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Pulse of Charcoal - April 23
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, coal indices in Europe continued to strengthen over $ 74.5 / t. A decrease in average daily temperatures in a number of European countries contributed to an increase in coal consumption. The rise in natural gas prices on the European TTF trading floor to their maximum values in the last 3 months at 21.4 EUR / MWh (+2.3 EUR / MWh by 01.04.2021) had a positive effect on the quotes of the energy material in the EU. An additional factor supporting prices was the decrease in wind power generation to 779 GWh (-224 GWh by April 14.04.2021, XNUMX), which increased the demand for coal from local power plants. Nonetheless, market participants fear that the current maximum value of the carbon dioxide emission allowances will reduce the profitability of coal-fired power plants.
The instability in the Indian market, caused by a new outbreak of the coronavirus in the country, weakened the quotations of the export material from South Africa below $ 91 / t. On April 16.04.2021, 6, the Indian government introduced a 3.5-day quarantine in a number of provinces. However, several large shipments of coal to Pakistani cement companies have stabilized indices for high-calorie South African coal this week. Coal reserves at Richards Bay terminals amounted to 0.1 million tons (+14.04.2021 million tons to April XNUMX, XNUMX).
The largest South African bank Nedbank plans to stop financing new coal projects from 2025. Currently, the bank's management is reducing the share of coal, oil and gas assets in the portfolio due to pressure from green organizations promoting the interests of companies in the field of alternative energy sources in the government SOUTH AFRICA.
Demand from energy companies in the Asia-Pacific region, due to a decrease in average daily temperatures in the region, strengthened quotations of Australian coal above $ 91 / t. However, the slowdown in trading activity of Indian buyers ahead of the monsoon season may have a negative impact on prices in the medium term.
The increase in electricity consumption in China contributes to an increase in the demand of local generating enterprises for low-calorific coal from Indonesia, which contributes to the growth of indices above $ 87 / t According to the state power grid corporation of China, in January-April 2021 the volume of electricity consumption in the country increased by 9 % compared to the same period in 2020
Low steel prices reduce the interest of metallurgical plants in the Asia-Pacific region in coking coal from Australia, which puts pressure on the indices at $ 110 / t. Nevertheless, market participants expect a recovery in demand for steel products and an increase in indices in the medium term.
Rostec, CoalStar and Sibanthracite will take part in the auction for the development of the Bogatyr open-pit mine
The Federal Agency for Subsoil Use of Russia (Rosnedra) has put up for auction a license for the development of the Bogatyr coal mine located at the Gorlovskoye coal deposit in the Novosibirsk region. The mine reserves are 300 million tons of anthracite. The starting price of the auction is 1.5 billion rubles. ($ 19.6 million). The final cost of the license may exceed 20 billion rubles. ($ 132 million).
On April 19, 2021, a subsidiary of the state corporation Rostec - Rusinvestproekt established the RT-Bogatyr company to participate in the auction. In addition to Rostec, CoalStar, owned by Eduard Khudainatov, and the Sibanthracite group, owned by Dmitry Bosov's heirs, are interested in the project. Given the fact that companies with beneficiaries registered in offshores are not allowed to participate, Albert Avdolyan's A-Property cannot claim an asset. However, in February 2021, A-Property signed an agreement with the Alltek group on the basic conditions for the acquisition of the Sibanthracite group for $ 1 billion.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 company already extracts anthracite at the Kolyvansky, Gorlovsky and Vostochny coal mines located at the Gorlovsky coal deposit.
The winner of the auction must guarantee the transportation of at least 10 million tons of coal per year along the Berdsk-Novoaltaisk railway line, adjacent to the Trans-Siberian Railway. Also, the company responsible for the development of the Bogatyr open pit will have to build at least five large-tonnage specialized vessels for the export of coal.
Rostec is a Russian state-owned corporation created to facilitate the development, production and export of high-tech products and controls assets in various industrial sectors. Over the past year, the corporation has expanded its portfolio of coal projects. In March 2021, A-Property transferred 5% in the Elga coal complex to Rostec. The state corporation also owns 25% in the Ogodzhinsky coal project with reserves of 1.5 billion tons of coal and 25% in the coal terminal of the port of Vera in the Primorsky Territory.
CoalStar is a coal mining holding that includes the Mayrykh coal mine and the Beyskoye coal deposit. The commercial coal reserves of the Beyskoye coal deposit amount to 1.36 billion tons. In 2020, the company produced 4 million tons of coal. By 2030, CoalStar intends to increase coal production to 30 million tons.On April 14, 2021, the CoalStar holding announced its plans to create a railway operator in 2022.
The Cabinet of Ministers proposed to limit the use of ship-or-pay in the export of coal
On April 15, 2021, at a meeting of the Government of the Russian Federation, First Deputy Prime Minister of Russia Andrei Belousov proposed to limit the use of the ship-or-pay mechanism for transporting coal and use it only for additional volumes of material exported from Kuzbass.
On March 2, 2021, Russian President Vladimir Putin called for an increase in coal exports from Kuzbass to the East to 68 million tons by 2024. In this case, the new mechanism will cover only a maximum of 15 million tons of coal per year. Moreover, the first 5 million tons of additional volumes should not fall under the new rule, since they are already provided for by the coal industry development program. The proposal is motivated by the need to conduct an experiment before the full-scale introduction of the method.
Ship-or-pay is a clause in contracts, according to which mining companies receive priority access to the railway infrastructure, subject to prepayment for the entire volume of traffic declared in the contract with Russian Railways.
However, according to experts, prepayment under ship-or-pay agreements will be reflected in the financial statements as a long-term obligation, which will increase the debt burden of coal mining enterprises.
Russian Railways has suspended construction of the Kyzyl-Kuragino railway line
On April 20, 2021, Russian Railways, at the request of the customer, suspended the contract for the construction of the Elegest-Kyzyl-Kuragino railway line to the Elegest coal deposit. In 2019, Russian Railways signed an agreement on the construction of a railway line with the Tuva Energy Industrial Corporation (TEIC), owned by Russian businessman Ruslan Baysarov. However, the Russian government decided to suspend the concession for up to five years without levying fines and penalties.
Russian Railways planned to spend 5 billion rubles on the design of the railway line. ($ 6.6 million).
It was expected that the length of the new Elegest-Kyzyl-Kuragino line will be 410 kilometers. It was supposed to become the first railway in Tuva, connecting the region with the Trans-Siberian Railway. It was assumed that the volume of cargo transportation along this 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), construction period - 4.5 years.
TEIC is a Russian industrial company. In 2013, TEIC announced plans to start developing the Elegest coal deposit with reserves of 840 million tons of coking coal and 15 million tons of steam coal. In addition, the company planned to build a new coal terminal in the port of Vanino, near Cape Burny. However, at present TEIC has decided to postpone the implementation of its plans.