Moscow, August 27 - "Vesti.Ekonomika". Coal is key view fuels in global energy. It accounts for almost 40% of global electricity production. Thus, coal is the leading source of electricity.
Coal dominates the global energy scene due to its abundance of resources, availability and widespread distribution throughout the world.
Coal reserves are estimated at 869 billion tons at current production levels. This means that coal should last almost 115 years.
It is noted that significant coal reserves are located in Asia and South Africa.
Despite the fact that recently there has been more talk about renewable energy sources and linking the use of coal to global climate change, it is coal that accounts for the largest increase in energy consumption in recent years.
Almost 90% of the world's coal is mined by 10 countries. Below we will talk about the largest coal-producing countries.
10. Ukraine
In 2013, coal production in Ukraine was about 64.976 million tons. However, to date, coal production has decreased significantly due to the armed conflict in the country, which especially affects the eastern regions.
It is also important to note the fact that statistics on coal production in the country may not always be unambiguous, depending on how data on the LPR and DPR, which are important coal-mining regions, are taken into account or not taken into account.
In 2017, 34.916 million tons of coal were produced in Ukraine, according to the Ministry of Energy and Coal of Ukraine. Let us recall that in 2016 Ukraine increased coal production by 2.82% to 40.86 million tons.
Thus, in 2017, coal production in Ukraine decreased by 14.5%.
The gap from the plan for 2017 of 35.322 million tons was 1.1%.
BP statistics give approximately the same figures: according to their data, in 2017, 34.375 million tons were produced in Ukraine.
9. Colombia
In 2013, the level of coal production in Colombia reached 85.5 million tons.
This was 4% below the target of 89 million tonnes. Coal exports were estimated at 94.3%.
The National Mining Agency announced an 18% increase in mining production.
8. Kazakhstan
Kazakhstan ranks 8th in coal production. As of December 2012, production here amounted to 116.6 million tons.
If consumption is taken into account, Kazakhstan ranks 12th, with coal accounting for 85% of all power plant capacity.
The country's coal reserves are estimated to be around 33.6 billion tonnes. There are more than 400 coal mines in Kazakhstan.
7. South Africa
South Africa produces about 260 million tons, so the country ranks 7th in terms of production.
In addition, the country is the 6th largest coal exporter in the world.
According to data for 2012, coal exports amounted to 74 million tons.
South Africa supplies coal mainly to European countries, China and India.
It is noted that coal accounts for almost 90% of South Africa's electricity.
6. Russia
Russia ranks 6th in terms of coal production.
As of 2012, production amounted to 354.8 million tons, of which 80% is thermal coal, and the rest is coking coal.
Russia also ranks 5th in terms of coal consumption.
If we talk about exports, then, according to data for 2012, the country exported 134 million tons, becoming the third largest exporter in the world.
5. Indonesia
Indonesia ranks 5th in coal production with 386 million tons.
Indonesia and Australia for a long time were the main competitors in coal production with almost identical production figures.
However, Indonesia overtook Australia in 2011, and Australia now leads the region.
Coal accounts for 44% of Indonesia's electricity.
According to 2012 statistics, the country's coal reserves amount to 5.5 billion tons.
4. Australia
Australia's coal production reached 413 million tonnes in 2013, making the country the fourth largest producer in the world.
Australia exports about 90% of its coal, ranking among the world's leading exporters.
In 2012, coal exports amounted to 384 million tons. Australia's coal reserves are estimated at 76.4 billion tonnes.
3. India
Coal production in India reaches almost 605 million tons, thus making this country the 3rd largest coal producer in the world.
In addition, India ranks 3rd in terms of coal consumption in the world.
India is also one of the three largest importers of coal - about 160 million tons per year. Only China and Japan are ahead of it.
68% of the country's electricity is generated from coal plants.
2. USA
Coal production in the United States, according to data for 2012-2013, amounted to 922 million tons, which is approximately 13% of global coal production.
It is the second largest producer and also the second largest consumer of coal in the world.
Thus, coal consumption in the United States is approximately 11% of the global level.
Almost 37% of the country's electricity is generated from coal-fired power plants. US reserves are approximately 237 billion tons.
1. China
China has been the largest coal-mining country in the world for almost thirty years.
As of 2013, coal production level was almost 3.7 billion tons, accounting for 47% of global coal output.
The country also consumes more than half of the world's consumption.
The country ranks 3rd in terms of reserves - 114.5 billion tons as of December 2012.
Russia is the sixth largest coal producer in the world (after China, USA, India, Australia, Indonesia). Despite the difficult economic situation in 2015 and the fall in coal prices, the Russian coal industry not only survived, but also showed an increase in production. The total volume of coal production in 2015 amounted to 373 million tons (in 2014 - 358 million tons), of which 155 million tons (in 2014 - the same) were exported.
In terms of global reserves, coal surpasses all other types of fossil fuels. The reserve ratio R/P (the ratio of remaining reserves to annual production) for coal is more than 122 years, for oil - 42 years, for gas - 60 years. In addition, coal reserves are distributed evenly throughout the globe, which eliminates interruptions in the supply of this fuel.
Russia has the second largest coal reserves in the world: 173 billion tons (in the USA - 263 billion tons). The coal industry includes more than 240 coal areas, including 96 with underground mining and 150 with open-pit mining. The main coal reserves are located in the Kuznetsk basin (52%), Kansk-Achinsk basin (12%), Pechora basin (5%), and South Yakutsk basin (3%). Proven coal reserves in Russia are enough for 800 years of use.
About 150,000 Russians work in coal mining. As of the end of 2015, there were 192 enterprises engaged in coal mining (processing). Coal enterprises are city-forming for more than 30 cities and towns with a total population of more than 1.5 million people.
Table 1 shows the production volumes of the main coal companies in the Russian Federation. The table shows that the three largest coal companies include the Siberian Coal Energy Company (one of the world's largest coal producers), Kuzbassrazrezugol Management Company (the largest coal mining company in Russia open method) and the Holding Company "SDS-Coal" (about 88% of mined coal is exported).
Table 1. Production volumes of the main coal companies of the Russian Federation
As a characteristic of the Russian coal industry, it should be noted that the largest coal companies are private, which is a prerequisite for their high competitiveness. The coal industry operates under market pricing conditions; investment projects are financed using its own and borrowed funds (about one third of the total investment).
When analyzing the cost of Russian coal, it is necessary to mention that an important factor in the cost structure is the high cost of rail transportation. By comparison, in other leading coal producing countries, mining sites are located close to major seaports, so transportation costs are minimal. The bulk of coal within the Russian Federation is delivered from Kuzbass by rail. The average distance of transportation by rail from the Kuzbass fields to the ports of the Baltic and Black Seas is 4500-5000 km, to the eastern ports - 6000 km. For reference: the freight price from Australia to China is approximately $9/t of coal, from Brazil - $22/t, the cost of transshipment at ports is $2-4/t. For comparison, the railway tariff for transporting coal from Siberia to the Far Eastern ports in 2014 was more than $35/t.
Separately, it should be mentioned that it is important competitive advantage For Russian coal exporting enterprises, the ruble became “weak” in 2015. In dollar terms, production costs and transport costs have decreased. It becomes profitable to export until ruble inflation covers the created difference.
The average structure of the cost of coal production in 2015 is shown in Table 2. The table shows that most of the cash production costs are made up of material costs (especially fuel and energy) and labor costs.
Table 2. Average cost structure of coal mining
Analyzing the world market, it should be mentioned that the coal supplied for export is mainly represented by high-quality coking and thermal coals. There is virtually no international trade in brown coal.
About 2/3 of the world's steel comes from pig iron, which is smelted in blast furnaces using coke, which is produced from coking coal. Coking coal is characterized by low sulfur and phosphorus content. Therefore, this type of coal is rare and expensive.
More than 29% of the world's power plants operate on the basis of thermal coal. The main characteristics of thermal coal are calorific value(calories) and sulfur content. All coal mined in Kuzbass, regardless of grade, is characterized by low sulfur content. In Russia, coal with a calorific value of 5100 kcal/kg is predominantly consumed. For reference: in China and South Korea, coal with a calorific value of 5500 kcal/kg is consumed, Japan and Western Europe they use coal with a calorific value of 6000 kcal/kg.
Five countries play a key role in the global supply of coal and the formation of world coal prices, providing 70-80% of exports: Australia, Indonesia, Russia, China and South Africa. Demand for coal is determined by developing countries: primarily China and India. The main consumers of coal products are Japan, China (including Taiwan) and South Korea. The largest importers of coal on the Asian market are Japan, South Korea, India and Taiwan, and on the European market Germany and the UK.
The main coal purchase and sale transactions are presented in the world in the form of long-term contracts, spot transactions and derivatives financial instruments.
Long-term contracts between producers and consumers of coal, as a rule, are concluded in the event of an agreement on the supply of coal of a certain quality and composition, the uninterrupted supply of which can be carried out by this particular manufacturer.
Spot transactions are the most widespread in the coal market. Coal delivery in such transactions is made within 90 days, and payment is made at current market prices.
Futures, forwards, options contracts and swap-type transactions with coal are concluded on the world's leading exchanges. Such transactions traditionally do not involve physical delivery of coal, and settlements are made only in cash. The main participants in the derivatives market are price risk managers and speculators. The presence of an element of speculation allows for high liquidity of the coal derivatives market.
The main platforms for trading coal derivatives are ICE (Intercontinental Exchange; Atlanta, USA) and NYMEX (New York Mercantile Exchange; New York, USA) with trade shares of 32% and 68%, respectively.
Attempts were also made to introduce physical delivery of coal futures trading on the ASX (Australian Securities Exchange; Sydney, Australia) in 2009, but due to a lack of liquidity, coal derivatives were delisted in 2010.
An attempt to organize trading in coal derivatives on EEX (European Energy Exchange AG; Leipzig, Germany) with cash settlements in euros was similarly unsuccessful. The listing of these contracts was discontinued in February 2016. However, the listing for contracts with settlements in US dollars remains active on the exchange.
The main types of prices on the world coal market are BOV and CIF prices. FOB (free on board) price is the price of coal plus internal transportation costs from the mine to the shipping port terminal in the exporting country. CIF (Cost, Insurance and Freight) price - includes the FOB price plus all international transportation costs to the destination port terminal in the importing country.
Prices for all types of coal purchase and sale transactions are determined using indices determined by international pricing agencies. A list of key coal indices is given in Table 3. The table shows that the global coal market is divided into two largest segments: Asia-Pacific and Atlantic.
Table 3. List of key coal price indices
The current situation on the world market is characterized by an excess of coal supply over demand, which has led to a long-term decline in prices, and negative influence to exporting enterprises. For reference, Indonesian coal supplies could fall by 17% during 2016 as the world's largest coal supplier suffers losses and cuts production. Indonesia will export less than 300 million tons in 2016 versus 360 million tons in 2015. Cash flows for about 60-70% of Indonesian coal producers are insufficient to support business.
The main reference point for coal prices on the world market is the price of thermal coal, since this type of coal is used to produce electricity and can compete with oil and gas. To illustrate the energy nature of coal, Figure 1 shows the price dynamics of oil and coal futures (NYMEX). The figure shows that the price charts for oil and coal show fairly similar dynamics.
Rice. 1. Futures price dynamics for oil and coal (NYMEX)
To determine the magnitude of the relationship between changes in oil and coal prices, Figure 2 shows the magnitude of changes in futures prices for coal and oil for the same periods of time according to NYMEX data for 2011-2015. The correlation coefficient for price changes is 0.83. Thus, we can conclude that there is a high correlation between oil and coal futures prices. This correlation may continue in the future.
Fig.2. Changes in coal and oil futures prices over the same time periods (NYMEX)
According to some experts, the lower limit of oil prices on the world market is the cost of shale oil production in the United States (on average $20-30 per barrel at the beginning of 2016), and the upper ceiling is accordingly represented by the expectation rapid growth shale production with rising prices. That is, in the near future, prices will be formed mainly in the range of $20-40 per barrel, adjusted for the current cost of shale oil production in the United States.
Possible risk for the development of the coal industry is the likelihood of the industrial development of plasma fracturing technology (hydraulic fracturing is not applicable, since shale deposits are located in mountainous areas far from water sources) in China and the emergence of a Chinese shale boom.
In addition, it is known that significant emissions occur when coal is burned in power plants. carbon dioxide into the atmosphere and the emergence of the greenhouse effect. Of the fossil fuels, coal is the most problematic from a climate change perspective because it has the highest carbon content.
In order to prevent global warming, the UN adopted a climate agreement in 2015, which must be signed by at least 55 countries out of 196 between April 22, 2016 and April 21, 2017. The agreement will limit the burning of fossil fuels and create new renewable energy sources in accordance with the baseline and 2 Celsius World scenarios (keeping the planet overheating above 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels).
In connection with the ongoing fight against global warming, on January 15, 2016, the US Presidential Administration announced that it would cease issuing new loans to coal enterprises on federal lands (40% of US coal production). It is assumed that during the transition period (20 years) the US coal industry will be significantly reduced.
Plans to reduce CO2 emissions also create another threat to coal in developed countries: oil companies (British Petroleum, Shell, Exxon) are trying to take the place of coal companies in the market by offering a progressive scale of taxes on CO2 emissions.
As one of the options for reducing CO2 emissions at coal-fired power plants, it is proposed to capture and store carbon dioxide by injecting it into carbon masses. One of these projects will be the first-ever industrial-scale carbon dioxide storage plant (Boundary Dam, Canada), construction of which began in October 2015. As features for enterprises of this type, it is necessary to note the need for a significant amount of electrical energy and the danger of leakage of stored CO2.
Analyzing Russian market coal, it should be mentioned that Russia is the third largest supplier of coal for export (after Australia and Indonesia). The shares of supplies to Europe and Asia are approximately 56% and 44%, respectively.
Important export destinations: South Korea, China, Japan, Europe, Turkey and India. Russia's share in the European coal market is 32%, and in the Asian market only 5%. Russian coal supplies to Europe come mainly from Western ports: Murmansk, Ust-Luga (Leningrad region), and the port of Riga. Supplies to Asia come mainly from eastern ports: Vanino (Khabarovsk Territory), Vostochny (Primorsky Territory), and the port of Rajin (DPRK). Transportation of coal by sea is carried out by bulk carriers.
The international agency Argus is responsible for determining export prices for Russian coal. Export prices for Russian coal are calculated based on coal prices in the ports of North-West Europe (SHARA) and in the ports of South Korea (CIF South Korea), which are published daily in the Argus Coal Daily International.
The FCA price is often used for trading Russian coal. FCA price (freecarrier, free carrier) - the goods are delivered to the customer’s main carrier at the departure terminal specified in the contract, export duties are paid by the seller. To calculate FCA Kuzbass prices, the freight price, the cost of stevedores' work, the cost of rail transportation from Kuzbass to seaports and border crossings, related expenses.
Figure 3 shows the dynamics of prices for Russian coal exported on EOBVostochny terms. The figure shows that from 2011 to 2015, prices for Russian coal exports fell by almost 50%.
Rice. 3. Dynamics of prices for Russian coal exported on FOB Vostochny terms
In the domestic market of the Russian Federation, the main consumers of coal are heat and electricity generating stations, enterprises in the housing and communal services sector and enrichment plants. Since their construction, most heat and power generating stations have been aimed at consuming brown and hard coal of low and medium calorific value (about 5,100 kcal/kg), located in the immediate vicinity of such stations, which is the reason for the low domestic demand for high-calorie grades of coal and gives the ability to send high-calorie coal for export. However, as a result of the modernization of existing capacities and the construction of new highly efficient coal power plants, the demand for high-calorific coal may increase in the future.
It should be mentioned that Russia has the potential to increase the share of coal in the country's energy balance by replacing more expensive fuel oil with coal. In addition, there is potential for the transfer of cheap electricity from Siberia to the zone of Europe and the Urals and the possibility of developing electrical grid connections between the territories of the country.
Metal Expert indices are used to determine domestic prices for Russian thermal coal. Prices are adjusted for each region depending on the brand of coal, its calorie content and delivery costs.
Also, price quotes on the domestic market of the Russian Federation are published by the Argus Media agency. Argus quotes thermal coal: low-volatile grade T (6000 kcal/kg), highly volatile, widely used grade D (5100-5400 kcal/kg), graded coal DPK (5,200-5,400 kcal/kg) and grade SS coal ( 5700 kcal/kg). T grade coal is used by some power plants in the European part of the Russian Federation, as well as cement manufacturers and metallurgy enterprises. Coals of grade D and WPC are widely used at power plants and housing and communal services enterprises. CC grade coal is used by some power plants in conjunction with other grades to improve the economics of power generation.
According to most expert forecasts, global coal demand is expected to grow by at least 0.8% per year between 2015 and 2035. Coal consumption in non-OECD countries will increase (by an estimated 1.1 billion tons of oil). equivalent), which will be partially offset by a decrease in coal consumption in OECD countries (-0.4 billion tons of oil equivalent). The growth rate of coal consumption is the highest compared to other energy sources and coal, as a cheap and accessible fuel, is a driver of rapid economic growth in developing countries. In 2040, countries in the Asia-Pacific region are expected to consume 4/5 of coal exports. And by 2030, their energy consumption will increase by 33%. Coal now accounts for 48% of the region's energy mix. The forecast for the dynamics of coal consumption by country is presented in Figure 4. The figure shows that OECD countries will significantly reduce coal consumption after 2020, India and other developing countries will increase coal consumption, for China an increase in coal consumption is expected, reaching a constant level of consumption after 2025.
Rice. 4. Forecast of coal consumption dynamics by country
As for the dynamics of coal production in the Russian Federation, the Development Program of the Russian Coal Industry until 2030 contains two scenarios: an increase in production by 2030 to 480 million tons (technological modernization) and 410 million tons (conservative scenario).
As a result of the analysis, the following was established:
- Coal is a strategically important raw material for the global energy and metallurgical industries. The overall demand for coal in the world will grow over the next twenty years, primarily due to the increasing needs of developing countries for cheap energy;
- In developed countries, on the contrary, there is a tendency towards a decrease in coal production and exports due to climate problems caused by this fuel. The market share of developed countries will be freed up for other exporting countries;
- The coal industry in Russia has significant reserves of high-quality coal and, given changing market conditions, it has significant opportunities for growth, both in the export direction and in the domestic market. A major contribution to the development of the coal industry will be made by the implementation of investment projects for the development of transport infrastructure, development of new deposits, creation of coal mining clusters in Siberia and the Far East. Growth in Russian coal exports is expected mainly in the direction of the Asia-Pacific region.
Bibliography
3. Formation of international prices for coal. Report of the Energy Charter Secretariat, 2010 (Brussels, Belgium).
4. Development program of the Russian coal industry for the period until 2030.
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By increasing export supplies, companies from Russia spurred an increase in resource extraction and profits from their sales. We have prepared an article about the markets that domestic enterprises can already accept, where gas can displace coal and whether there are reasons why one should not abandon dangerous coal mining methods, but most importantly, what is currently .
Coal exports from Russia in 2017
Expert opinion at the moment is that coal prices will rise in the near future. The reason for this lies both in the revival of the global economy and in increasing demand for low-cost coal generation in African, Middle Eastern and Asia-Pacific countries.
During the period from 2011 to 2016, when there was a prolonged decline in prices on the world market, many companies (primarily in the United States of America) became bankrupt. Until last year, supply on the coal market was higher than demand, but then everything changed.
When demand began to exceed supply, the international market showed an increase in quotations. The average FOB price (English free on board - a scheme when the goods, after delivery to the port, are loaded onto the buyer’s ship, after which the costs and risks fall on him) for coal from Russia on the spot market in the eastern direction increased from $52 in May 2016 to $91 per ton in August 2017; in the Baltic ports the starting price ($46) increased to $80.
Export growth has become one of the key factors in increasing coal production in Russia (since the 2000s). Today, the share of coal exports from Russia is more than 50% (and this is in a situation of decline in the domestic market).
What is this connected with? Over the past few years, coal from Russia has begun to attract more and more attention due to its high consumer characteristics, reliable supplies and, although many note the remoteness of coal mining points, convenient geographical location port infrastructure in Russia (routes for sea delivery of coal to the main importing countries in the Atlantic and eastern directions are considered short).
Coal supply companies from Russia strive to make maximum use of the mentioned prerogatives. According to 2016 data, coal exports from Russia for the first time ever were higher than the volume of supplies to the domestic market.
Based on Federal Customs Service data, the volume of exports to Ukraine in 2016 was equal to 9.9 million tons, which is 10.2% higher than last year’s figure. If we talk about the total volumes of coal exports from Russia, then exports to Ukraine are 6%. This year, deliveries there are carried out in the same volume as in 2016. Because it is important for domestic companies to preserve the Ukrainian sales market.
The areas that, like the coal market in China, are priority areas are fast-growing sales markets in:
-
Vietnam;
Malaysia.
South Korea;
Share of coal exports from Russia in total imports listed countries growing. The reorientation of Indonesian coal to the domestic market can also be considered a favorable factor; this makes the conditions for the export of Russian coal simpler.
Let’s not forget that African countries (Egypt, Nigeria, Malawi, Kenya, Zambia, Congo, Ghana, Guinea, Senegal and Tanzania) do not have the opportunity to introduce “clean” but more expensive energy sources, so they will remain in the energy sector as before , focus on relatively inexpensive coal technologies.
Coal generation in Russia in recent years
Due to the fact that in the past few years coal has begun to compete with gas and the emerging transition to new coke-substituting technologies for blast furnace smelting is noticeable, we can talk about a decrease in demand for coal (domestic market).
The preservation of the share of coal generation will be facilitated by improving the quality of coal, reducing the cost of production and delivery, and using technologies that reduce emissions from thermal power plants to maximum permissible concentrations. At the same time, the share of coal in generation is not an end in itself: this parameter is influenced by a huge number of factors and nuances.
Thus, gas generation in the European part of Russia is a higher priority than coal. This is explained by the fact that gas, in conditions where its prices are regulated by the state, turns out to be a more competitive generation. If we talk about the Siberian region, then not everywhere there are alternatives to coal, which is often the only source of electricity and heat.
At the moment, investments in the industry have begun on a large scale (currently investments amount to 73.6 billion rubles); in 2017, an increase of another 22% is expected (up to 90 billion rubles).
In Russia, open-pit coal mining accounts for 73%. It is characterized by greater productivity, low cost, safety and prospects (if we talk about the prospects for the development of the domestic coal industry). However, it is not possible to completely eliminate the underground method of coal mining, because it is in these conditions that a large number of valuable and scarce grades of coking coal occur.
Open-pit mining, in turn, causes greater environmental damage due to the significant movement of rock on the earth's surface. It is possible to reduce damage if coal companies strictly carry out work on reclamation of disturbed lands and include Newest technologies coal mining with minimal land disturbance.
The Russian Ministry of Energy is developing schemes to reduce harm to environment: departments and coal companies can exclude overburden and host rocks from the waste category in order to use them for such production needs (this option is under development), such as:
backfilling of mined-out space;
reclamation of disturbed lands;
backfilling of gaps;
construction of roads;
production of building materials.
This method has become widespread throughout the world.
The Ministry of Energy today emphasizes that 20 mines (out of 58) in Russia have high risk occurrence of accidents. This was recorded during a commission to identify mines where coal mining is carried out in particularly dangerous mining and geological conditions.
To minimize risks as much as possible, coal companies have formed special programs for each operating mine. To finance these programs, you need to spend 44.1 billion rubles (from 2016 to 2020). Completion of all measures will lead to the fact that only four out of 20 mines will remain in the group with a high risk of accidents, and the remaining 16 will move into the group with a medium risk of accidents.
The commission handed over the developed recommendations to the coal companies and Rostechnadzor, and now Rostechnadzor will monitor the implementation of the activities of each of the special programs. The commission will summarize the interim results of this activity based on the results of the mines’ work in 2017.
Export of coal from Russia to China
In the first half of the year (according to the State Committee for Development and Reform (SCRD) of the PRC), coal exports from Russia (hard coal) to the PRC amounted to 13.14 million tons for a total of $1.17 billion. Coal exports from Russia in tons increased by 53.8%, and income from coal exports increased by 2.7 times.
Today Russia is in third place among coal suppliers to China (Australia is in first place: in January-June it supplied 38.47 million tons of coal to China (+23.8%)); Indonesia is in second place with 17.86 million tons ( +16.9 %)).
This sudden increase in coal exports from Russia to China is due to the medium-term plans of the country’s leadership to reduce its own production by 800 million tons in 2016–2020. In 2016, coal production in China decreased by 290 million tons, and in the first half of 2017 by 111 million tons (74% of the declared figures for this year).
In addition, another free niche has emerged in the form of China’s suspension of coal imports from the DPRK (starting from February 19 in pursuance of UN Security Council Resolution 2321 related to nuclear tests by North Korea). During the period from January to June, coal supplies from the DPRK to China decreased by 74.5% - to 2.68 million tons.
Analysts have been predicting a significant increase in China's coal imports for a long time, but there is a high probability that the situation favorable for coal miners will change in the near future. “Coal production in China is declining so far in favor of importers, and only partly. Further, it is planned that all future cuts will be based on changes in the needs of Chinese energy generation. So the potential time frame for successful coal exports to China is three years. If we talk about the market for gondola cars, even if exports to China simply stabilize, there will be a complete collapse, and this will happen in a maximum of two years.”
The PRC (as decided by the Chinese State Committee for Development and Reform) is deliberately suspending the development of coal generation: for now it has been stated that until 2020 (at least) coal-fired thermal power plants with a capacity of 150 GW will not be built in China. This decision is based on an attempt to deal with environmental problems. Also in China, it is planned to decommission 20 GW of outdated coal power plants and modernize 1 GW of coal thermal power plants. The plan is that by 2020 the installed capacity of coal power plants in China will not exceed 1.1 thousand GW. Despite this fact, in which it would seem that gas should be a logical way out of the situation, experts emphasize that one should not count on this too much.
Now China is the recognized leader in coal production throughout the world (annual production volume is more than 3.5 billion tons), but also the largest consumer. China acquires those grades of coal that are not available in the country or those volumes that are more profitable to bring to the north of China through import (when delivery from the south of China turns out to be impractical or unprofitable). At the same time, by 2018–2020, China wants to reduce production volumes by 700 million tons.
Over the past year, energy consumption in China increased by 1.3% (below the ten-year average of 5.3%), and coal consumption decreased by 1.6% (production by 7.9%), gas consumption increased by 7.7 %. Now the share of coal in the energy balance is not 64%, but 62%.
According to TASS data (based on Chinese customs statistics), the share of coal from Russia in the country’s total imports in the first half of the year was about 14% (more than 13 million tons worth $1.17 billion).
If Beijing does reduce coal generation, this (according to rough forecasts) will provoke a decrease in demand by about 400 million tons per year. The PRC is striving to supply new production mainly with its own coal. That is, taking into account plans to close inefficient capacities in coal mining (another 250 million tons need to be closed), the market has lost about 150 million tons of potential demand.
At the same time, Russian coal miners do not comment on this topic.
There is a version that if China nevertheless abandons coal, this will provoke the development of gas generation. At the moment, China consumes approximately 200 billion cubic meters of gas, demand will reach 340 billion by 2020, and 540 billion cubic meters by 2030. According to the most pessimistic forecasts, China plans to import 38 billion cubic meters of this amount from Russia via Gazprom’s Power of Siberia gas pipeline as early as December 2019. Gazprom wants to increase this volume in the future to 61 billion cubic meters.
Who sells coal for export from Russia
Firms from Russia earned $3.1 billion from coal exports in the first quarter of 2017, which is about half as much as during the same time in 2016. In January–March 2016, profits from coal exports from Russia were more than $2 billion.
If we talk about physical terms, coal exports from Russia in the first quarter amounted to about 1.7 million tons (only 5% more than exports in the first quarter of 2016).
In January-March 2017, 39 million tons of coal were sent from Russia to non-CIS countries (worth $2.9 billion), and 2.69 million tons (worth $249.5 million) to the CIS.
Contracts (for the export of coking coal) for January - March 2017 were signed at a price of $285 per ton (a record!). Morgan Stanley's forecast was that the price of coal for the second quarter of 2017 year will fall up to $180 per ton. The increase in fuel costs was provoked by Cyclone Debbie, rainfall and landslides in the state of Queensland (Australia) at the beginning of 2017: because of this, coal production in Australia (and it is the largest exporter) significantly decreased. Deliveries have been suspended along one of Queensland's key rail transport corridors, Goonyella.
At the end of 2016, the Mechel mining and metallurgical holding received a profit of more than 7 billion rubles. MMC's revenue in 2016 increased by 9% to 276 billion rubles. In 2015, the losses of the mining and metallurgical complex amounted to 115 billion rubles.
Since 2011, the company has brought only losses, because the key products of the MMC were steel and coal, and world prices for them were increasing.
MMC entered into an agreement on debt restructuring (according to the agreement, the start of repayment of the principal debt was postponed to 2020) with state-owned creditor banks: they account for 71% of the debt portfolio. Loan rates were revised and linked to the key rate of the Central Bank.
2018-09-27
The priority direction for the Russian coal industry is currently coal export - in 2017, the volume of export supplies exceeded the volume of domestic supplies for the first time in history. In the near future, further growth in Russian coal exports is predicted. And today it is important to understand the position of the domestic industry relative to the main competing countries, as well as the role and place of Russian coal in the global fuel and energy resources market.
World coal production
Today, there is an alarming trend towards a reduction in coal production worldwide. In 2013, the global coal industry reached its historical maximum - the volume of coal mined in the world in that year amounted to 8270.9 million tons. And from that moment on, coal production in the international arena began to gradually decline. In 2017, it already amounted to 7727.3 million tons (-543.6 million tons compared to 2013, or 93.4%). Moreover, this trend has been noted in almost all regions of the world, with the exception of South America and Africa, where during this period production remained at the same level and even increased slightly.
| Regions of the world | 2000 | 2005 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
|---|---|---|---|---|---|---|---|---|---|---|
| North America | 1 054,4 | 1 107,6 | 1 067,0 | 1 081,0 | 1 004,4 | 976,1 | 990,1 | 887,9 | 733,0 | 772,2 |
| South and Central America |
53,7 | 73,9 | 83,2 | 94,8 | 98,5 | 98,5 | 101,8 | 96,1 | 101,3 | 99,7 |
| Europe and Eurasia (including Middle East) |
1 197,1 | 1 231,8 | 1 222,6 | 1 287,3 | 1 306,9 | 1 258,8 | 1 207,7 | 1 181,7 | 1 164,7 | 1 225,1 |
| Africa | 230,5 | 250,0 | 258,9 | 257,3 | 267,2 | 267,7 | 276,7 | 266,0 | 262,8 | 270,6 |
| Asia (including Asia-Pacific, New Zealand and Australia) |
2 190,8 | 3 440,0 | 4 847,3 | 5 254,8 | 5 525,9 | 5 669,9 | 5 618,0 | 5 522,4 | 5 230,1 | 5 359,7 |
| World production coal, total: |
4 725,6 | 6 103,2 | 7 479,1 | 7 975,4 | 8 203,0 | 8 270,9 | 8 195,7 | 7 954,2 | 7 492,0 | 7 727,3 |
| Coal producing countries | 1995 | 2000 | 2005 | 2010 | 2015 | 2017 | Share in global coal mining,% (2017) |
|---|---|---|---|---|---|---|---|
| China | 1 360,7 | 1 384,2 | 2 365,1 | 3 428,4 | 3 746,5 | 3 523,2 | 45,6 |
| India | 289,0 | 334,8 | 429,0 | 572,3 | 674,2 | 716,0 | 9,3 |
| USA | 937,1 | 974,0 | 1 026,5 | 983,7 | 813,7 | 702,3 | 9,1 |
| Australia | 248,1 | 313,9 | 378,8 | 434,4 | 504,5 | 481,3 | 6,2 |
| Indonesia | 41,8 | 77,0 | 152,7 | 275,2 | 461,6 | 461,0 | 6,0 |
| Russia | 262,8 | 257,9 | 299,8 | 323,4 | 373,4 | 408,9 | 5,3 |
| South Africa | 206,2 | 224,2 | 245,0 | 254,5 | 252,1 | 252,3 | 3,3 |
| Germany | 246,7 | 201,6 | 203,1 | 182,3 | 184,3 | 175,1 | 2,3 |
| Poland | 200,7 | 162,8 | 159,5 | 133,2 | 135,8 | 127,1 | 1,6 |
| Kazakhstan | 83,3 | 74,9 | 86,6 | 110,9 | 107,3 | 111,1 | 1,4 |
| Total: | 3 876,4 | 4 005,3 | 5 346,1 | 6 698,3 | 7 253,4 | 6 958,3 | 90,0 |
World coal production - according to BP Statistical Review of World Energy, June 2018,
coal mining in Russia - according to the Federal State Budgetary Institution "Central Distribution Department of Fuel and Energy Complex"
Rice. 1. Coal production by the largest coal-producing countries in 2017, million tons (World coal production - according to BP Statistical Review of World Energy, June 2018, coal production in Russia - according to the Federal State Budgetary Institution "TsDU FEC") 
|
|
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
|---|---|---|---|---|---|---|---|
| Russian Federation, total: | 336 721,9 | 354 610,9 | 352 116,7 | 359 017,8 | 374 045,0 | 386 917,4 | 408 915,5 |
| underground method | 100 720,1 | 105 713,5 | 101 355,1 | 105 352,4 | 103 668,3 | 104 337,7 | 105 393,0 |
| By pools: | |||||||
| Pechorsky | 13 379,5 | 13 654,5 | 13 883,8 | 13 079,4 | 14 561,5 | 10 678,2 | 8 980,2 |
| Donetsk | 5 240,6 | 5 634,9 | 4 693,3 | 5 867,6 | 5 197,2 | 4 236,0 | 5 814,4 |
| Kuznetsky | 192 033,9 | 201 407,3 | 202 708,0 | 211 591,8 | 216 239,4 | 227 900,6 | 241 090,0 |
| Kansko-Achinsky | 39 639,3 | 41 545,5 | 37 303,6 | 36 177,2 | 38 245,5 | 37 389,1 | 38 347,8 |
| By federal district: | |||||||
| Central Federal District | 258,7 | 225,4 | 268,8 | 301,8 | 287,4 | 282,3 | 237,7 |
| Northwestern Federal District | 13 523,5 | 13 767,5 | 14 023,8 | 13 218,2 | 14 681,5 | 10 798,2 | 9 100,2 |
| Southern Federal District | 5 240,6 | 5 634,9 | 4 693,3 | 5 867,6 | 5 197,2 | 4 236,0 | 5 814,4 |
| Volga Federal District | 296,0 | 480,0 | 569,0 | 558,6 | 217,4 | 0,0 | 208,4 |
| Ural Federal District | 2 061,5 | 1 897,2 | 1 679,6 | 1 489,8 | 1 074,4 | 995,4 | 721,0 |
| Siberian Federal District | 283 733,2 | 297 464,4 | 297 656,6 | 303 559,2 | 312 397,8 | 328 285,5 | 348 747,1 |
| For coal companies: | |||||||
| JSC SUEK | 92 217,6 | 97 466,5 | 96 452,4 | 98 860,4 | 97 755,7 | 105 364,2 | 107 778,3 |
| JSC Holding Company "SDS-Ugol" | 19 321,4 | 21 518,8 | 21 995,2 | 25 516,4 | 25 447,1 | 24 579,7 | 24 660,4 |
| OJSC Management Company "Kuzbassrazrezugol" | 46 986,2 | 45 416,0 | 43 851,4 | 43 472,9 | 44 392,1 | 44 343,7 | 46 351,0 |
| LLC "RUK" (Novokuznetsk) | 9 268,1 | 10 789,5 | 12 541,8 | 11 546,0 | 10 231,2 | 11 182,5 | 10 967,4 |
| LLC "RUK" (Mezhdurechensk) | 6 251,2 | 7002,1 | 7823,7 | 10 202,1 | 10 351,9 | 10 511,8 | 11 435,2 |
| LLC "Company Vostsibugol" | 15 800,0 | 16 750,7 | 15 687,9 | 11 962,0 | 12 737,3 | 13 153,3 | 13 811,4 |
| PJSC Management Company "Southern Kuzbass" | 14 068,4 | 14 142,1 | 15 123,5 | 11 965,7 | 10 082,0 | 9 052,0 | 8 137,5 |
| PJSC "Kuzbasskaya TC" | 8 736,0 | 8711,0 | 10 146,0 | 10 608,0 | 11 002,0 | 11 682,0 | 13 226,0 |
| JSC "Mezhdurechye" | 5 664,7 | 6 339,4 | 6 125,2 | 6 551,5 | 6 761,4 | 6 367,4 | 6 243,8 |
| JSC Vorkutaugol | 7 156,2 | 9 562,7 | 12 116,8 | 11 359,8 | 13 160,1 | 9 454,9 | 8 684,7 |
| LLC "MMK-Ugol" | 4 035,7 | 3 951,3 | 3 287,4 | 3 657,5 | 3 582,7 | 3 416,2 | 3 614,4 |
| JSC Holding Company "Yakutugol" | 8 044,6 | 10028,9 | 10 033,8 | 9 472,9 | 9 147,3 | 9 905,4 | 8 346,2 |
| JSC Mine Zarechnaya | 4 603,9 | 4 682,2 | 4 172,9 | 5 607,9 | 5 043,1 | 2 875,9 | 1 795,2 |
According to the Federal State Budgetary Institution "CDU TEK"
|
|
1990 | 1995 | 2000 | 2005 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Northern America |
489,5 | 512,3 | 577,7 | 616,0 | 536,3 | 507,1 | 449,9 | 465,4 | 463,2 | 404,8 | 371,9 | 363,8 |
| South and Central America |
15,8 | 19,2 | 21,0 | 21,2 | 28,1 | 30,0 | 31,6 | 34,3 | 35,9 | 36,2 | 34,9 | 32,7 |
| Europe and Eurasia (including Near East) |
801,1 | 589,0 | 530,9 | 524,9 | 502,6 | 525,2 | 541,4 | 520,9 | 494,7 | 481,1 | 460,4 | 461,9 |
| Africa | 75,5 | 79,3 | 82,8 | 89,3 | 100,1 | 98,4 | 96,0 | 97,2 | 101,9 | 94,6 | 94,9 | 93,1 |
| Asia (including Asia-Pacific, New Zealand and Australia) |
840,4 | 1024,6 | 1 144,0 | 1 883,1 | 2 438,6 | 2 618,3 | 2 675,5 | 2 747,5 | 2 766,5 | 2 748,3 | 2 744,0 | 2 780,0 |
| Total coal consumption: | 2 222,3 | 2 224,2 | 2 356,3 | 3 105,7 | 3 605,6 | 3 778,9 | 3 794,5 | 3 865,3 | 3 862,2 | 3 765,0 | 3 706,0 | 3 731,5 |
According to BP Statistical Review of World Energy, June 2018
Rice. 2. World coal consumption, million tons of oil equivalent (According to BP Statistical Review of World Energy, June 2018) 
|
|
1990 | 1995 | 2000 | 2005 | 2010 | 2015 | 2017 | Share in global coal consumption, % |
|---|---|---|---|---|---|---|---|---|
| China | 527,5 | 665,2 | 706,1 | 1 324,6 | 1 748,9 | 1 914,0 | 1 892,6 | 50,2 |
| India | 109,7 | 140,3 | 164,4 | 211,2 | 290,4 | 395,3 | 424,0 | 11,3 |
| USA | 459,0 | 480,9 | 540,5 | 545,7 | 498,8 | 372,2 | 332,1 | 8,8 |
| Japan | 78,0 | 84,3 | 95,5 | 114,0 | 115,7 | 119,0 | 120,5 | 3,2 |
| Russia | 182,3 | 119,4 | 105,8 | 94,6 | 90,5 | 92,1 | 92,3 | 2,4 |
| South Korea | 24,4 | 28,1 | 43,0 | 54,8 | 75,9 | 85,5 | 86,3 | 2,3 |
| South Africa | 67,3 | 71,3 | 74,6 | 80,0 | 92,8 | 83,0 | 82,2 | 2,2 |
| Germany | 131,5 | 90,6 | 85,3 | 81,3 | 77,1 | 78,7 | 71,3 | 1,9 |
| Indonesia | 3,4 | 5,4 | 13,2 | 24,4 | 39,5 | 51,2 | 57,2 | 1,5 |
| Poland | 78,4 | 70,3 | 56,2 | 55,1 | 55,1 | 48,7 | 48,7 | 1,3 |
| Total: | 1 661,5 | 1 755,8 | 1 884,6 | 2 585,7 | 3 084,7 | 3 239,7 | 3 207,2 | 85,1 |
According to BP Statistical Review of World Energy, June 2018
Fig.3. World exports of hard coal, million tons of oil equivalent (According to the UN Statistics Department, excluding the United States, which did not provide data for 2017) 
| Coal exporting countries | 1995 | 2000 | 2005 | 2010 | 2016 | 2017 | Share in the world coal export, % |
|---|---|---|---|---|---|---|---|
| Australia | 136 411,1 | 186 754,6 | 234 319,6 | 301 911,0 | 390 898,5 | 372 204,7 | 41,1 |
| Indonesia | 31 952,6 | 57 983,9 | 129 044,1 | 291 171,3 | 310 662,3 | 218 112,5 | 24,1 |
| Russia | 30 087,3 | 43 699,5 | 79 655,8 | 115 569,6 | 166 129,2 | 181 406,2 | 18,0 |
| Colombia | 18 273,9 | 33 567,5 | 53 662,1 | 70 530,9 | 83 353,6 | 102 713,3 | 10,2 |
| South Africa | n/a | 70 495,6 | 75 380,6 | 71 252,1 | 76 932,5 | 83 502,6 | 9,2 |
| USA | n/a | 62 339,4 | 52 352,5 | 86 933,9 | 64 090,9 | n/a | – |
| Canada | 34 179,2 | 32 422,0 | 28 163,6 | 33 278,7 | 30 245,7 | 30 441,3 | 3,4 |
| Kazakhstan | 20 767,5 | n/a | 24 138,0 | 18 246,7 | 23 854,3 | 27 136,1 | 3,0 |
| Poland | 31 868,2 | 23 236,5 | 19 370,9 | 10 551,2 | 9 080,0 | 7 072,6 | 0,8 |
| Philippines | n/a | n/a | n/a | 4 194,9 | 7 946,2 | 6 924,9 | 0,7 |
| Total: | 303 539,8 | 502 202,0 | 698 738,9 | 989 520,0 | 1 177 110,5 | 992 178,3 | 98,2 |
According to the UN Statistics Department, excluding the United States, which did not provide data for 2017
Rice. 4. Structure of world coal exports in 2016, % 
Rice. 5. Structure of Russian coal exports by destination in 2017 (According to JSC Russian Railways) 
| Period | Export of Russian coal, million tons | Sales cost, $ million | ||||
|---|---|---|---|---|---|---|
| Stone coals | Brown coals | Export, total | Stone coals | Brown coals | Export, total | |
| 2001 | 41,5 | 0,2 | 41,7 | 1 203,6 | 3,5 | 1 207,1 |
| 2002 | 43,2 | 0,1 | 43,3 | 1 150,9 | 1,4 | 1 152,3 |
| 2003 | 60,5 | 0,1 | 60,6 | 1 721,7 | 1,9 | 1 723,6 |
| 2004 | 71,8 | 0,3 | 72,1 | 2 755,9 | 7,8 | 2 763,7 |
| 2005 | 79,7 | 0,6 | 80,2 | 3 755,7 | 13,8 | 3 769,5 |
| 2006 | 91,4 | 0,5 | 91,9 | 4 342,3 | 15,3 | 4 357,6 |
| 2007 | 98,0 | 0,6 | 98,6 | 5 354,7 | 18,1 | 5 372,8 |
| 2008 | 97,4 | 0,6 | 98,1 | 7 751,7 | 25,3 | 7 777,0 |
| 2009 | 105,1 | 0,9 | 106,0 | 7 367,4 | 30,2 | 7 397,6 |
| 2010 | 115,6 | 0,5 | 116,1 | 9 172,7 | 21,6 | 9 194,4 |
| 2011 | 110,5 | 0,8 | 111,3 | 11 372,3 | 46,5 | 11 418,8 |
| 2012 | 130,4 | 1,4 | 131,8 | 13 014,7 | 77,7 | 13 092,4 |
| 2013 | 139,0 | 1,8 | 140,8 | 11 821,2 | 88,2 | 11 909,4 |
| 2014 | 153,2 | 2,4 | 155,6 | 11 642,3 | 116,5 | 11 758,8 |
| 2015 | 152,7 | 3,4 | 156,0 | 9 480,3 | 130,3 | 9 610,6 |
| 2016 | 166,1 | 5,3 | 171,4 | 8 907,2 | 167,2 | 9 074,4 |
| 2017 | 181,4 | 8,7 | 190,1 | 13 530,0 | 393,2 | 13 923,2 |
According to the UN Statistics Department
Rice. 6. Structure of Russian coal exports by type of coal in 2017, % (According to the UN Statistics Department) 
Rice. 7. Structure of coal supplies to India largest exporters in 2017, million tons (According to the UN Statistics Department) 
Rice. 8. Structure of coal supplies to Japan by the largest exporters in 2017, million tons (According to the UN Statistics Department) 
Rice. 9. Structure of coal supplies to China by the largest exporters in 2017, million tons (According to the UN Statistics Department) 
Rice. 10. Structure of coal supplies to Korea by the largest exporters in 2017, million tons (According to the UN Statistics Department) 
| Importing countries | 1995 | 2000 | 2005 | 2010 | 2016 | 2017 |
|---|---|---|---|---|---|---|
| India | 12 512,1 | 21 326,4 | 39 103,3 | 71 868,5 | 193 108,3 | 153 581,8 |
| Japan | 126 179,4 | 145 282,9 | 180 810,8 | 184 583,5 | 189 813,2 | 190 824,6 |
| China | 1 608,5 | 2 116,8 | 26 171,1 | 164 568,5 | 183 325,3 | n/a |
| Korea | 43 836,3 | 63 845,1 | 76 767,8 | 118 625,7 | 134 520,1 | 148 261,6 |
| Germany | 15 137,7 | 22 950,4 | 34 835,5 | 38 838,7 | 53 254,6 | 49 072,4 |
| Türkiye | 4 340,2 | 13 110,2 | 17 024,0 | 6 904,9 | 36 215,8 | 38 251,1 |
| Brazil | 12 542,0 | 14 874,1 | 15 750,4 | 17 691,5 | 22 037,6 | 23 564,7 |
| Spain | 13 956,0 | 21 648,6 | 24 656,2 | 11 829,6 | 13 828,3 | 19 178,2 |
| France | 13 268,0 | 17 239,3 | 19 544,4 | 18 976,7 | 12 881,6 | n/a |
| Great Britain | 15 942,1 | 23 792,3 | 44 443,1 | 24 295,4 | 7 634,1 | 7 498,4 |
| Total: | 259 322,3 | 346 186,1 | 479 106,6 | 658 183,0 | 846 618,9 | 630 232,8* |
According to the UN Statistics Department
* Excluding China and France, which did not report data for 2017
Rice. 11. Structure of world coal imports in 2017, % (According to the UN Statistics Department) 
IN industrial scale in the world are carried out by more than 60 countries, at the same time the share of 10 listed in the table. 1 countries account for 90.0% of global coal production. Apart from these countries, no state in the world today produces more than 100 million tons of coal per year, and Russia occupies a confident 6th place in this prestigious club.
Over the past 20 years, the development of the coal industry of world leaders has changed in different directions. Most countries have seen a significant increase in coal production. The highest growth rate of coal production over the period under review was recorded in Indonesia (more than 10 times). China (2.5 times), Australia and India (more than 2 times), Russia (1.5 times), South Africa and Kazakhstan (1.2 times) also increased their coal production volumes.
A number of world leaders have reduced coal production volumes: the USA and Germany - by almost 30%, Poland - by 65%. The reasons for this situation are various. In the USA, in connection with the start of industrial production of shale gas, most electric power enterprises abandoned the use of coal and switched to gas fuel, as a result of which the demand for coal here has fallen sharply. European coal miners, Germany and Poland, are forced to reduce production volumes under pressure from the European Union, which advocates reducing harmful emissions from coal combustion in order to protect the environment, which negatively affects the economy of individual EU member countries (in Poland, for example, more than 90% Until recently, electricity was produced at coal-fired thermal power plants). In addition, the influence of the environmental organization Greenpeace, which also advocates environmental protection, is quite strong here.
Coal mining in Russia
Despite global trends, coal production in Russia has been steadily increasing over recent years. To a certain extent, this is facilitated by the demand for Russian coal products on the world market.
In 2017, coal production for the first time in the history of modern Russia exceeded 400 million tons of coal per year. The generally recognized leader in the industry is SUEK, whose enterprises mine coal all the way from Kuzbass to Far East. Coal production in the company exceeded 100 million tons for the second year in a row. The largest coal companies in Russia also include Kuzbassrazrezugol, SDS-Ugol, Raspadskaya Coal Company (RUK), and Vostsibugol.
Prospects for further growth in coal production in Russia are associated, first of all, with the investment attractiveness of enterprises in the industry. The total volume of investments in fixed capital of enterprises in 2017 exceeded 100 billion rubles. The annual increase in production capacity is about 10 million tons of coal per year. In addition, favorable conditions on the global coal market ensure that the increase in coal production is sold for export.
Coal consumption
World coal consumption grew year by year and reached its historical maximum of 3,889.4 million toe in 2014. However, subsequently, coal consumption in the world began to decline at a rate of 50–100 million toe. in year. The emerging negative trend continues to this day. It should be noted, however, that the reduction in coal consumption is not happening everywhere, whole line states continue to increase coal consumption.
Among the largest coal consuming countries, Russia ranks fifth in the world. The undisputed leader here is China, providing more than half of global consumption. In total, the top ten largest coal consumers account for more than 85% of global consumption.
Coal consumption by the largest consumers varies differently. An increase in consumption is observed in India, Japan, the Republic of Korea, and Indonesia. Coal consumption is being reduced in Germany, Poland and other EU countries.
The phasing out of coal by many US power systems has had unpredictable consequences. Abnormally low temperatures winter period 2017–2018 led to increased fuel consumption at thermal power plants, which, in turn, led to its shortage. In these conditions, the only effective solution was the urgent purchase of liquefied gas Russian production in order to prevent a decrease in the performance of power systems in extreme climatic conditions. This incident confirmed that it is too early to write off coal fuel as a reserve.
In Russia, coal production and consumption are also developing in different directions. While production volume has been constantly growing in recent years, consumption in the country has been declining in accordance with global trends.
World coal exports
In 2017, more than 80 countries exported coal products; the total volume of exports for all types of coal amounted to 1072.2 million tons of coal. General market price global exports in 2017 exceeded $105 billion.
Today, the share of global coal supplies in the volume of its production is relatively small and amounts to only about 15%. This indicates that the majority of mined coal (more than 80%) is used by coal-mining countries for their own needs. However, some countries export more than half of the coal produced: Colombia - 92.1%, Australia - 79.3%, Indonesia - 71.6%, Canada - 50.2%. It should be noted that not all of these countries are among the world's largest coal producers.
From Fig. Figure 3 shows that the development scenario for coal exports generally repeats the change in the volumes of coal production and consumption in the world - an increase in volumes until 2013 with a subsequent slight decrease, however, this does not apply to all participants in the global coal market. The top five largest coal exporters, despite everything, are increasing the volume of coal exports. This means that the demand for coal products in general on the world market is not decreasing.
From Fig. 3 it also follows that the volume of world coal exports (hard coal) over the past 20 years has increased almost 3 times, while coal production in the world over the specified period has increased only 1.7 times. Thus, the growth rate of coal exports significantly exceeds the growth rate of coal production.
It should be noted that the market value of world coal exports has changed disproportionately to its volume - while the volume of world coal exports has increased 3.3 times over the past 20 years, its value has increased 4.5 times. This is explained by the global rise in energy prices. However, as global coal exports have begun to decline in recent years, so has their market value.
The share of those presented in Table. At the end of 2017, 6 ten countries accounted for more than 98.0% of the total world coal exports.
In Fig. 4 you can see data on the structure of world exports of hard coals in the context of the largest coal exporting countries. The information is based on the results of 2016 due to the lack of statistical reporting on coal exports by some of the largest exporters for 2017, which leads to distortion big picture coal exports.
The recognized leaders of world coal exports - Australia, Indonesia, Russia, Colombia - over the period under review constantly and steadily increased the volume of coal exports.
Russian coal exports
As a coal exporter, the Russian Federation does not have the advantages that its main competitors have - first of all, the distance from coal-mining regions to the nearest coal terminals in seaports. If in Australia and Indonesia this distance is measured in tens of kilometers, then in Russia, where the main flow of exported coal comes from Kuzbass, this distance is more than 4000 km to the ports of the Pacific coast and almost the same to the western borders of Russia. This situation leads to a significant increase in the transport component in the price of Russian coal products. In addition, the constant increase in tariffs for rail transportation of exported coal significantly reduces its competitiveness in the world market, since not a single global coal exporter carries out rail transportation of coal over such vast distances as Russia.
Russian coal today is supplied to more than 60 countries around the world. Coal exports are a fairly significant source of the country’s income, providing about $10 billion in foreign exchange earnings annually. Despite the intensified competition between countries exporting coal products, Russian coal exports continue to grow; at the end of 2017, they amounted to 190.1 million tons.
From Fig. 4 it follows that in the cases considered, Australia and Indonesia have a dominant position in coal export supplies, occupying first and second place in the list of largest coal exporters, respectively. But Russia, which occupies third position on this list, has low (up to 20%) market shares. This indicates that the Russian Federation has development prospects in this direction, although increasing its market share in the Asian segment seems to be both a long and difficult task.
Coal import
In 2017, imports of coal and coal products (HS code 2701) were carried out by more than 110 countries of the world, the total volume of imports amounted to 1169.8 million tons of coal.
As for global coal imports themselves, the largest coal-producing countries - China and India - also top the rating list of the largest coal importers. This is due to the fact that their own coal production is unable to satisfy the needs of the growing economies of these countries. As a result, they are forced to import very significant additional volumes of coal.
At the top of the list of importers are other countries located in the Asia-Pacific region (Japan, Republic of Korea). Thus, the main center of consumption of coal products is in the Asia-Pacific countries. At the same time, the main coal exporters (Australia, Indonesia and partly Russia) are also located in the Asia-Pacific region. This creates opportunities for significantly reducing the distance of coal transportation by sea and, accordingly, reducing transport costs.
Like many other coal-mining countries, it also imports it for its own needs. At the same time, “net” imports here are small; at the end of 2017, they amounted to only about 380 thousand tons. The trick here is that those 22 million tons of coal that were brought into Russia from Kazakhstan are not actually imports, since both Russia and Kazakhstan are members of the Eurasian Economic Union (EAEU) and therefore are on the same customs territory. In this case, the concept of “import” loses its meaning and is replaced by the term “import”. However, UN statistics show that in 2017, the volume of coal imports in Russian Federation amounted to 22.6 million tons. Obviously, in this case the total indicator of delivery and import is indicated.
Future prospects
Taking into account the above, we can conclude that the coal industry in most countries is experiencing better times. Since 2014, almost all over the world there has been a reduction in coal consumption (in the EU countries this reduction began in 2013). The exception is the Asia-Pacific countries, where consumption continues to grow, contrary to global trends. The group of 10 largest coal consumers is also experiencing an increase in coal consumption.
A decrease in consumption leads to a decrease in production volumes. In the United States, coal production volumes have decreased by more than 150 million tons over the past 5 years. Coal production is also declining in other major coal-producing countries: South Africa, Germany and Poland, and volumes are decreasing accordingly. international trade coal.
The main challenges destabilizing the development of the global coal industry include instability in demand and prices for coal products on the world market, tightening environmental requirements for the use of coal, as well as the desire of some countries to reduce dependence on coal imports through the development of renewable energy sources.
According to data presented in analytical reviews of the International Energy Agency, the growth of global coal demand by 2020 will be at best 0.8% per year. As today, it will primarily be determined by the Asia-Pacific countries and India.
Russia's role in global coal exports will also increase. Contrary to global trends, coal production in the Russian Federation is constantly growing. In order to expand sales of mined coal, the country is striving to increase its share in the markets of Asia-Pacific countries, where coal consumption is increasing by 140 million tons per year. Russia's share in this market is only 8.6%, so the immediate goal is to increase this figure to 15%. And in the case of a favorable price environment, the share of Asia-Pacific countries in the total supplies of Russian coal could reach 53%. However, there are also a number of limiting factors - insufficient throughput railways in the Pacific direction, as well as insufficient capacity of the coal terminals of the sea ports of the Far East for coal transshipment.
Despite the general reduction in coal production and consumption in European countries, Russian coal exports are also increasing in this direction.
In order to increase the efficiency of Russian coal exports, according to the author, Russian coal producers need to focus their efforts in those countries where there are better prospects for further growth in coal consumption and where Russia has the most significant market share. From the analysis of importing countries, it is clear that this group includes Japan, China and the Republic of Korea - all countries are located in the Asia-Pacific region. Taking into account data on the dynamics of coal consumption in these countries, it is possible with reasonable probability to predict the volumes of coal imports by these countries in the future until 2030. The need for coal imports in these countries may increase by 120–150 million tons per year, which creates a very significant market niche. In these conditions, Russian coal producers should focus their supplies precisely on this rather promising market segment.
Calculations show that with favorable developments of the situation (absence of political aggravations with importing countries, unpredictable changes in the economic situation, fluctuations in exchange rates, etc.), the volume of Russian coal exports in accordance with the optimistic scenario (taking into account the needs of main consumers) may increase by 2030 to the level of 240–250 million tons.
At the same time, today one should be wary of overly optimistic forecasts, since currently the growth rate of Russian coal exports has begun to decline somewhat. If at the end of 2017 the growth in the volume of coal exports compared to the level of the previous year was 114.8%, then in the first half of 2018 this figure increased (according to operational data) by only 1.4% (according to the CDU FEC). In this regard, there is a moderate scenario for the development of coal exports, according to which its volume by 2030 will not exceed 215–220 million tons of coal.
Thus, in general, the prospects for the development of the domestic coal industry in the foreseeable future appear to be very favorable. This assessment is facilitated by:
- the presence of sufficient coal reserves in the ground;
- very high investment attractiveness of coal industry enterprises, as evidenced by the dynamics of growth of investments in their fixed capital in recent years;
- a steady trend of growth in production capacity at enterprises in the coal industry;
- the presence of very promising international coal markets, and primarily in the Asia-Pacific region.
Coal today is as popular as industrial salt for boiler houses, and its scope of application is very wide. It is not only fuel. IN chemical industry this is the most important raw material from which different materials: from polymers to fertilizers. Coal is also the basis for the production of other minerals: molybdenum, zinc, etc.
Today, coal exports in the world have changed dramatically. The reason for this is an increase in demand in many developing countries and a change in the situation in the raw energy industry. In particular, for countries such as China and India, coal is a reliable and affordable source of electricity. It is he who provides them with significant economic growth.
External exports of coal from countries that produce it are carried out in an amount of no more than three percent. This indicator can only be afforded by those states that have large deposits of this fuel. They use the rest for their own needs and internal sales. Coke, hard and brown coal, and anthracite are exported, which in our country are as easy to buy as sand and salt in bags.
The main exporters of hard coal in the world are Indonesia, England, France, Germany, Poland, Russia, Australia, USA, Canada, South Africa. The contribution of other countries to global coal exports is insignificant; they are mainly consumers. South Africa, Australia and Colombia supply up to 700 million tons every year, the USA and North Korea - up to 400 million and together provide up to sixty percent of the annual world production of this solid fuel. Experts say that the development of coal deposits in India and the CIS countries is promising and profitable. Research has shown that these countries are provided with fuel for several hundred years to come.
Kuzbass coal export is known in all countries. The city of Kemerovo provides constant supplies due to the operation of more than fifty mines and thirty-six open-pit coal ore mines. Today it supplies more than half of all coal consumed in Russia.
In general, coal reserves throughout the world will remain quite satisfactory for a long time. Today, coal remains one of the most used resources in the world. Every year its production only increases. In addition, new coal reserves are being actively developed. Therefore, coal exports will not decrease in the near future. The list of major coal exporting countries has already been established and is unlikely to change for several decades.
Demand for hard coal is growing steadily. By 2020, experts predict a significant increase in demand for this type of fuel. This is due to the fact that its price is significantly lower than the cost natural gas and oil. In addition, the reserves of the latter are rapidly depleting. Therefore, coal is a good alternative. Its reserves are evenly distributed throughout the planet, and many countries are actively mining it and exploring new deposits.