Coal Age

MAR 2013

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russian coal continued The third Russian largest coal producer SDS-Coal has shown an impressive 11.4% growth rate compared to 2011. For the first half of 2012, the growth parameters for mining reached record highs of 23% compared to the first half of 2011. However, in the second half of the year growth rates began to slow. The incredible level of growth can be attributed to a major equipment modernization program. As an example, the Chernigovets mine was supplied with two BelAZ haul trucks with a capacity of 240 and 320 mt. The mine had been using large Hitachi and Komatsu hydraulic excavators with bucket capacities from 26 to 29 cubic meters. In May, the mine started using a P&H; 2800 electric shovel. A second P&H; 2800 was commissioned in September. The other large Russian coal miners in 2012 reported mixed levels of growth. State Investment Program In 2012, the Russian government approved a long-term program for the development of the coal industry through 2030 prepared by the Ministry of Energy. The document consists of eight sub-programs and activities including all existing federal programs, sector strategies and already taken orders of the government in respect to the coal industry. The main point of the program is the assessment of the prospects of demand for Russian coal, based on the predicted conditions of internal and external markets. The program provides the investment of RUB 3.7 trillion ($123 billion) in the coal industry during the next 17 years. The federal government will invest about 9% out of the total level—only RUB 251.8 billion ($8.3 billion). With this program the government is planning to reach a new level of publicprivate partnership in the coal industry. It assumes that by 2030, coal production in the country will rise to 430 million mt and that there will be 82 surface mines and 64 underground mines, while the level of labor productivity (coal output per worker) will be five times higher than in 2010 (9,000 mt and 1,880 mt, respectively). Over the entire period of the program realization it will put into operation 505 million mt of new and upgraded facilities for the extraction of coal—375 million mt of unviable and unprofitable businesses will be retired, reducing the level of depreciation of the main assets of the industry from current 70%-75% to 20%. The Russian coal demand for electric power is predicted to grow from 68 million to 90 million mtpy with an increase in the share of exports in the total structure of the supply of coal from 38.5% to 43%-44%. Also it should be observed the increase in the amount of capacities of coal terminal ports in Russia from 69 million to 190 million mt. It also assumes the implementation of this program will ensure the growth of the federal budget income from organizations of the coal industry to RUB 1.7 trillion ($570 billion). Implementation of the program will reduce transportation costs and improve the efficiency of coal supplies. The average distance of transportation of coal production will decrease by 1.2 times, including in the domestic market—by 1.4 times. To reduce the impact of transportation it will also be developed in the local use of mined coal in the coal basins. In general, in accordance with the program, it will create new centers of coal production, mostly in the eastern part of the country. Thus, the share of Eastern Siberia in the total structure of coal production will increase from 25.8% to 32% while the share of the Far East will rise from 9.7% to 15.2%. Kuzbassrazezugol invested heavily in an overburden removal program. On the highwall of this pit in Kemerovsk Oblast, miners have painted 200 million tons. 40 www.coalage.com March 2013

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