The Russian Ministry of Energy proposes to help Russian coal companies by worsening conditions for Kazakh companies. Due to sanctions, the European market was closed to Russian coal miners, which led to large-scale logistical failures. The industry turned out to be unprepared for the “pivot to the East” – the transport infrastructure cannot cope with the flow of Russian goods, which are now being sold on Asian markets. Vedomosti writes about this with reference to the draft proposals of the Russian Energy Agency (REA) of the Ministry of Energy.
The department wants to rebuild the logistics of exporting goods by rail in order to unload the Eastern landfill (Baikal-Amur and Trans-Siberian Railways). To this end, it is proposed to redirect high-margin deliveries with a low share of logistics costs from the east to the west and south, as well as to revise the main tariffs of Russian Railways. Moreover, the agency is seriously considering the possibility of introducing a ban on the transit of coal from third countries. First of all, we are talking about Kazakhstan, which did not fall under European sanctions and continues to supply its products to the European market through Russian territory.
At the moment, a preference regime is in place for a number of coal regions: coal from Kuzbass, Khakassia, Buryatia and Tuva passes through the Eastern landfill with a higher priority. The government is considering maintaining this regime for next year, but Russian Railways does not see much point in it, since the main priority in a war is still given to special, military and high-tech cargo, as well as domestic transportation, regardless of cargo.
In the inertial scenario, REA expects that under the new conditions in 2022, coal exports from Russia will fall by 12.6%, to 195 million tons, and in 2023 by another 21.5%, to 153 million tons. In 2021, Russia supplied 223 million tons to world markets, of which 101 million tons came from the Eastern landfill. The optimistic scenario assumes that exports will fall by only 9% at the end of the year and amount to 203 million tons, and by 13.3% in 2023, to 176 million tons. Deliveries via the eastern corridor will not be much higher and will amount to 105 million tons in 2022 and 107 million tons in 2023.
Against this background, it is not very clear how the proposal to ban the transit of Kazakhstani coal should help relieve Russian highways. The publication cites data from the Main Computing Center of Russian Railways, according to which, from January to September 2022, the average monthly loading of coal amounted to 28.9 million tons, and transit – only 860 thousand tons, or 2.9% of the total.
“Given the increase in the tax burden on the extraction of minerals, coal enterprises could try to justify to the state the need for their targeted support in the form of subsidies,” a Russian Railways representative told the publication.
However, the publication's experts are confident that a transit ban is the fastest and most effective way to reduce the burden on transport networks and the coal industry. In their opinion, this will free up capacities in the southern and northern ports and will increase their throughput for Russian exports. This point of view is shared by the deputy general director of the Institute for Natural Monopoly Problems Alexander Grigoriev, who is sure that the solution "will lie in the political plane."
In October, Finance Minister Anton Siluanov announced an increase in taxes for the coal industry. The head of the Ministry of Finance announced an increase in the rate of mineral extraction tax (MET), as well as an export duty. In total, it was planned to collect an additional 100 billion rubles in budget revenues from the coal industry. However, the final decision on this issue has not yet been made.
