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Russian thermal coal production to grow to 550 million mt/year by 2035: Putin

Russian thermal coal production is set to grow over 100 million mt by 2035, as the country looks to invest in new coal infrastructure and focus increasingly on the growing Asia-Pacific region, President Vladimir Putin said in a meeting with heads of coal mining regions last week.

“Last year, our domestic consumption grew to 180 million mt, and we exported 210 million mt for export. The growing dependence on foreign markets creates certain threats and certain risks, bearing in mind the volatility of these foreign markets,” Putin said.

Putin said Russia’s main competitors in the seaborne market were Australia and Indonesia, which both benefitted from better logistical conditions as the coal mines are generally located closer to the export terminal than in Russia.

Alexander Valentinovich, minister of energy, said that Russia’s current coal production exceeded 440 million mt, and was nearly 10% higher than the initial plan for Russian coal through to 2030.

“About 300 million mt of new coal mining capabilities were commissioned over the past ten years,” the minister said.

Russia’s coal development program through to 2035 had been revised upward, from current 440 million mt/year to 550 million mt/year, and as high as 670 million mt/year, the minister said.

Despite this ambitious forecast, the minister said the predictions made by individual coal companies in the country was 100 million mt higher even than the ministry predictions.

RUSSIAN COMPANIES TURN FOCUS TO EAST

The minister also highlighted how Russia had increased its coal mining and export infrastructure, particularly in the Far East, the Black Sea and the Arctic Basin.

This would be integral to Russia’s coal development as currently 60% of all coal production and 75% of export coal is produced in the Kuzbass region in the centre of the country, the minister said.

This focus on new coal production has led Russia to account for 15% of world coal trade, behind only Australia and Indonesia, the minister said.

“Our coal companies today are actively exploring the markets of the Asia-Pacific region, which is by far the most promising. And we see the growth potential of coal consumption in this direction,” the minister said.

While the outlook for thermal coal in Western markets has been overly negative for some time now, the minster noted that in absolute terms, thermal coal demand would either stay at current levels or increase.

“It is always difficult to guess how energy markets will develop. Nevertheless, most experts agree that, despite the decrease in the share of coal in the overall energy balance, taking into account the fact that energy consumption will increase in the world, the total volume of coal consumption will be at least not less than today’s level, and will even grow in absolute terms,” he said.
Source: Platts

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