RBTH Asia reported that Russia intends to upgrade its port and railway infrastructure in the Far East in order to boost coal exports to Asia. Experts polled by RBTH Asia have pointed out that coal mining in Russia is more profitable than in Asia. However, an increase in Russian coal exports is hampered by the need to modernize the infrastructure first.
The deficiencies of the transport infrastructure in the Russian Far East result in the transportation costs make up 60% of the cost of coal.
A senior analyst from the Veles Capital investment company, Mr. Ayrat Khalikov, agrees that the main bottleneck for Russian coal exports to Asia is the capacity of Russian ports.
He said that “There have been numerous instances when trainloads of coal were stuck because the ports were unable to start loading. An increase in coal production envisaged by Russian companies does not match with the current port capacity. It should also be said that the capacity of railways in Russia has also been exhausted.”
According to the Russian Energy Ministry, in January to May 2013 coal production in Russia grew by 1.1%, to 142.7 MnT while export grew by 5.2%, to 53.6 MnT. .
In an Energy Ministry estimate released in April, Russian coal supplies to China in 2013 should rise to 20 MnT, against last year's 19.3 MnT. .
In early June, Igor Zyuzin's Mechel Company signed its third this year's long term agreement for coal supplies.
-Sourced
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