Russia is increasingly seeking new buyers and wants to continue expanding into the Asian market, challenging traditional suppliers Australia and Indonesia, The Nikkei Asian Review reports.
Unlike in the West, where coal plants are constantly being replaced with greener alternatives, demand for the commodity is likely to grow as many new coal-fired power plants are about to go online in India and Southeast Asia, the report says.
Last month, Russian Energy Minister Alexander Novak unveiled an ambitious target of doubling the country’s coal exports to Asia by 2025 from around 100 million tons in 2018.
President Vladimir Putin has also urged Russian resources companies to invest more in export infrastructure, such as the Trans-Siberian Railway and ports. “The current business environment allows Russia to expand its exposure to the global coal market, to strengthen its position and raise its market share,” Putin said in late August.
SUEK, Russia’s largest coal miner, is expanding the port of Vanino, in Russia’s Far East. The port began commercial operation in 2009 and the port is expected to ship around 20 million tons of coal this year.
The company told Nikkei it plans to raise the port’s annual export capacity by 80% to 40 million tons. SUEK wants to sell more to Thailand, Vietnam and other Southeast Asian countries, where demand is expected to be strong, as well as China, Japan and South Korea, historically the three main importers in Asia.
According to figures from the International Energy Agency, global coal production rose 3% on the year to 7.55 billion tons in 2017. That year, consumption fell among the member countries of the Organization for Economic Cooperation and Development (OECD) but increased 0.4% in China, the biggest consumer, and 4.4% in India, the second-biggest consumer. With exports to Europe declining, Russia has no choice but to turn to Asia.