Coal exports will grow in the coming years

26 september 2018

The participants of the round table "Potential of Russian Coal Exports" that was held at the Analytical Center discussed the competitive advantages of Russia. The event moderator Victoria Gimadi, Head of the Department for Fuel and Energy Sector of the Analytical Center, said that the dynamics of coal exports was growing worldwide, and Russia had good prospects in this respect.

"The weakening of the ruble has made it possible to increase the competitiveness of the Russian coal companies and the profits earned from ruble exports in the industry," said Vyacheslav Kulagin, Head of the Department for Research of Global and Russia's Energy Sector at the Energy Research Institute of the Russian Academy of Sciences.

Mr. Kulagin states that the international situation makes its contribution: the shutdown of some mines in China, which led to a doubling of imports by this country, and the increase in coal consumption in India, which led to an increase in imports by 30%. India and China are key players, about 80% of the world coal market will depend on them. On the other hand, this indicates a high volatility of the market, the expert noted.

As for Europe and other developed countries, they are gradually refusing to use coal. "Obviously, this type of fuel will leave the energy balance of some countries. Thus, the situation with the Russian coal exports will be favorable in the coming years, but it will start to deteriorate in the future," predicted Mr. Kulagin.

Yury Plakitkin, Head of the Center for Analysis and Innovations in Energy Sector of the Energy Research Institute of the Russian Academy of Sciences, spoke about the risks for expanding coal exports, noting the systemic decline in demand in the long term. "There is a need to balance risks and expand the industry through diversification projects," concluded Mr. Plakitkin.

Vladimir Tuzov, Director for Strategy at SUEK, did not agree with the forecasts of demand reduction after 2024. He believes that there are prospects in the longer term. "Russia is the third largest world exporter after Australia and Indonesia. According to analysts, exports from Indonesia will decline, and Russia can compete for this niche, especially since our coal is of high quality," he explained. "World energy needs by 2050 will grow by about 25%, which again leads to the increased demand," Mr. Tuzov predicted.

Representatives of federal and regional executive bodies, coal mining companies and expert organizations entered the further debate.