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Pulse of Charcoal - May 8

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

Pulse of Charcoal - May 8
Special project Coal of the East of Russia

A brief overview of the global coal market

Last week, the price of thermal coal in the EU reached its highest values ​​since March 2019, exceeding $ 80 / t. The growth of the indices was due to the news about the breakdown of the economic dialogue between Australia and China, a decrease in average daily temperatures in a number of European countries and an increase in natural gas prices on the European TTF trading platform to 24.8 euros / MWh (+3.2 euros / MWh by 28.04.2021). The cost of quotas for carbon dioxide emissions exceeded 50 euros / ton, which is the highest figure since the introduction of this instrument on the stock exchange in 2005. Coal reserves at ARA terminals amounted to 4.3 million tonnes (+0.3 million tonnes, or + 9% to 28.04.2021/XNUMX/XNUMX).

Limited supplies of coal due to repairs on a railway line linking South African coal provinces and the port of Richards Bay have strengthened the indices of export material of South African origin above $ 100 / t. 06.05.2021/3.1/0.1 South African operator Transnet plans to resume shipping coal by rail. Material reserves in the port of Richards Bay are 28.04.2021 million tons (-XNUMX million tons to XNUMX). In addition, against the backdrop of a worsening epidemiological situation in the country, the Port Authority of Richards Bay has decided to tighten the checks on arriving ships.

Strong demand from Korean generating companies for thermal coal from Australia against the backdrop of limited export supplies of the material contributed to the growth of quotations above $ 94 / t.

In March 2021, the volume of steam coal exports from Australia amounted to 13.5 million tons (-4.70 million tons compared to March 2020). This is the lowest since March 2013. The main reasons for the drop in export supplies are the Chinese government's ban on imports of Australian coal, introduced in 2020, as well as floods in Australia at the end of March 2021 that flooded some coal mines. 

Demand from Chinese generators for Indonesian coal supported material indices above $ 88 / t. Market participants expect further growth in business activity after the end of public holidays.

Growth in demand for Australian coking coal from metallurgical plants in the Asia-Pacific region had a positive effect on the dynamics of coal prices from Australia, strengthening them above $ 108 / t.


The government approved the 2nd stage of modernization of BAM and Transsib

On May 3, 2021, the Russian government approved the second stage of the project to expand the Trans-Siberian and Baikal-Amur Mainlines. The first stage of modernization, including the construction of 670 km of tracks, is planned to be completed in 2021. The second stage involves the construction of more than 1.3 thousand km of tracks. The total investment in the project until 2024 may amount to 780 billion rubles. ($ 10.4 billion).

It is assumed that by 2024 the throughput capacity of TransSib and BAM will increase 1.5 times to 180 million tons for all types of cargo.

Modernization of the BAM and Transsib is necessary to fulfill the plan outlined by Vladimir Putin.

On March 05, 2021, in accordance with the statement of the President of Russia, by 2024 the coal companies of Kuzbass must increase export supplies of coal to the east to 68 million tons per year (see Russian Coal Weekly of March 05, 2021). In addition, in 2021 the enterprises of Yakutia plan to increase production to 39 million tons, and by 2024 - to 80 million tons. There are two large coal producers in the region: Kolmar and Elgaugol. Both companies intend to increase production volumes as well as existing port facilities. The throughput capacity of the new coal terminal VaninoTransUgol (VTU), built by Kolmar's subsidiary Anna Tsivileva, is 12 million tons per year. Transshipment volumes will increase by 24 million tons by 2022. Albert Avdolyan's A-Property also plans to build a coal terminal in the port of Vanino with a capacity of 2024 million tons of coal per year and an enrichment plant on Elga with a capacity of 30 million tons by 32. (end of 2021) and 45 million tons at the second stage (2023).


CPC's loss increased to RUB 5 billion.

The net loss of the Kuzbass Fuel Company (CPC) in 2020 doubled to RUB 4.8 billion. ($ 64.2 million) compared to 2019.

According to CPC representatives, in 2020 the company was forced to reduce coal production to 9.4 million tons (-6.2 million tons or -40% by 2019) amid the Covid-19 crisis and declining demand from India and China. ... Nevertheless, CPC expects a recovery in steam coal prices until 2023. In 2021, the company plans to increase production to 11 million tonnes (+1.6 million tonnes or + 17% by 2020).

Photo: CPC

Due to a decrease in income, the company did not fulfill a number of conditions of the loan agreements and now plans to restructure its debt until 2022. CPC has agreed on the terms of restructuring the loan portfolio with six Russian and foreign banks.

CPC is a Russian coal company that includes the Vinogradovskiy, Karakanskiy-Yuzhny, Cheremshanskiy and Bryanskiy open-pit mines, two concentrators, a distribution network and infrastructure companies. CPC is owned by Mikhail Gutseriev's SAFMAR group, which also owns Russian Coal.


VGK will create a green coal cluster in Sakhalin

The Eastern Mining Company (VGK) plans to create a green coal cluster on Sakhalin. On April 26, 2021, according to the statement of the Chairman of the Board of Directors of VGK Oleg Misevra, the cluster includes three separate projects: the construction of a main conveyor with a length of 23 km, the creation of a wind farm with a capacity of 67 MW and the development of an electric dump truck. According to the company's preliminary calculations, the implementation of the Green Coal Cluster project can reduce the carbon footprint by 64 thousand tons of carbon equivalent and reduce CO2 emissions by 176 thousand tons per year.

Photo: VGK

VGK has already begun construction of a main conveyor for transporting coal from the Solntsevsky coal mine to the Shakhtersk Coal Sea Port. The project cost is estimated at 7 billion rubles. ($ 90.74 million). The launch of a closed-type conveyor with built-in dust collection equipment is scheduled for the end of 2021. In addition, the project provides for the construction of a highway required for maintenance of the conveyor gallery.

The wind farm will include 16 wind turbines located in areas with high wind energy potential. Two sites have been selected for the installation of the turbines, where the wind speed will be monitored until the end of 2021.

VGK and the manufacturer of automotive equipment BelAZ are jointly developing an electric dump truck with a carrying capacity of 220 tons. The use of such transport will lead to a decrease in the consumption of fossil fuels and to preserve the climate.

WMC is the main coal mining company in Sakhalin, accounting for about 80% of all production in the region. The company belongs to the Cypriot holding Altraso Ventures Ltd., the former CEO of SUEK Oleg Misevre and the head of the ICT Group Alexander Nesis. VGK is the largest Russian exporter of brown coal. The company owns the Solntsevsky coal mine and the Shakhtersk Coal Seaport. The coal reserves of VGK are more than 300 million tons, the volume of coal production by the company in 2020 amounted to 11 million tons (+1.8 million tons or + 20.3% by 2019).

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