Elga Coal: out of joint venture

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New deep water sea port Elga, which is under construction on Manorski Cape of Khabarovsk Krai, has increased its designated capacity on ship size to be ready accept Panamax class ships. Initially port was designated to moor bulkers of not more 85K tons deadweight, but now Elga raises the stakes. Panamax type ships have deadweight 120K tons and draft about 18 meters, and are able to go through Panama Channel. By the end of January Vanino terminal of Daltransugol company in Khabarovski Krai accepted such bulker Cape QUINGDAO of deadweight 170 K tons and filled it with Yakutian coal during 60 hours.

Elga port is continuation of Russian-Chinese project of completely private Pacific Railroad, target to join extremely rich Yakutian coal deposits with the sea coast for export to China and Asia-Pacific. Investor is planning in 2024 to test the road of total 531 km, which has now 350 km already completed. Reportedly, construction is running with extraordinary speed, and the road, since completed, will be able to transfer annually 50 million tons of Yakutian coal.

Last May Yakutian Head Nikolaev stated, that Republic could export 36 million tons in 2023, but received a limit from Russian Railways monopoly 26 million only by the limited capacity of the East polygon. In the meantime, in 2024 Yakutia may export 52 million, and to 2030 – 70 million tons. But, now “ElgaUgol” of “Rostech” as a key manager of Yakutian coal has lost its key Chinese partner Guahong Ocean Shipping (GH Shipping), which panned to increase export volume by times. Joint venture, announced by the end of 2020 with this partner, suggested by Chinese ambassador in Russia Zhang Hanhui, was not created. Resulting, company’s supply of coal in 2021 achieved 8,5 million tons only instead of planned 18 million. Chinese company could not help ElgaUgol to enter domestic Chinese market, since was not equally influential to overcome some regulations and customs barriers concerned to Covid-19.

In the meantime, Chinese coal market turn highly attractive for Russian suppliers in 2021 thanks to the unofficial import ban on Australian coal, being then obvious leader on coking coal supplies. Using that, Russian companies increased their supplies up to 52 million tons. But, for ElgaUgol ambiguous plans of increasing supplies were not easy – Chinese consumers had to evaluate parameters of coal and insert it into local industrial market. That takes a time and local partner, despite that quality of Elga coal is fully comparable with leading Australian sources like Gunilla, Gordston, and even overcome them.

Its significant, that Yakutia has a set of successful projects with China – 2 mining and coal processing joint plants in Neryungri district of Russian Colmar and Chinese air construction company AVIC, and brick factory in Namski district. So, considering growing capacity of the coal export from Yakutia to China, limited capacity of existing railroads and timetable of construction railroad to Elga port, Yakutia President Nikolaev met by 5 February with Chairman of Russian Railroad Company. They accorded possible volume of Yakutian coal export to China and India in 2024, which will be equal to last year – 26,3 million tons, and include possible supplies via new Elga port and new cross Amur rail bridge Jalinda – Mohe. Nonetheless, both parries hope that new Pacific railroad to Elga will help overcome it.