Russian coal producers need support and tax adjustments. This year their pre-tax profits could fall by 15-17 times, Energy Minister Sergei Tsivilev said.
“The meaning of the export duty on the exchange rate is to take away the excess profits of exporters due to the depreciation of the national currency. The key word here is excess profits. But in reality, the cost of coal on the world markets is low, the profit of the coal industry before taxes in the first half of the year fell by 97% and by the end of the year it could fall by almost 15-17 times.” — he said in an interview with TASS Sergei Tsivilev.
According to him, these tax measures negatively affect both the coal industry as a whole and the structure of coal exports: “Therefore, a balanced adjustment of tax mechanisms is of vital importance for Russian companies, which would be done taking into account the real situation of those under the strictest sanctions.”
Russian companies have generally adapted to the sanctions, but it is necessary to increase the efficiency of exports, the minister said.
“First of all, we need to more actively address the bottlenecks in the infrastructure of the Russian Railways. For example, the production capacity deficit at the Eastern site is estimated at 130-140 million tons per year, of which 85-95 million tons are coal… It can already be stated that thanks to the turn to the East, more than 70 million tons of Russian exports have been redirected from Europe to friendly countries. But, unfortunately, the current price situation on the world market does not allow exporting coal from Russia with high profitability through the North-West and South ports. Given the low processing capacity of the Eastern site, it is necessary to stimulate coal shipments in the South and North-West directions, for example, by returning discounts to Russian Railways tariffs.” – added Sergei Tsivilev.
According to him, the geography of supplies after the imposition of sanctions has already practically been formed: “These are the countries of the Global South, including India, China, Brazil, Mexico, African countries and a number of others, the Middle East has also been affected. In addition, trial shipments are being made to Latin America and North Africa. Turkey deserves a special mention.”
Minister sees prospects in Southeast Asia
“Coal is the second largest source of energy on the planet, with the world consuming more than 8.5 billion tons of it annually. There is no substitute for it even in the long term. That is why the demand for high-quality Russian coal will not decrease in the foreseeable future,” says the head of the Ministry of Energy. He believes that by 2030 India (instead of China) will become the main consumer of Russian coal.
“According to the results of the first half of the year, coal exports from the Russian Federation to China decreased by 8%, to 45.5 million tons. We are currently on a plateau and no sharp growth is expected. China’s tariffs on Russian coal are having an impact, as are the fall in world prices and the increase in logistics and production costs of coal miners in recent years, and China is trying to eliminate the imbalance in the energy sector by investing in renewable energy sources,” — explained Sergei Tsivilev, adding that from 2025 the department expects supplies to China to increase to a level of at least 100 million tons per year.
