Export opportunities are deemed vital to driving Russia's coal production, including thermal coal and coking coal, said an insider at the 15th China Coal Market Summit 2024 in Nanning, southwestern China's Guangxi last week.

Sergey Nedelin, head of the coal department at Metals & Mining Intelligence (MMI), noted the export market development was the main reason for the output growth from 2010 to 2018. Thermal coal output in Russia ranged 257-342 million tonnes over the past 14 years.

Russia's thermal coal production has been decreasing after 2021, and its recovery will largely depend on export opportunities, he added.

In 2022, thermal coal mining declined 10% year on year. After the reorientation to the Asian market, internal logistics issues and sanctions pressure have continued to significantly impact export volumes.

From the second half of 2022, Russian exporters have been looking for new opportunities in the Asian market, with China, India, Turkey, South Korea and China's Taiwan being the main export destinations for Russian thermal coal. Shipments to Japan have virtually ceased in 2023.

Nedelin anticipated a 4.5% drop in 2024's thermal coal output compared to 2023. Lower shipments via southern ports will be one of the main causes of the decline in exports.

In addition, Russia's thermal coal exports to China via border crossings soared 48% from a year ago in the first eight months of this year, reaching 13.3 million tonnes. Shipments through border crossings are expected to remain high, but further growth is constrained by several factors.

The growth in exports from border crossings led to a decrease in transportation speeds and an increase in wagons' idle time at the border. Most large Chinese power plants are located far away from the border with Russia, which reduces the supply economic efficiency.

In terms of coking coal, Russia's exports of the key coke-making material have been growing, mainly as domestic consumption has been stable, and almost all greenfield and capacity expansion projects are export-oriented.

The growth in production of raw coal and washed coal has been offset by an increase in exports.

Russia's export destination of coking coal has shifted towards Asia in recent years. The export quality structure has been changing with a rise in the share of semi-hard coking coal. Russian coals are split up into hard coking coal and semi-hard coking coal according to quality.

The nation's coking coal exports are also curbed by long distances from coal production facilities to export terminals and border crossings, as well as logistical constraints of Russian Railways.