It is reported that the Russian government has proposed that domestic coal producers should consider the introduction of temporary limitations of coking coal exports in order to fully satisfy domestic demand and to avoid a shortage of coking coal in the domestic market following the recent accident at the country's largest coal mine Raspadskaya.
According to the data issued by the Rosinformugol agency, in 2009 Russia produced 51.6 million mt of coal concentrate, of which 83 percent, i.e. 42.8 million mt, was delivered to Russian consumers. The Raspadskaya mine's monthly average production of concentrate before the accident amounted to 505,000 mt. If the mine does not resume its operations before the end of the current year, the shortfall in the domestic market could reach 4 million mt.
Raspadskaya Coal Company has already stopped its coal exports due to the accident, and initially will deliver coal under previous contracts only to five of its main customers, including coke producers Kemerovo Koks and Gubakha Coke (recently sold by United Metallurgical Company to Stroyservis), as well as Evraz's steelmaking subsidiaries Nizhny Tagil Iron and Steel Works (NTMK) and Novokuznetsk Iron and Steel Plant (NKMK), and Mechel's Chelyabinsk Metallurgical Plant.
Accordingly, this sales policy will be implemented until the company restores its previous levels of coal production. Meanwhile, the company will look forward to resuming supplies to its other traditional customers in line with the increase in coal output.
As SteelOrbis previously reported, on Wednesday, May 19 Raspadskaya Coal Company announced a situation of force majeure to its counterparties, saying that its semi-hard coking coal monthly output will fall to 350,000 mt from 950,000 mt, while its monthly coal concentrate sales will decrease to 255,000 mt from 760,000 mt, following the recent mine accident.