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Kamchatka coal for China

Significant coal deposit at Kamchatka west coast, Krutogorovskoye, has a long 10 years history of investment for mining project, but no practical activity up to now. Since 2014 Indian Tata Power were interested to invest here more 400 million rubles and created for that daughter company with official support of regional government. Company planned to start coal mining by the end of 2023 for Indian needs and to supply 200K tons annually for local needs as well. During all 10 years Tata Power tried to conduct geologic research and create mining project, based reportedly upon environmentally worse technology of the open mining quarry.

The problem was concerned to the awaited coal dust, dangerous for number of salmon spawning rivers at the area of 1,4 square km, distanced 70 km from marine coast and 90 km from Sobolevo town. Local branch of World Wildlife Foundation also warned publicly that coal dust is not acceptable for marine shelf, crucial for reproduction of the big set of economically valuable bioresources, endangered birds and animals. Kamchatka scientists even planned to establish here special environmental conservation legal status with strictly limited commercial activity. Lastly, global coal prices has dropped during last years, which caused closing of the whole project by Tata Power, also reportedly by the “revision of strategy in favor of increasing investments into renewable energy sources”.

So, initially designated start of coal mining on Krutogorovskoye in 2023 not occurred, even though WWF, the key opponent of the project, got banned in Russia just this year.

Nonetheless, suddenly on the early 2024 Chinese entrepreneur Sun Fengsheng established new Group on Global Food and Agro Development on Kamchatka with initial stock of 1 million rubles. By his official statement, besides food and agro product supplies Sun Fengsheng is basically planning to develop coal mining on Krutogorovskoye deposit. He clearly understand all the problems concerned to the area of West Kamchatka, having no roads and deep sea ports, but officials in Far East Development Ministry stated their readiness to help create needed transport infrastructure for the coal shipping. This deposit keeps about 945 million tons of high quality coal, interesting not only for Chinese energy, but for chemical industry as well.

Sun Fengsheng evaluates investment capacity of the project as $ 1 billion creating more than 1000 jobs. Together with Chinese marine shipping company he plans to organize coal supplies to consumers in China, transit navigation through Polar Marine Way and even ready to invest in master-plan of Petropavlovsk city development. All these plans were announced in time of recent meeting Sun with the first deputy director of Kamchatka Development Corporation and chairman of Far-East – China Friendship Society. Russians were really impressed with Sun’s plans and evaluated his high attention to specifics of environmental safety at the territory. In framework of this negotiations parties agreed to prepare more detailed Protocol of Intentions concerned to Krutogorovskoye coal mine development. Additionally, Sun Fengsheng expressed his will to create sister city relations between Petropavlovsk and Sanya on Hainan province, where his company’s headquarter is located.

The project on Krutogorovskoye includes creation of new port with full infrastructure, terminals and roads to Sobolevo. This part of project will cost about $ 60 million. But, by reliable experts only sea port here, where the sea is iced most of time, will cost $ 1 billion, regarding constant need of ice-breakers for shipping. Railroad from mine to port will cost $ 100 million more. That will increase whole project cost up to 110 billion rubles. All those parameters are now under active discussions on both sides.