A duty is carved from anthracite – Newspaper Kommersant No. 204 (7405) dated 02.11.2022

The Ministry of Energy proposes to raise the cut-off price in the export duty on anthracite, which should come into effect next year. Now the duty on anthracite is expected to be levied by analogy with thermal coal – if the FOB price exceeds $150 per ton. The Ministry of Energy is in favor of equalizing anthracite with coking coal, which has a cut-off price of $170 per ton. Such a decision could save anthracite exporters $8 per tonne in duties.

The Energy Ministry proposes to increase the cut-off price for anthracite export duty from $150 per ton to $170. Such ideas are contained in the October presentation of the REA analytical center of the Ministry of Energy. The presentation was published by the Telegram channel “SovietBezRynka”. The Ministry of Energy, as well as coal companies, did not provide comments. The Ministry of Finance redirected Kommersant to the Ministry of Energy.

The export duty on coal will come into effect next year and will be charged if the FOB price exceeds $150 per ton for thermal coal and $170 per ton for coking coal. Anthracite is equated to thermal coal. The duty rate is the same – 40%.

The presentation of the REA Analytical Center indicated that anthracite, in terms of its quality, market, logistical and tax characteristics, is closer to coking coal than to energy coal. In particular, the highest mineral extraction tax among all coals is taken from anthracite – 318 rubles. per ton against 92 rubles. per ton of thermal coal. Since the beginning of the year, the level of the railway tariff for the transportation of anthracite has been equated to the tariff for coking coal. Finally, on the world market, anthracite is traded in the category of metallurgical coal and is an alternative to coking coal.

The Ministry of Finance has included in the budget for the next three years the introduction of an export duty on fertilizers and coal in case high prices for them persist. In 2023, according to the draft budget, it is planned to receive 135.6 billion rubles from duties, although, according to officials, the chances of this are small. “Next year, most likely, we are unlikely to use this tool, but if prices are favorable, super-favorable, the export duty will work,” said Finance Minister Anton Siluanov on October 17 at a meeting of the State Duma Committee on Budget and Taxes.

Meanwhile, according to forecasts of the REA analytical center, in the first quarter, when coal is exported to the east, FOB prices may exceed the bar at which a duty is introduced. Thus, in the first quarter of 2023, the price of coking coal on an FOB basis for deliveries from the Kemerovo region to China and India through the port of Nakhodka will be $194 and $190, respectively. For deliveries to China and India from the Novosibirsk region, where the assets of the largest anthracite producer Sibanthracite are located, the price in the port of Nakhodka will be $164 and $160, respectively. The duty may also arise when delivering anthracite to India via the port of Taman, where the FOB price can reach $178, via Murmansk ($157) and Ust-Luga ($163).

The duty will mainly affect Sibanthracite, which in 2021 produced 22.6 million tons of metallurgical coal and anthracite, exporting almost the entire volume of production. So, if the FOB price is $40 above the cut-off price, the company is likely to have to pay about $350 million in export duties while maintaining exports at 2021 levels.

Today, anthracite of Russian origin in the world markets costs $135 per ton, says Sergey Grishunin from the NRA. This coal rarely goes to the energy sector and is more often used by industry. According to the analyst, the prospects for industry in Europe and Asian countries next year look weak and one should not expect anthracite prices on world markets to rise above $200-250 per ton. At the same time, Russian coal is still sold at a discount of 40-60% to world prices. “Therefore, the risk that coal miners will pay duties next year is low,” Sergei Grishunin added.

Evgeny Zainullin