Coal mining industry - Newspaper Kommersant No. 170 (7371) dated 09/15/2022

Coal mining industry - Newspaper Kommersant No. 170 (7371) dated 09/15/2022



As Kommersant found out, the authorities, in search of sources to close the budget deficit, are considering imposing an export duty on coal, by analogy with fertilizers. According to Kommersant's sources, the mechanism under discussion involves the cut-off price and the percentage of withdrawal if it is exceeded. According to analysts, as a result, the budget will be able to receive about 100 billion rubles. in year. The duty, if introduced, will put pressure on the business of coal companies, which are already suffering from the EU embargo, huge discounts, expensive logistics and a strong ruble.

The Russian government plans to impose an export duty not only on fertilizers, but also on coal, Kommersant's sources say. According to Kommersant's interlocutors, this issue is being discussed at meetings with First Deputy Prime Minister Andrei Belousov. The office of Mr. Belousov did not respond to Kommersant's request. The coal companies did not comment.

One of Kommersant's sources says that all types of coal, including coking coal, will fall under the export duty. It is tentatively assumed that the mechanism will imply a cut-off price above which the duty becomes effective. Another Kommersant source estimates the size of the duty under current conditions at $9-10 per ton.

Now the government is actively discussing the parameters of the budget for the next year, which should be presented to the President of the Russian Federation next week. Given the growth in spending and the expected budget deficit, the Ministry of Finance is actively looking for new sources of income. In particular, as Kommersant wrote on September 14, it is planned to take 105 billion rubles from the chemical industry. in year.

The idea of ​​export duties on coal is also purely fiscal in nature, since the sector does not have excess profits in the current conditions. So, even in 2021, despite the desire to increase the tax burden on the non-oil sector, the government decided not to increase the tax burden on thermal coal. Now coal companies have lost the European market due to the embargo imposed in August, forcing them to engage in costly redirection of export flows to Asian markets.

Russian Energy Minister Nikolai Shulginov said on September 5 in an interview with TASS that due to the EU embargo, coal production in Russia will fall by 6% by the end of 2022. In 2021, 438.1 million tons were mined. Export deliveries then amounted to 214.4 million tons. According to the Kuzbass Ministry of Coal Industry, in January-July 2022, production in the region decreased by 9%, to 126 million tons of coal.

Shipments by rail decreased by 11% to 115 million tons. In the western direction, deliveries fell by 13.7%, to 58.5 million tons, and in the eastern direction, by 9%, to 28.5 million tons. As of August 1, according to the ministry, the remains of coal in intermediate and railroad warehouses, in the bunkers of processing plants increased by 17%. Now 18.7 million tons of coal are stored there.

Despite the fact that world prices for coal are at high levels, Russian companies sell it for export at a significant discount. According to the slides shown at the WEF by UMMC Director for Port and Railway Projects Irina Olkhovskaya, the gap between prices on the European market (CIF ARA) and the price of selling Russian coal in the ports of the Far East reached 70%. Compared to last year, the discount has grown seven times.

The logistics of exporting Russian coal has deteriorated sharply. “If earlier there was a Murmansk-Rotterdam route, it is 3,000 km, but today to Iskenderun it is more than 15,000 km. And the cost of freight per ton has grown ninefold,” Denis Rakhimzhanov, SUEK Logistics Director, reported on September 13 at the PRO//Movement.Siberia conference. “We have reformatted the logistics chains, and the countries we currently ship to through Western ports are Morocco, India, Turkey and other countries that we previously considered as non-strategically important partners. This led to the fact that the cost of coal has changed dramatically, the range of transportation has lengthened, ”he said (quote from Interfax). Denis Rakhimzhanov also stressed that the strengthening of the ruble had a negative impact on the export economy.

In 2022, Russian coal exports can be estimated at 190-200 million tons based on Argus data, says Boris Krasnozhenov from Alfa Bank. “With the current exchange rate of the ruble against the US dollar and an export duty of $9–10, budget revenues could amount to 100–120 billion rubles,” the analyst believes.

Evgeny Zainullin, Natalya Skorlygina



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