The Ministry for Economic Development of the Russian Federation has proposed the cancellation of the Russian Railway's (RZD) exceptional reduced tariffs on transporting raw materials (coking coal) for export, with the aim of increasing competition in the domestic raw material market.
According to the Ministry's program, the domestic market is characterized by a shortage of qualitative grades of coking coal, which cannot be covered in the near future even by the commissioning of new mines or by forbidding their export.
The basic metallurgical coke resources in Russia are concentrated in the eastern regions of the country, which makes their export more attractive compared to delivery to the central or European parts of Russia. The desire of the domestic consumers to compensate the shortage in question is accompanied by the insufficient development of port infrastructure. Thus, the Russian market becomes "closed" to importers, while the coal prices in the domestic market exceed the level of world prices.
Moreover, the Ministry for Economic Development has also proposed to stimulate the mining companies towards long-term development of new coalfields by offering tax benefits, and by the creation of port infrastructure, which will allow the integration of the Russian market with the world market, increasing in this way the competition between domestic producers.