Russia and coal

{{#badges:CoalSwarm|Navbar-Russiacoal}}Russia is the world's sixth largest coal producer, with three-quarters consumed domestically predominantly for domestic coal-fired power stations. Approximately 80% of Russia's coal production is thermal coal with the remainder metallurgical coal.

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.

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. 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.

The US Energy Information Administration noted in July 2015 that Russian coal exports "have almost tripled over the past decade."

Background

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). The US Geological Survey estimate that half the country's coal reserves are lignite.

Most of Russia's coal is produced using through open cast mining, and 76 percent of the coal produced is hard coal.

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.

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.

History

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.

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. 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.

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.

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. The EIA states that as of 2012 Russia is planning new coal plants, allowing it to use less and thus export more natural gas.

Coal production

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%.

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.

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. In 2010, Russia shipped 32 million tons to India, Taiwan, South Korea, Japan and China; 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; overall, Russian officials have said they want to more than double coal exports to Asia to an annual 85 million metric tons by 2030.

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.

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."

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.

Coal plants

Over 140 thermal power plants in Russia run on coal and coal generates 29% of electricity.

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%.

Coal transport and export infrastructure

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

Condemned: Russian coal industry displaces Siberian indigenous people

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.

Coal waste

In the Kemerovo Region, coal mining is responsible for over half of all wastes (55%).

Reports

• Vladimir Slivyak and Olga Podosenova, "Russian coal industry: environmental and public health impacts and regional development prospects," EcoHealth, June 2013.

Articles and Resources

Related SourceWatch articles

• Global use and production of coal
• Australia and coal
• Britain and coal
• China and coal
• Colombia and coal
• Germany and coal
• Indonesia and coal
• Japan and coal
• New Zealand and coal
• South Africa and coal
• United States and coal
• Coal reserves

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.

External Articles

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