Russia and coal
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Russia ranks among the world's largest producers and consumers of coal. In 2019, it produced 437.2 million tonnes, ranked fourth in the world.[1]
Coal Resources
According to the Ministry of Natural Resources, Russia's coal reserves are located within 22 coal basins and 146 separate deposits. More than half of the total reserves are brown coal - 146 billion tons. Bituminous coal accounts for 120.4 billion tons, of which 50.1 billion tons are suitable for coking. Anthracite reserves are recorded at 9 billion tons. About 174.6 billion tons (63%) of coal reserves are suitable for open-pit mining.[2]
According to the US Energy Information Administration (EIA) Russia has the world's second largest recoverable coal reserves, with 173 billion short tons (behind only the United States, which holds roughly 259 billion short tons).[3] The US Geological Survey estimate that half the country's coal reserves are lignite.[4]
The proved amount of coal in place reported for end-1996 comprised 75.8 billion tonnes of bituminous coal, based on a maximum deposit depth of 1 200 m and a minimum seam thickness of 0.6-0.7 m; 113.3 billion tonnes of sub-bituminous grades (at depths of up to 600 m and minimum thickness 1.0-2.0 m); and 11.5 billion tonnes of lignite (at 300 m and 1.5-2.0 m, respectively).[5]
Proved recoverable reserves were reported as just over 49 billion tonnes of bituminous coal, of which 23% was considered to be surface-mineable and 55% was suitable for coking. Of the 97.5 billion tonnes of proved recoverable reserves of sub-bituminous coal, 74% was suitable for surface mining, while all of the 10.5 billion tonnes of recoverable lignite reserves fell into this category. Overall, about 94 billion tonnes of Russia’s proved reserves were deemed to be recoverable by opencast or strip mining.[5]
Russian coal reserves are widely dispersed and occur in a number of major basins. These range from the Moscow Basin in the far west to the eastern end of the Donetsk Basin (most of which is within Ukraine) in the south, the Pechora Basin in the far northeast of European Russia, and the Irkutsk, Kuznetsk, Kansk-Achinsk, Lena, South Yakutia and Tunguska basins extending across Siberia to the Far East.
Resource Details
| Category | Reserve Classification | Quantity | Units | Data Year |
|---|---|---|---|---|
| BGR Estimate | Reserves | 162,166[1] | million tonnes | 2019 |
| BGR Estimate | Resources | 1,658,742[1] | million tonnes | 2019 |
| Geological Survey | Reserves | 275,400[2] | million tonnes | 2020 |
| Geological Survey | Resources | million tonnes | ||
| Commercial Reserves | Reserves | million tonnes | ||
| Commercial Resources | Resources | million tonnes |
Coal Production
The World Coal Association estimates that in 2013 Russia produced a total of 347 million tonnes of coal, of which 201 million tonnes was thermal coal. Of this 73 million tonnes was classed as brown coal or lignite, making Russia the world's second largest producer of low-grade coal. In 2013 the World Coal Association estimates Russia produced 73 million tonnes of metallurgical coal.[6]
Most of Russia's coal is produced using through open cast mining, and 76 percent of the coal produced is hard coal.[7]
The EIA also notes that over half Russia's coal production in mined in the Kuzbass basin, in central Russia. To access European markets, Kuzbass coal is transported by rail for almost 4200 kilometres (2,600 miles) to reach the port of Port of Ust-Luga. To access the Asian market Kuzbass coal has to travel even further to reach Vostochny Port. With relatively high transport costs, Russian coal has historically been at a competitive disadvantage to other suppliers with shortly transport distances to ports.[3]
Russian coal production began a three-year upswing in 1999, part of the Russian government’s strategy to increase coal production and build more coal-fired plants to reduce demand for natural gas, so that the country can export more natural gas. As of September 2010, there is currently a proposal to reduce the excise duty on coal production by 50 percent. This would also involve a tax system with diversified rates designed to replace gas with coal at power stations and reduce gas consumption.[8]
Russian coal production increased substantially in 2011, following a restructuring of the sector, reaching the highest post-Soviet production level. More than 80 percent of domestic coal production comes from independent producers.[7] According to U.S. Energy Information Administration statistics, the Russian government's energy strategy sets a target of producing between 441 and 496 million short tons by 2020. Almost 80 percent of domestic coal production comes from independent producers.[8]
The government's Coal Industry Development Program projects that by 2030, national coal production will grow to 430 million tons, with coal mined at 82 open cast mines and 64 subsurface mines.[9] The EIA states that as of 2012 Russia is planning new coal plants, allowing it to use less and thus export more natural gas.[7]
Mines
As of 2013, Russia’s coal industry comprises over 240 coal mining operations, including 96 underground mines and around 150 surface mines, accounting for total production of about 360 million tons of coal per year. The individual shares of the major coal mining areas in national coal production are: Kuznetsk basin: 52%; Kansk-Achinsk basin: 12%; Pechora basin: 5%; East Donets basin: 3%; and South Yakutsk basin: 3%.[9]
Proposed projects
In March 2012, Bloomberg reported that OAO Severstal, Russia’s second- largest steel producer, was among four companies planning mines and a state-backed railroad in the Siberian region of Tyva that would double the country’s metallurgical coal exports to 40 million metric tons by 2020. The projects proposed by the four companies and the railroad partly funded by the state may cost about $8 billion. Evraz Plc (EVR), Russia’s largest steelmaker, Severstal, billionaire Oleg Deripaska’s En+ Group and shareholders of Russian Copper Co. have bought licenses for coal deposits in the Tyva region since 2008.[10]
Coal Consumption
About three-quarters of Russia's coal is consumed domestically predominantly for domestic coal-fired power stations. Approximately 80% of Russia's coal production is thermal coal with the remainder metallurgical coal.[3]
The Russian power generation sector has been restructured in the last decade with most of the fossil-fuelled power generation plants privatised while the nuclear and hydropower generation assets remain under state control. The electricity sector restructuring also required the separation of generation operators from the transmission system, with the state retaining control of the latter.[11]
Coal plants
Over 140 thermal power plants in Russia run on coal[9] and coal generates 29% of electricity.[12]
Proposed coal plants
Government plans for 2020 would increase the proportion of coal-fired plants in the national fuel mix from 25% to 37%, and decrease the share of natural gas from 70% to 58%.[9]
Coal Exports
Russia is the world's third largest coal exporter, with the World Coal Association estimating that in 2013 it exported 118 million tonnes of thermal coal and 22 million tonnes of metallurgical coal.[6] The Australian Government's Department of Industry and Science estimates that in 2014 Russia exported 120 million tonnes of thermal coal and 22 million tonnes of metallurgical coal.[13]
The US Energy Information Administration noted in July 2015 that Russian coal exports "have almost tripled over the past decade."[3]In 2014, the EIA estimated that 56% of Russia's coal exports were to the European market with the rest to Asian market. Some coal exports are to China and east European countries direct vial the rail network.[3]
Russia exports to China
Note: 1 metric ton (tonne) = 1.10231 short tons
In 2009, Russia exported 12.09 million tonnes of coal to China, up 1,500% over 2008.[14] In 2010, Russia shipped 32 million tons to India, Taiwan, South Korea, Japan and China;[15] during the first half of 2010, Russia exported 6 million tonnes of coal to China, making it currently the fourth-largest coal exporter to China. Russia plans to increase annual coal exports to China to 15 million tonnes for the next five years, then increase exports to 20 million tonnes per year for the next 20 years;[14] overall, Russian officials have said they want to more than double coal exports to Asia to an annual 85 million metric tons by 2030.[16]
Russia has also signed trade agreements with China to provide for the joint-ventured development of the Ogodzhinskoye coal deposit in the Amur region in Russia's Far East, which borders China.[14]
September 2010: Coal deal reached with China
In September 2010, it was announced that Russia had agreed to supply China with 475 million tonnes of coal over the next 25 years. In the deal, China will provide Russia with a $6 billion loan to finance the development of several coal projects into large-scale mines. The announcement followed a conference on energy cooperation in Blagoveshchensk, attended by Sergei Shmatko, Russia's energy minister, and Zhang Guobao, director of China's National Energy Administration. The Russian ministry stated: "Agreements have been reached on supplies of at least 15 million tonnes of [Russian] coal to China over the next five years and at least 20 million tonnes per year afterward. China's $6 billion loan will be secured by the Russian coal exports. The money will be used for everything from mine development and construction to the building and expansion of transportation infrastructure."[14]
Russia and China also agreed to conduct a preliminary feasibility study to set up another joint-venture for the development of a coal-to-liquids project in Russia.[14]
Coal transport and export infrastructure
Railways
Export ports
Russia's coal export ports serve both the European and Asian markets. In the west ports such as at Murmansk, Ust-Luga, and Tuapse cater for exports to Europe while ports at Vanino and Vostochny in the east export to the Asian market. Russia is also tentatively developing exports to South Korea via the port of Rajin in North Korea.
Environmental and health effects
Air pollution
Since 2013, dust and gas emissions from the coal mining industry have more than doubled, reaching 549,000 tons over a level of 233,000 tons ten years ago. Emissions of fine suspended particles and sulfur dioxide by many coal-fired generating units in Russia are about 10 times higher than at coal-fired power stations in the European Union, due to a lack of pollution controls like scrubbers. The average concentration of solid particles in the air of cities in the eastern part of Russia is 30% higher than in European Russia (143 micrograms per cubic meter and 110 micrograms per cubic meter, respectively). The permissible limit established in Russia is 150 micrograms per cubic meter.[9]
Coal waste
In the Kemerovo Region, coal mining is responsible for over half of all wastes (55%).[9]
Impacts of Ukraine invasion 2022
Russia’s invasion of Ukraine provoked a series of economic measures to rapidly cut at least Europe’s dependence on coal, oil and gas imports from the country. While much of the media coverage focussed on Russia’s oil and gas exports to Europe, it is also a major coal exporter. In 2020, Russia exported 177 million tonnes of thermal coal and 30 million tonnes of metallurgical coal, making it the third and fourth largest exporter in the world. In Asia, the response to Russia’s invasion has been more muted, but there were signs of at least a short-term wariness of buying more coal cargoes. How much the spotlight shifts onto China, Japan and South Korea’s response to the crisis will be a key factor in the long-term viability of Russian exporters to the Asian market.[17]
After the European Commission announced sanctions on Russia, European utilities and steel companies are under pressure to cut Russian coal imports and involvement with projects in the country. Wood Mackenzie estimated about 30 per cent of Europe’s metallurgical coal imports and 60 per cent of thermal coal imports originate from Russia.[18]
Some Chinese utilities have reportedly been advised by banks and government authorities to hold off buying cargoes of Russian coal due to the prospect of international sanctions. Another trader said ship owners had been warned against docking at Suek’s Vanino Bulk Terminal in Russia. In the first eight months of 2021, China imported almost 27 million tonnes of coal from Russia. Russia exported 194 million tonnes of thermal coal in 2020, making it the world’s third-largest exporter after Indonesia and Australia. The CEO of Australian coal exporter Yancoal, David Moult, said the wariness of Japanese and South Korean utilities about buying Russian coal is likely to increase the market for Australian and other exporters and sustain the current high price.[19]
“It seems like some Chinese state-owned enterprises are staying away from Russian coal for the moment. I tried to sell Russian coal to a state-owned group, and they cited the invasion and said they were instructed to stay away from it for the time being,” said a South Korean-based coal trader.[19]
Tigers Realm Coal, an Australian company building the Amaam coal mine in Russia’s Far East, acknowledged the impact of sanctions is likely to delay the completion of its coal preparation plant. The Russian Direct Investment Fund (RDIF), Russia’s sovereign wealth fund created in 2011 by then-President Medvedev and Prime Minister Putin, holds a 7.9 per cent stake in the company and facilitated BV Mining, a Baring Vostok Private Equity affiliate, buying an 18.2 per cent stake for A$36.2 million. Until early February, RDIF had a director on the company’s board. On February 26, the US Government announced it would institute “full blocking sanctions” on RDIF as a way of curtailing Putin’s ability to “expand the instruments of war and repression.”[20]
Reports
- Vladimir Slivyak and Olga Podosenova, "Russian coal industry: environmental and public health impacts and regional development prospects," EcoHealth, June 2013.
Articles and Resources
Sources
- ↑ 1.0 1.1 1.2 BGR Energy Study 2019 - Data and Developments in German and Global Energy Supplies (23), 200 p, Hannover, Germany
- ↑ 2.0 2.1 TACC,"The Ministry of Natural Resources assessed the security of Russia with coal reserves", TAC website, Accessed July 2021
- ↑ 3.0 3.1 3.2 3.3 3.4 US Energy Information Administration, "Russia", July 28, 2015.
- ↑ Elena Safirova, "The Mineral Industry of Russia", US Geological Survey, January 2015, page 7.
- ↑ 5.0 5.1 Energy Resources: Coal, World Energy Council, Country Notes, 2013.
- ↑ 6.0 6.1 "Coal Statistics", World Coal Association, September 2014.
- ↑ 7.0 7.1 7.2 "Russia Background: Coal," EIA, Sep 18, 2012.
- ↑ 8.0 8.1 "Coal: Russia" EIA, accessed Sep. 2010.
- ↑ 9.0 9.1 9.2 9.3 9.4 9.5 Vladimir Slivyak and Olga Podosenova, "Russian coal industry: environmental and public health impacts and regional development prospects," EcoHealth, June 2013.
- ↑ Ilya Khrennikov, "Russia Plans $8 Billion Siberia Investment to Boost Coal Exports," Bloomberg, March 1, 2012.
- ↑ International Energy Agency, Russia 2014: Energy Policies Beyond IEA Countries, June 2014, pp. 183.
- ↑ Current Situation of Coal fired Power Plants in Russia Federation and the Implementation Options of Clean Coal Technologies, The Centre for Research and Technology, Hellas, Dec 2017
- ↑ Resources and Energy Quarterly: June Quarter 2015, Department of Industry and Science, July 2015, pp 25 and 34.
- ↑ 14.0 14.1 14.2 14.3 14.4 Luke Burgess, "Russia Inks $6 Billion Deal with China to Supply 475 Million Tonnes of Coal" Energy & Capital, Sep. 10, 2010.
- ↑ Ilya Arkhipov and Yuliya Fedorinova, "Russia Plans to More Than Double Coal Exports to Asia by 2030" Bloomberg, Jan. 24, 2012.
- ↑ Ilya Arkhipov and Yuliya Fedorinova, "Russia Plans to More Than Double Coal Exports to Asia by 2030" Bloomberg, Jan. 24, 2012.
- ↑ Coal Wire Weekly Bulletin, Global Energy Monitor, March 4, 2022
- ↑ International companies with exposure to Russia, Reuters, Feb 28, 2022
- ↑ 19.0 19.1 Chinese buyers hesitate to procure Russian coal amid Ukraine conflict: sources, S&P Global, Feb 24, 2022
- ↑ Public Announcement, Tigers Realm Coal, Feb 28, 2022
External resources
- Igor Artemiev and Michael Haney, The Privatization of the Russian Coal Industry: Policies and Processes in the Transformation of a Major Industry, World Bank, April 2002.
- E. Kakaras, A. Tumanovsky, V. Kotler, N. Koukouzas and E. Karlopoulos, "Current Situation of Coal fired Power Plants in Russia Federation and the Implementation Options of Clean Coal Technologies", Draft of Presentation for the European Conference on coal research and its applications, 2004.
- Energy Strategy of Russia for the period up to 2030, Ministry of Energy of the Russian Federation, 2010. (Pdf)
- Ugol Magazine 2012, Ministry of Energy of the Russian Federation, 2012.
