Downhole achievements – Newspaper Kommersant No. 44 (7489) dated 03/16/2023

Tax revenues from the coal industry of the Russian Federation doubled in 2022, to 360 billion rubles, follows from the estimates of the Ministry of Energy. This was the result of an increase in the tax burden on the industry in 2022 and high world prices. At the same time, the potential for load growth looks exhausted, and the Ministry of Finance is not going to require coal companies to pay a one-time fee to the budget in 2023.

Tax revenues from coal companies in Russia in 2022 amounted to 360 billion rubles, which is twice as much as in 2021 (175 billion rubles), and six times more than in 2020 (63 billion rubles), said in the presentation of the Minister of Energy of the Russian Federation Nikolai Shulginov “On the implementation of priority projects in the energy sector” (available from Kommersant). On March 15, Mr. Shulginov spoke at the “government hour” in the State Duma, during which, among other things, he summed up the results of 2022. It is not clear whether the presentation refers to payments only to the federal or consolidated budget (including income tax in the regions). The ministry did not respond to Kommersant’s request.

The coal industry has experienced several rounds of increased fiscal pressure over the past three years. Since the beginning of 2022, the MET on coking coal has been pegged to world prices: the MET rate has been set at 1.5% of the average coal price in accordance with the SGX TSI FOB Australia Premium Coking Coal index, while previously a fixed rate of 57 rubles was applied . per ton. According to the forecasts of the Ministry of Finance, budget revenues from this measure should have amounted to 27.7 billion rubles. In parallel, in 2022, the idea was discussed to introduce export duties on coal, including energy, if the price exceeds $150 per ton at the port of shipment, but so far it has been abandoned. Nevertheless, it was decided temporarily – from January 1 to March 31, 2023 – to increase the MET for anthracite, coking and thermal coal to 380 rubles. per ton, which will additionally attract 30 billion rubles to the budget.

In 2022, global coal prices rose sharply, which apparently led to an increase in tax revenues to the Russian budget from coking coal, the extraction taxes of which are pegged to Australian coal quotations. At the same time, Russian thermal coal began to trade at a huge discount against global benchmarks, which in the second half of 2022 sometimes exceeded 50%. In addition, the logistics costs of coal companies increased due to the increase in tariffs of Russian Railways and the growth of freight rates for bulk carriers.

At the same time, a strong ruble in 2022 limited the income of coal companies. As a result, now the Ministry of Finance, apparently, does not consider the coal industry as a source of additional income. On March 15, Deputy Finance Minister Alexei Sazanov said that coal companies, like oil and gas companies, would not pay a one-time fee to the budget, which would apply to other companies with pre-tax profits of more than 1 billion rubles. in 2022.

In conditions when the EU has refused to import Russian coal since August, its supplies to Asia have increased. Deputy Minister of Energy of the Russian Federation Sergey Mochalnikov told reporters on March 15 that Russian coal exports to the Asia-Pacific countries, having amounted to 140 million tons in 2022, may increase slightly this year. According to the presentation, exports to India increased manifold in 2022, from 6.6 million tons in 2021 to 20.1 million tons in 2022. Deliveries to China increased by 25% to 67.3 million tons.

The Ministry of Energy expects coal production in 2023 to remain at the level of last year, 443.6 million tons. “For coal, we predict the preservation of the current level, which in 2022 restored the high pre-pandemic rate of 2019,” Nikolai Shulginov said on March 15.

Fitch expects global coking coal prices to remain at high historical levels, albeit lower than in 2022. In 2023, the agency’s forecast for the price of coking coal is $220 per ton. “The revised price assumptions for metallurgical coal are supported by a combination of improved demand prospects after China lifted its ban on imports from Australia, as well as higher production costs in the sector,” the agency’s analysts said in a forecast.

Evgeny Zainullin, Dmitry Kozlov