 million tons of coal - almost 50% of the total coal sales of the Kolmar company. And recently we introduced a new brand of coking coal to the world market. This Deni Creek coal is mined in South Yakutia. The first trial delivery to China already took place in July this year.

Deni Creek is a high-quality coking coal. It refers to low-volatility hard coking coals according to the Australian classification. The yield of volatile substances for this brand is 21-23%, sulfur content is 0,4%, vitrinite is 98-99%, fluorine content is 55-60 mg. Hot coke strength is about 45%. By the end of 2017, our company intends to produce 1 million tons of coal. And next year we intend to increase the production of Deni Creek coal to 3-4 million tons.

- What is the main market for your products?

- We do not exclude the European direction. But first of all they intend to export Deni Creek coal to the countries of the Asia-Pacific region - China, India, Japan and South Korea. After all, Asia at the moment is the largest importer of coking coal. Last year, the countries I listed imported 79% of 63 million tons of world coal supplies.

- Now ATP countries are exporting from Australia 70-80% of coal. What is the advantage of cooperation with a Russian supplier?

- Advantage provides our location. Kolmar is located in South Yakutia. This is near the ports of the Far East, and hence, from the countries of the Asia-Pacific region. Proximity to the consumer allows us to guarantee the rhythm, stability and reliability of deliveries. We have the opportunity to work with both large consumers and small customers. The amount of coal shipped can vary depending on the ship lot from 10 to 30 thousand tons.

- How is the logistics of working with the APR countries now arranged?

- Now the company "Colmar" exports Deni Creek coal through the port of Nakhodka. Negotiations on the use of the Vostochny port are ongoing. And by the end of 2019, we intend to build and launch our own cargo terminal in the Khabarovsk Territory near the village of Vanino. This terminal will provide the volume of shipment to 12 million tons of coal per year, deep-sea vessels can enter the port. By 2023, we are planning to double the shipment volumes.

- What other brands of coal does Colmar produce today?

- In addition to the already named Deni Creek, we supply coal produced by Inaglinsky GOK in South Yakutia. We are steadily increasing production volumes and intend to reach the production volume of 20 million tons. For the processing of mined coal, we build concentrators. The first concentrating factory - "Inaglinskaya-1" - was officially opened 31 May 2016 year. Its capacity is 2 million tons per year. Now the second factory is being built - Denisovskaya, with a capacity of 6 million tons. We plan to launch this factory in the beginning of next year. Next, we begin the construction of the Inaglinskaya-2 concentrator with an annual capacity of 12 million tons.

- Does “Colmar” have sufficient resources to ensure such growth?

- Coal's total coal reserves in South Yakutia are more than 1 billion tons. It was the enormous volume of the resource base, by the way, that made Kolmar think about creating its own trader. We did not want to accumulate profits from export sales on the accounts of third-party traders, which would be inevitable if we took advantage of their services. His own "daughter" allowed to save all the profits within the group of companies "Colmar".

Our own export trading structure has given us another advantage. Now we have the opportunity to react quickly to the needs of the end users of our products, the dynamics of the market. One example: we have already visited many metallurgical plants in Asia, inviting them to try to work with our coal. A third-party trader would never have gone to such costs, would not have invested so much effort in promoting our products on the market.

- Do you intend to open representative offices in other countries?

- We are considering opening representative offices in priority countries for us - China, Japan, India and South Korea. But this is a challenge for the future. The absence of representative offices abroad does not prevent us from entering into mutually beneficial contracts already today. So, we have already signed a long-term contract with the Chinese company Baowu Steel. In the framework of this contract, we are committed to supply premium coking coal from the Inaglinskaya-1 concentrator to Baowu Steel.

Now we are negotiating with Japanese and Indian metallurgists. We work with coking coal company ArcelorMittal, Chinese Baosteel, Japanese companies JFE, Nippon Steel and Nippon Coke, South Korean POSCO, Indian JSW.

- Do you supply exclusively coal of your own production or work with outside coal?

- We also work with third-party coals, but our priority task is to promote our own products. Kolmar is developing and is gradually becoming a successful world-class mining company, building trusting relationships with its partners. 

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