The world’s largest coal-producing country, Russia, plans to increase its output and exports over the next 15 years. Russia’s share of the global coal export market is projected to expand to 25 percent from the current 11 percent.
According to a draft document on state strategy issued by Russia’s Ministry of Energy, production will grow to 448-530 million tons annually until 2024 and up to 485-668 million tons annually until 2035.
Domestic coal consumption will increase by over 12 percent; it currently stands at around 196 million tons annually. The Asia-Pacific states, Southeast Asia, the Middle East and Africa will continue to be the major markets for Russian coal.
Russia is already exporting substantial amounts of coal to China (some 30 million tons per year) yet there remains great potential for a boost in exports in the coming years. The energy ministry expects exports to China to almost double within the next 10 years to 55 million tons, from their current level.
Another Asian market, India, also plans “significantly increasing” coking coal imports from Russia’s Far Eastern ports. Vietnam has already tripled its purchases of Russian coal on the back of the commissioning of several new coal-fired power plants. Meanwhile, the US Energy Information Administration (EIA) expects Russia to overtake Indonesia as the leading thermal coal exporter within this decade.
Coal mining has been a key industry in Russia for a long time, with the costs of production among the world’s lowest.
Combined with high transportation expenditures, primarily on rail transport, those factors make the final price of Russian coal almost comparable to the prices offered by some of Russia’s major global competitors, such as Australia and South Africa.
Russia’s transportation authorities are currently looking into the possibilities of expanding export capacities of coal, which has become the most important exported commodity in terms of railway throughput. They plan to start more active development of railway and port infrastructure, including expansion of the capacity of the Trans-Siberian Railway and the Baikal-Amur Railway.
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