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Russia is forced to sell its coal at a discount of 50-60% due to Western sanctions in the US and the European Union (EU) on imports of this energy resource, Deputy Prime Minister Andrei Belousov admitted today.
“Thanks to cheap energy resources (in Russia), we, in particular, were able to overcome the existing crises quite calmly. We have coal discounts of 50-60%, i.e. a downward deviation from the contract prices,” he said at the “Made in Russia” export forum.
Mining companies are forced to sell coal about twice below market prices, he said.
Belousov argued that for Russia, even under these conditions, “it is profitable and quite acceptable.”
Russian Deputy Prime Minister Alexander Novak said that Russia experienced an 8.6% drop in its coal exports in the first seven months of this year.
Novak accused, in particular, the EU of causing an imbalance in the market and breaking the logistics chain by foregoing Russian coal.
The EU ban on Russian coal imports – which will cost Russia some €4 billion, according to Brussels – was approved in April following the February launch of the Russian “special military operation” but did not come into force until mid-August.
In addition, Novak recalled that the US gave up Russian coal in April and Australia in August, while the UK will do the same by the end of the year.
However, he pointed out that the drop in exports was offset by a 6.8% increase in domestic demand due to the low flow of Siberian rivers, which forced more coal to be used in thermal power plants.
Novak recalled that Russia is the world’s second-largest coal reserves, the sixth-largest coal producer, and, with Australia and Indonesia, one of the top three exporters.
For all these reasons, he noted, Moscow plans to supply the Asian market with almost 25 million tons by rail, part of which will be shipped from ports in the Black and Azov Seas occupied by the Russian Army.
Russia’s Ministry of Economy hopes that the recent annexation of four Ukrainian regions – Donetsk, Lugansk, Kherson and Zaporiyia – will enable it to increase coal mining, not least because the Donbas is one of the main coal basins on the continent.
Last year, Russia exported more than 50 million tons to Europe, 10.3% more than in 2020; while it supplied China with 53 tons, an increase of 38%.
