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Pulse of Coal - August 14
Coal industry - actual figures and facts. Partner project of the Modern Analytical Agency (CAA) and the EastRussia portal
Mining, logistics, prices, export - all that the coal industry in Russia and in the world lives on is concise and to the point - in a new partner project of the Modern Analytical Agency (CAA) and the EastRussia portal
A brief overview of the global coal market
Last week, steam coal quotations in Europe continued to rise above $ 150 / t. The rise in prices was driven by high gas indices amid a shortage of pipeline fuel supplies to the EU. Gas quotes on the European TTF trading floor renewed historical highs, amounting to $ 569 per thousand cubic meters, which is 3.6 times higher than the average cost of futures contracts a year ago. In addition, coal quotations were additionally supported by a decrease in the volume of wind generation in European countries to 364 GWh (-19 GWh by 04.08.2021).
Quotes of the South African material are at the level of multi-year highs, exceeding $ 135 / t. The rise in prices is due to limited supply of coal on the market and incomplete recovery of material supplies on the railway line connecting the coal-mining provinces of South Africa and the port of Richards Bay. Exports of South African material were restricted in July due to logistical problems associated with civil protests in South Africa and repairs on the railway line carried out by Transnet. Experts estimate the loss of South African exports for the first half of 2021 at 9 million tons.
Coal prices of 5500 kcal / kg NAR domestically produced in Qinhuangdao port fell below $ 162 / t. The decline in the trading activity of Chinese buyers due to the high price of the material in the domestic market negatively affects the indices of coal from the PRC.
Steam coal quotes from Australia exceeded $ 170 / t. amid a weeklong ban on mining in a number of coal mines caused by a new outbreak of COVID-19. According to experts, the ban will be extended due to the further spread of the virus.
South Korea's thermal coal imports rose in July 2021 to an all-time high of 11.6 Mt (+ 25% versus July 2020) amid rising overall electricity demand due to hot weather and outages in nuclear power plants. Over 54% of South Korean imports of coal fell on Australia, which increased the supply of material in July to 6.3 million tons of coal (+ 163% against July 2020).
The quotes of the Indonesian material exceeded $ 125 / t. against the backdrop of government restrictions on coal exports. On 04.08.2021/34/XNUMX, the Indonesian government adopted a decree on measures against coal companies that do not fulfill their obligations to supply coal to the domestic market. As a result, XNUMX Indonesian companies were banned from exporting coal.
The weekly ban on mining at a number of coal mines in Australia due to the outbreak of COVID-19 has positively affected the Australian coking material indices, which exceeded $ 220 / t.
Russian Railways may build a new railway line to China
On August 09, 2021, Russian Railways proposed to build a new railway line connecting Kuzbass and China through the Altai Territory. According to Deputy General Director of Russian Railways Alexei Shilo, the project provides for three possible routes for laying the railway line:
• from Biysk station on the West Siberian Railway (part of the Trans-Siberian Railway) to Aveitan station in China with a length of 1006 km;
• from the Tashtagol station on the West Siberian railway to the city of Avaytan with a length of 1081 km;
• from the Abaza station in Khakassia to the city of Aveytan with a length of 1276 km.
According to preliminary estimates, the new railway line with an approximate throughput of 30 million tons of cargo could reduce the load on the Trans-Siberian and Baikal-Amur Mainlines and allow coal producers from Kuzbass, Novosibirsk Oblast and Khakassia to ship coal directly to China, bypassing ports in the Russian Far East. ...
Nevertheless, the ambitious project seems unrealistic, given the mountainous landscape of the Altai Territory, where the construction of the railway line will take place, and the environmental restrictions under which construction work must be carried out. Also, according to experts, at the moment the idea of Russian Railways seems economically inexpedient and requires the involvement of private investors with their participation in the construction and subsequent management of the facility. This project is not provided for by the Russian Railways strategy until 2025.
In the past, the idea of building a railway to China through the Altai Mountains was considered in the context of many Russian infrastructure projects, but it was never realized due to the technical complexity and the need to cross the Ukok Plateau, a nature reserve that cannot be bypassed.
En + Group revises its coal development project
On August 11, 2021, the Tuva Mining Company (TGRK), owned by En + Group, announced that it had reassessed the reserves of its Kaa-Khem coal field in Tuva, Russia, and decided to revise its development plans for this coal basin.
Earlier, En + Group postponed the development of the Kaa-Khemskoye and Chadanskoye coal deposits in Tuva and adjusted the production plans for the project. The new project includes the construction of mines in the license areas Kaa-Khemsky 1, 2, 3. According to the optimistic scenario, the company plans to produce 6.7 million tons of coal per year, according to the pessimistic scenario - 0.7 million tons, compared to 10 million tons. , previously outlined in the strategy for the development of the coal industry in Russia until 2035.
According to the updated project documentation, the total investment in the project is estimated at 52.8 billion rubles. (718.3 million dollars) against the previously announced 44 billion rubles. ($ 598.5 million). The project is expected to be completed by 2034 (previously planned until 2023). As of June 2020, TGRK has carried out geological exploration in the Kaa-Khem 1, 2, 3 sections of the Kaa-Khem coal basin.
Nevertheless, TGRK may face logistical problems, given that Tuva and the Kaa-Khem coal field are not connected to the Russian Railways' railway network. On April 20, 2021, Russian Railways suspended the contract for the construction of the Elegest-Kyzyl-Kuragino railway line, the first railway in the Tuva region, which was supposed to connect it with the Trans-Siberian Railway. It was assumed that the volume of freight traffic on the line will reach 15 million tons of cargo per year. The total investment in the project was estimated at about 126.6 billion rubles. (1.6 billion dollars) with a construction period of 4.5 years. In 2019, Russian Railways signed an agreement with the Tuva Energy Industrial Corporation (TEIC), owned by Russian businessman Ruslan Baysarov, on the implementation of a railway line construction project. However, the Russian government decided to suspend the concession for up to five years without charging fines and penalties.
In 2020, TGRK production reached 0.54 million tonnes (-0.03 million tonnes by 2019). TGRK is owned by Vukelich Limited, the beneficiaries of which are associated with En + Group. En + Group is a group of companies that controls the assets of Oleg Deripaska. En + Group owns the world's largest aluminum producer RUSAL, the largest private Russian energy company EuroSibEnergo, large coal deposits and a logistics business. The main assets of En + Group are located in Eastern Siberia.
Rostekhnadzor has suspended the work of the open-pit company Stroyservice
On July 23, 2021, by a court decision, mining operations were suspended at the Bungursky-7 section of the Berezovsky coal mine for a period of 90 days.
At the end of July 2021, Rostekhnadzor, during an inspection of production facilities at the Berezovsky open pit, revealed a number of violations in the field of industrial safety.
The Berezovsky open-pit mine is part of the Stroyservice group of Dmitry Nikolaev. In 2020, the volume of coal production at the open pit amounted to 5.16 million tons (-0.25 million tons by 2019).