Mines of Kuzbass reduced coal supplies

In Kuzbass, there is a "critical situation" with the EXPORT of coal, which threatens producers with fines and loss of market share, says local minister Oleg Tokarev. But the Eastern range is working to the limit,

In the first quarter of 2022, Kuzbass enterprises shipped 12.94 million tons of coal eastward, which is 18% less than planned by the Russian Railways (RZD). Oleg Tokarev, Minister of the Coal Industry of the Kemerovo Region, told RBC about this.

Of these, 4.3 million tons were delivered to the east in March, which is 0.5 million tons less than a year earlier.

According to Tokarev, by the end of 2022, it is “highly likely” that it will not be possible to catch up with the transportation of such an amount of coal. In 2021, 53 million tons were shipped from the region, and in 2022, Kuzbass was agreed to export coal through the Eastern landfill (BAM and Trans-Siberian Railway) in the amount of at least 58 million tons.

The official assesses the situation with the export of Kuzbass coal as "critical". Failure to fulfill contractual obligations will lead coal miners in the Kemerovo region to loss of income, fines from buyers, and in the event of a prolonged drop in supply, to the possible loss of individual sales markets, he added. A source in a large coal company agrees with this. According to him, the volume of unexported coal throughout RUSSIA, including Kuzbass, in the first quarter of 2022 increased several times compared to the same period last year.

Kuzbass accounts for almost 60% of coal production in Russia. RBC sent inquiries to the press services of SUEK, Mechel and Raspadskaya.

In January-March 2022, the loading of Kuzbass coal to Russian consumers increased by 5.3%, to 21.1 million tons, the Russian Railways press service reported. At the same time, loading to consumers at the Eastern range increased by 1.5 times, to 1.1 million tons, they added. Information about the reduction in supplies from Kuzbass to Russian Railways is not commented.

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Now the priority in coordinating requests for transportation through the Russian Railways network is given to goods for domestic consumption, raw materials for continuous production and high value-added goods, a company representative explains. Particular attention is paid to the transportation of fuel to housing and communal services and energy enterprises. But due to the increased interest in eastbound traffic from most Russian industrial enterprises, the BAM and the Trans-Siberian are operating at the limit of their capabilities, he adds.

On April 1, Governor of Kuzbass Sergey Tsivilev complained about the workload of the railway infrastructure of the Eastern Test Site in a letter to President Vladimir Putin. RBC has a copy of the letter, its authenticity was confirmed by two sources - in the railway operator and the transport company. In order to unload the Eastern landfill, he proposed to minimize "up to the complete exclusion" of transit transportation of goods in containers. This will increase the growth of Russian export cargo in the east direction by 10–12 million tons, which is equivalent to $2–2.4 billion in revenue.

Tokarev told RBC that he was not aware of Putin's decision on this letter from the governor. Presidential spokesman Dmitry Peskov said the Kremlin "traditionally does not comment" on official correspondence.

The press service of Russian Railways noted that in order to expand export opportunities in the eastern direction, the monopoly is negotiating with the Chinese Railways on the transfer of additional freight trains to them, and also uses connected and heavy-duty trains to increase the carrying capacity of the line. “Due to this, in March [2022] alone, more than 3 million tons of cargo were transported through the Eastern landfill,” a company representative says.

Russian Railways has repeatedly noted that Russian exporters can increase transportation in alternative directions where the infrastructure is underloaded. For example, along the North-South transport corridor: through the Samur border crossing to Azerbaijan or through the ports of the Caspian Sea.