Andrei Karunos

    «A share of coal in Russia’s fuel and energy balance should inevitably grow,» – stated Michael Fradkov, the Russian Prime-Minister, in the town of Kemerovo, the administrative center of Kuzbas (the Kuznetsk Basin), where he presided over a meeting dedicated to restructuring Russia` s coal mining industry and prospects of its further development.
    Below are some key statements made in the course of the meeting.
    In the opinion of Aman Tuleev, the Governor of the Kemerovo Region, the coal mining industry is on the edge of a new crisis due to underestimating the role of coal as an energy resource. According to data offered by Mr. Tuleev, a share of coal in Russia’s fuel and energy balance hardly reaches 19 %, while that in the world fuel and energy balance totals as much as 39 %. "Even Japan, which has not a single tonne of its own coal, generates 24.5 % of its entire power supply by burning coal," – highlighted Mr. Tuleev.
    The Governor noted that over the recent three years coal consumption in Russia has not grown. The main reason for this is a biased preference given to the natural gas as an energy resource. The situation is additionally complicated by the tariff policy of the Russian Railways JSC. According to the Governor’s data in 2005 Russia’s domestic railroad tariffs for coal transportation increased by 18.6 % on average, while world prices for coal went down more than thrice.
    Mr. Tuleev offered the Government to develop a national coal mining development program for a period until 2020 and provide for measures to prevent a new crisis in the coal mining industry. A target-oriented program of constructing new power plants based on the most modern coal burning technologies could become a part of this strategy. To encourage potential investors, Mr. Tuleev proposed to assist them in obtaining loans and even offered that interest rates should be partly cover at the expense of the Federal Budget.
    The Governor believes that, with the gas fired power plants shifted to burning coal, coal consumption would increase by at least 30 million tonnes. According to the Governor` s estimation it would cost approximately $ 1 billion to shift 27 gas-coal fired power plants (out of 56 ones currently existing in Russia) to burning coal only. Mr. Tuleev also asked the Government to sell Ekibastuz (Kazakhstan) coal fired combined heat and power stations located in Ural and Siberia to Russian coal mining companies for them to close their coal production loop.
    Vladimir Avetisian, the member of the Board of Directors of RAO UES of Russia, offered no objections against shifting 27 power plants to coal. However, he noted that the power generation sector did not have its own money required for this purpose and therefore recommended that the coal mining companies should exert their own efforts to attract investments in the power industry by using the process of restructuring this sector. At the same time Mr. Avetisian expressed an opinion that the Government should have supported a more rational balance between prices for coal and natural gas. In turn Vladimir Yakunin, the president of the Russian Railway JSC, was pretty reluctant to keep any dialogue on this subject matter and called incongruous all proposals to reduce railroad tariffs on transportation of freight as over the recent five years their growth had been below the inflation level.
    Representatives of the Government promised to have come up by summer 2006 with a comprehensive report on development of Russia’s fuel and energy sector for a period until 2020, which would take into account the proposals made on the part of Russia` s coal mining industry. 

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