If you are looking for coal in the Barents Region, Komi Republic is the place to look. Komi is the only Barents subregion directly involved in coal mining. Production is operated by the company Severstal and comprises mainly two key subdivisions, Vorkutaugol and Intaugol.
Over the past twenty years, the annual output at Vorkutaugol and Intaugol has fallen with 46.6 percent, figures from Patchwork Barents show. In 1990, their combined production was close to 30 million tons. In the period between 1990 and 2002, production fell drastically to about 12.9 million tons.
The decline was primarily caused by an unfortunate turn of events in Russia’s mining sector. In 2002, domestic coal markets collapsed, which lead to a restructuring of the industry, Komiinform reports. As a result, a significant number of the Pechora mines were closed, consequently reducing the total production to less than half of the 1990-level.
Since 2002, the production trend has been relatively stable. However, the past few years (2010-2013) may indicate a recurring upturn. In 2013, coal production amounted to 14.9 million tons, which is the highest since the big downturn in 2002.
Increased export via Murmansk
Expert Online informs that the coal mining industry currently comprises 16 percent of Russia’s energy balance.
According to Severstal’s annual report for 2013, market conditions in the mining sector are challenging, particularly for coking coal production. The company’s sales of coking coal declined six percent in 2013. Domestic coal sales are the most difficult, although the international coal market is also a challenge.
At the same time, the coal market is under constant change. Over several years, coal exports via Murmansk have been on the increase. Over 13 million tons (+12 %) of coal was exported via Murmansk Commercial Seaport in 2013. A significant share of this came from Komi.
A dusty future for coal mining
Russia’s Energy Strategy (ES) 2030 aims to increase coal production in the Pechora Coal Basin to 22-24 million tons by 2030. The realisation of this goal would give a substantial boost to the regional economy in Komi.
But despite its regional importance, the Pechora coal plays a rather insignificant role on the national level. The regional production in 2013 amounted to only four percent of the total Russian production of 352 million tons, the Russian Ministry of Energy reports.
The Komi Republic’s Ministry of the development of business, transport and communication, expects little financial support from the ES in this regard. “It is clear that, by assigning the Pechora Coal Basin a secondary role in the implementation of Russia’s Energy Strategy, the ES-2030 is not going to allocate any significant funds for its development” (the ministry’s prognosis of the coal mining sector, translation from Russian).
Coal mines close to Vorkuta in Komi Republic (Photo: Google Maps)
As an overall assessment, the future of Komi’s coal mining sector is not looking too bright. Production will most likely not measure up to its “1990-level” any time soon. It has been pointed out by the federal Ministry of Energy that the Pechora Coal Basin has small development prospects. High costs on coal are hampering future production growth.
As for the export, similar prospects can be made. Stricter environmental policies, combined with high costs and the weakening of coal consumers’ currencies, may indicate a dusty future for coal mining in the Barents Region.