Due to the European embargo imposed from August 10, 2022 on the import of coal from the Russian Federation, the volume of Russian exports by the end of last year sank by 7.5%. China and India are among the main economic partners of Russia at the moment, which partially offset the decline.
Thus, high prices last year allowed to increase coal exports to China by 11.2% to 59.5 million tons, and to India by almost three times – by 147.8% to 16.7 million tons. The intergovernmental agreement with China, which has been under discussion since last year, providing for the supply of coal in volumes up to 100 million tons per year, could compensate for the volumes of Russian coal exports falling out of European markets.
The possibility of coal supplies to the East through the Far Eastern ports is limited by the low capacity of Russian Railways, so the seaports of the European part of Russia began to play an important role in the export of coal. However, a long transport shoulder affects the profitability of coal shipping.
Potentially, the growth of supplies to the Asia-Pacific countries is possible in the case of the development of transport infrastructure: the modernization of the Eastern Railway landfill and the construction of the Pacific Railway, which will connect the Elgin coal mine with the sea terminal near the village of Chumikan. The construction of the branch line is planned to be completed in 2026, which will increase the volume of shipments to the countries of the Asia-Pacific region by 1.5 times and reduce the costs of coal mining companies.
Coking coal is the main fuel in steel production, therefore, the restoration of the steel industry in China with the removal of covid restrictions, as well as the growth of metal production in India can ensure the preservation of demand for Russian coal. Despite the "green" agenda and the transition to clean energy, coal remains an important energy resource, and the developing Asian industry requires a large amount of cheap energy.
Coal is delivered to China from the Far Eastern ports, where coal is delivered mainly by rail. The North-South transport corridor connecting the north-western ports of Russia with India via Iran is used for sea coal supplies to India. However, the lack of berths, terminals for coal transshipment, as well as the high congestion of the route increase the delivery time and the cost of transportation.
The use of the Northern Sea Route could improve logistics and reduce the cost of sea transportation of coal not only to China, but also to India, an experimental flight for the delivery of 30 thousand tons of coal from Kuzbass to China is planned to be carried out this year. But the infrastructure of the Northern Sea Route is not yet designed for mass coal supplies, especially with the use of large-tonnage vessels.