Russia plans to gradually increase coal production and exports in the future

Industry Trends

2020-06-01

Source：This site date：6509

　　Russia plans to increase its annual domestic coal production to 485-668 million tons by 2024 and 485-668 million tons by 2035, according to a draft national energy development strategy.

　　In the draft, Russia's energy ministry said it planned to double coal exports over the next 15 years, in addition to sharply increasing domestic coal production.

　　Russia's coal industry has seen huge growth in recent years. In 2019, the country produced 440 million tons of coal, up from the previous 11 years. Under the new growth strategy, domestic coal consumption is expected to rise by more than 12 per cent from current levels to 196 million tonnes by 2035. The country's share of the global export market for coal will increase from the current 11% to 25%.

　　In the future, Russia's main export markets will remain asia-pacific, Southeast Asia, the Middle East and Africa. Despite recent plans by the world's major coal consumers and producers, such as China and India, to reduce coal's share of the overall energy mix over the next decade, Russia still has high hopes for these regional markets.

　　However, given that the share of coal in western electricity markets will fall to almost zero in the next few years, this could hamper Russia's ambitious export plans.

　　At the same time, Russian energy ministry analysts and energy sector experts agree that to increase exports, Russia needs to squeeze other suppliers out of the market. That, they argue, depends on Russia's ability to keep coal production costs at current low levels.

　　While Russia was able to create low global production costs while producing high-quality coal, the high cost of transport, such as rail, brought the final price of Russian coal almost in line with that of other major exporters, including Australia, Indonesia and South Africa.

　　Analysts are more hopeful about thermal coal. According to most analysts' forecasts, global thermal coal demand will continue to grow in the next few years, at about 1-3% a year.

　　At the same time, in an effort to diversify its coal supply, Russia has also focused on the east and begun more aggressively developing rail and port infrastructure to support coal exports.

　　Russia's plan to increase coal production and exports in the future is a rare opportunity and a huge challenge for Seed . The increase in coal production has been accompanied by a growing demand for coal mining tools and other possible solutions to challenges. Seed will also expand its business in Russia and develop more partners to help increase coal production in Russia.

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