Russian coal grows despite the very long distance to consumers
With 177 billion short tons of coal at the end of 2014, Russia held the world’s second-largest recoverable coal reserves, behind the United States. Russia produced 394 million short tons in 2014, making it the sixth-largest coal producer in the world, behind China, the United States, India, Indonesia, and Australia. Almost 80% of Russia’s coal production was steam coal, and slightly more than 20% was coking coal.
In 2014, Russia consumed more than 60% of its coal production and exported the rest. Although coal accounts for a relatively modest share of Russia’s total energy consumption, coal is a more vital part of consumption in Siberia, where most Russian coal is mined.
More than half of Russia’s coal production comes from the Kuzbass basin in central Russia. Kuzbass coal must travel long distances by rail (about 2,600 miles) to reach Russia’s Baltic port of Ust-Luga, for export to European countries. The overland distance to Far East ports for export to Asian consumers is even greater.93 This long overland transport generally puts Russian coal at an economic disadvantage to competing sources of coal. Even so, in 2014, Russia was the third-largest coal exporting country in the world, exporting 171 million short tons, seaborne and overland. The top two coal exporters were Indonesia and Australia.
Russia’s coal exports have generally grown steadily since the late 1990s, with exports to Asia growing strongly in the past few years. In 2015, about 45% of Russia’s coal exports went to Asia (Figure 9).94 Russia’s total coal exports have approximately doubled over the past decade. Exports are expected to continue to grow in the future. In the short term, the weaker ruble, caused by sanctions and low oil prices, should make Russian coal exports more price-competitive in both Europe and Asia.
Russia’s coal-exporting ports are geographically located to serve either European or Asian markets. Some of Russia’s major coal ports include Murmansk, Ust-Luga, and Tuapse, all of which lie in the West and handle exports to Europe. Vanino and Vostochny lie in the East and handle exports to Asia.95 China and some East European countries receive imports from Russia directly by rail.96 Russia has plans to expand port capacity to facilitate more coal exports to Asia.