Regional focus
Hauled over the coals
The Russian invasion of Ukraine had worldwide implications for many sectors – not least that of the mining industry – sparking off months of volatility and high pricing in the commodities markets. However, as damaging as the war has been for the world, the international response had a considerable affect on Russia and its coal miners. Andrew Tunnicliffe speaks with Natalie Biggs, global head of thermal coal markets at Wood Mackenzie, to learn how the war has disrupted supply chains and what effect, if any, global sanctions have had on Russian coal exports.
s Russia’s stalled campaign in Ukraine rumbled into its eighth month, Vladimir Putin ordered a “partial mobilisation” of male citizens. His call was met with shock from many Russians, either fearing the prospect of going to war themselves or of losing a loved one in a seemingly futile conflict. Of course, some would have welcomed the call, likely the result of over- enthusiastic optimism or misguided patriotism. As that news broke, so too did speculation that letters had begun landing on the desks Russia’s energy company chiefs, emblazoned with the Russian crest and ‘Ministry of Energy’. It was reported they contained an order from Putin, signed by Deputy Minister Pavel Sorokin, for the majority of male employees to attend military draft offices across the country in the coming two weeks. Word rippled across social media – first via users of instant messaging service Telegram, then Twitter, before being picked up by some mainstream outlets. Right now, the veracity of that news remains unclear, particularly given that one of the original sources has since said it was a hoax. Fact or fiction, one thing is certain: Russia’s mining sector was already facing a skills shortage – like many other nations – and
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could probably ill afford to lose more labour. Any additional constraints on labour would disrupt coal supplies at the worst possible time, as winter approaches. While such problems would have a global impact, it’s important to not underestimate the domestic complications it presents too. “There’s a lot of domestic demand,” says Natalie Biggs, global head of thermal coal markets at Wood Mackenzie.
Supplying the world, for now In 2021, the country produced 438 million tonnes (mt) of coal – 336mt was thermal, used in energy generation, and the remainder was coking coal, used mainly in steelmaking. Around a third of thermal was used domestically, heating and lighting homes and businesses either through power plants or used independently. Speaking during the summer months, even then acknowledging falls in extraction, Energy Minister Nikolay Shuvalov sought to reassure Russians, telling them that domestic supply would be maintained. “It’s quite possible that this will end up being true, however, given falling coal export, given falling coal export figures, and extractions themselves, seen in recent months.
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