The Coal Trader

Coal News for Mining & Investing Professionals

Kolmar halts coal washing plants due to excessive coal stockpiles

Kolmar, coking coal producer in Yakutia, has halted two washing plants and limited the load of the third plant by 50% since March 12 due to excessive coal stockpiles. The accumulation of excess coal stockpile amounting to 1 mio t caused by difficulties in shipments as a result of congestion at the railway infrastructure in Yakutia and the Eastern Range.

The situation is further exacerbated by ongoing maintenance on RZD network connected with Vanino terminals, as well as issues with the approval and taking cargoes in this direction. In April, the company has to load 0.57 mio t into railcars, but RZD agreed only on 75% of the required volume.

In 2023, the company reduced production to 11.6 mio t (-0.8 mio t or -6.4% y-o-y). Due to the limited carrying capacity of railroad infrastructure and unfavorable conditions in the international coal market, Kolmar’s plans are likely to be revised downward.

Moreover, higher railroad tariffs and port transshipment rates, as well as the export tax implementation from March 2024 make export supplies unprofitable, forcing Russian coal companies to suspend export shipments, reduce production, and in some cases shut down mining facilities and phase out new projects. These factors also have a negative impact on the budgets of coal-mining regions.

Thus, the availability of high-quality Russian coal dropped significantly in Q1 2024, and by Q2 2024 and Q3 2024 the supply deficit from Russia is expected to deteriorate.

Source: CAA