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Pulse of Charcoal - April 17
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 exceeded $ 71 / t. The growth of the indices is associated with the positive dynamics of Brent oil prices to $ 66.29 / barrel (+ $ 4.29 / barrel by April 07.04.2021, 1017) after the publication of data on crude stocks in the United States, as well as an unexpected decrease in temperatures in a number of European countries, which caused followed by an increase in coal consumption by local power plants. The decrease in the volume of wind generation to 809 GWh (-07.04.2021 GWh by 2/43.73/XNUMX) provided additional support to the coal indices. However, the price of COXNUMX credits is high at XNUMX € / t. restrains further growth of coal prices.
The high price of export coal from South Africa and the availability of material in the Indian domestic market reduced the interest of Indian companies in the South African material, weakening the indices below $ 91 / t. Coal reserves in the warehouses of the Indian state-owned company CIL are 100 million tons (+23 million tons by 01.03.2021).
The slowdown in trading activity of Indian enterprises amid the approaching monsoon season in the country, as well as the availability of material in the Indian domestic market had a negative impact on demand from Indian coal companies and reduced the Australian coal indices below 92 USD / t.
In March 2021, coal exports from Australia amounted to 27.2 million tons (-4.3 million tons, or -14% versus March 2020 and -2.4 million tons, or -8% versus February 2021). The main reasons for the decline in export volumes were floods in New South Wales, Australia, which flooded some coal mines in late March.
Demand from Chinese generators for low-calorie coal from Indonesia bolstered the Indonesian material quotes above $ 78 / t.
The Indonesian government has increased the country's coal production quota to
625 million tons for 2021 (+75 million tons to the original quota for 2021). In 2020, the total volume of coal production in the country reached 563 million tons, exports amounted to 407 million tons.
Weak trading activity of metallurgical plants in the Asia-Pacific region amid falling steel prices weakened the indices of coking material from Australia below 110.5 USD / t.
Debt load of A-Property reached $ 2 billion.
In 2020, the debt of Albert Avdolyan's A-Property company increased from 13.5 billion rubles. (178.4 million dollars) to 152.2 billion rubles. ($ 2.1 billion). The growth of the company's debt occurred as a result of the acquisition of assets in the amount of RUB 142 billion. ($ 1.8 billion).
In April 2020, A-Property acquired 51% of Elga's shares from Mechel, owned by Igor Zyuzin, for 89 billion rubles. ($ 1.17 billion). Elga is one of the largest coking coal deposits in the world with total reserves of 2.2 billion tons (according to the JORC classification). In December 2020, A-Property bought the remaining 49% in Elga from Gazprombank, consolidating the project. The deal amounted to RUB 45 billion. (615.9 million dollars). In 2020, production at the Elginskoye field reached 6.73 million tonnes (+ 2.41 million tonnes or + 56% by 2019). In February 2021, A-Property signed an agreement with Alltek on the basic conditions for the acquisition of the Sibanthracite Group, owned by Dmitry Bosov's heirs, for $ 1 billion (see CAA Russian Coal Weekly, February 12, 2021). Sibanthracite is the world leader in the production and export of high-quality anthracite, the total production of which in 2020 amounted to 17.3 million tons (-5.7 million tons or -25% by 2019).
The main partner of A-Property is the Russian state holding Rostec. Both companies control the Port Vera coal terminal in the Russian Far East and the Ogodzhinskoye coal deposit. In March 2021, Rostec signed an agreement with A-Property on the basic conditions for the transfer of the state corporation 5% in the Elga coal project.
Given A-Property's ambitious plans to increase production at Elga to 45 million tons and at the Ogodzhinskoye coal deposit to 10 million tons by 2023, the company will need additional funds to develop assets. In March 2021, Elgaugol, the company developing Elga, pledged coal to Gazprombank in the amount of RUB 2.06 billion. ($ 26.4 million). It is assumed that the pledge will ensure the fulfillment of the obligations of the coal mining enterprise under the loan agreement concluded between the Elgaugol company and the bank on December 01, 2020.
VEB.RF reduces Sibuglemet's debts
VEB.RF, a Russian state-owned development corporation, has effectively written off a significant portion of the debt of its coal mining asset Sibuglemet, converting the debt from dollars into rubles and setting a new interest rate of 6.5% per annum. As a result, the coal mining company's debt fell from $ 3.5 bn to $ 2.3 bn. However, given the company's potential revenues, Sibuglemet may not be able to service its liabilities in the long term.
According to Sibuglemet's estimates, in the period from 2021 to 2040. the company's revenue will decrease from 10.6 billion rubles. (139.6 million dollars) to 9.4 billion rubles. (123.7 million dollars) due to a decrease in production volumes.
Sibuglemet is one of the largest Russian coking coal producers. The structure of Sibuglemet includes the open-pit mines of Mezhdurechye and Yuzhny, the Antonovskaya and Bolshevik mines, as well as the Mezhdurechenskaya and Antonovskaya concentrating factories. The holding is currently owned by the Russian State Development Corporation VEB.RF. Until November 2020, the company was under the management of the Evraz holding, owned by Roman Abramovich. In December 2019, Evraz planned to buy Sibuglemet. However, according to representatives of Evraz, the deal did not take place due to the fall in coal prices. Most of Sibuglemet's assets are directly owned by VEB.RF. The rest of the assets are pledged. In 2020, the company's coal production amounted to 10.1 million tons of coal (-2.3 million tons or -18% by 2019).
Ukraine's coal imports grew by 18% in Q1 2021.
In the 1st quarter of 2021, coal imports by Ukraine increased to 5.2 million tons (+0.8 million tons or + 18% compared to the same period last year). 3.1 million tons or 60% of imported coal was supplied by Russia, 1.2 million tons or 23% were coal supplies from the USA, 0.6 million tons or 12% of Ukraine's import volumes fell on supplies from Kazakhstan, the remaining 0.3 million tons or 5% were supplied other countries.
Low temperatures in early 2021 in Ukraine spurred demand for imported material amid increased consumption at local coal-fired power plants. However, the heating season in Ukraine ended ahead of schedule due to warm weather, which led to a slight recovery of coal reserves. On December 16, 2020, Ukraine extended a 65% duty on coal imports from Russia until the end of 2021. Import anthracite and coking coal are not subject to duty, as there is a shortage of these types of material in Ukraine.
CoalStar will create its own railway operator
On April 14, 2021, during the Krasnoyarsk Economic Forum, the CoalStar holding, owned by Eduard Khudainatov, announced plans to create a railway operator in 2022. The company intends to invest about 51 billion rubles in this project. ($ 665 million). According to CoalStar representatives, a new railway operator is needed to ensure the export of coal from the Beyskoye coal deposit in Khakassia. In 2020, the company produced 4 million tons. By 2030, CoalStar intends to increase coal production to 30 million tons per year.
CoalStar is a coal holding, which includes the Mayrykh coal mine and the Beyskoye coal deposit. The commercial reserves of coal from the Beyskoye coal deposit amount to 1.36 billion tons.