African or American: Where is Ukraine buys coal

Ukraine needs thermal generation must 24.5 million tons of coal per year. This is the forecast balance of the Ministry of energy and coal industry. Of this amount, 9 million tons are anthracite, which is made on the temporarily uncontrolled territory, all the rest is gas stamps.

In 2016 Ukraine purchased abroad, 15.6 million tonnes of coal and anthracite in the amount of 1 billion 467 million USD. Domestic production for the year increased by 2.8% to 40.8 million tons of raw coal (of which energy to 32.5 million tons). However, gosshahty production drastically reduced - by 14%, to 5.8 million tons. The sharp pace of declining production in Western Ukraine - from 20 to 24%, while growing the Donbass - Donetsk region gave a 9% increase, and Luhansk - 16%.

Prime Minister Vladimir Groisman says that he does not see alternative supply of coal from enterprises in the occupied Donbas and would welcome another option of supply, if such were now possible. At the same time, the blockade encouraged to stop trading with the rebels, including to cease purchasing coal there. The Minister of social policy Andrei Reva said that providers from the occupied territories pay taxes to the budget, that is work in the Ukraine.

The Cabinet warned that if the blockade continues at a pace and will be a complete termination of the supply, then after a month you can start rolling blackouts. Slavic TPP because of the blockade have already switched to emergency mode. The Minister for the temporarily occupied territories and internally displaced persons Vadim Chernysh noted that in different periods of uncontrolled territory provides 10 to 19% of power generation in the country, and during the day, with these companies comes 364 of the car, which transport 24.7 thousand tons of coal.

In connection with the critical situation of the authorities considering the purchase of deficient coal abroad. In particular, negotiations for the supply of 1 million tons of anthracite coal from the United States. However, the Ministry of energy explain that to quickly bring the coal import will not work – period of delivery is 50-60 days. This gap will need something to compensate, and compensation is only possible by reducing the production of electricity. Minister Igor Nasalik said that if Ukraine will enter the foreign markets with the aim to buy 8 million tons of coal, the price in the world can be enhanced by 30-40%. Coal from state mines buy at 1370 UAH (around 50 USD). per ton. From abroad are brought under 100-120 $ per ton.

Coal in world markets have increased significantly in price in the second half of 2016, reaching a peak in November and rising to over $ 100./so Now the price fluctuates at a mark 80 dollars/so plus the cost of shipping.

The cost of coal on the world markets

The reserves of anthracite are available only in several countries, including Russia, Ukraine, China, South Africa, Vietnam, USA, North Korea, South Korea. The last time the situation was saved by the purchase of coal in South Africa (South Africa), there were negotiations with Kazakhstan, however, the anthracite did not arrive. Regarding African coal was a scandal because of its quality and price. At the beginning of 2016 Nasalik said that Ukraine will not buy in South Africa “strange coal”, however, according to the state statistics service, in 2016, the country still continued to purchase it in Africa.

The closest manufacturer of anthracite is Russia, which Ukraine buys most of scarce coal. From Russia last year received products to 906 million dollars. The weighted average price for the year was $ 85./so It 61,78% of the total imported coal. This share is kept for several years, only changed the volume. In 2013, we transferred Russia $ 1.3 billion, which accounted for 65% of all deliveries.

Now on the second place on the supply - USA. In America we have bought in the last year of coal in 212 million dollars (14,46% of all deliveries). In addition, Canada received coal for 94 million dollars (6,43%). The remaining of 17.33% (254,308 million dollars.) import have on Kazakhstan, Poland, South Africa, Australia. Price of 1 ton of coal from South Africa last year amounted to an average of 60 dollars, which is $ 25 cheaper than in Russia and roughly the same as the prices in the domestic market. American coal is more expensive - about $ 112./t, Canada - $ 106./t Australian 109 dollars./t is twice the price of Donbass coal. In neighboring Poland is not much cheaper - $ 99./T.

At the same time, it is the anthracite we only buy in Russia and Africa. Another question, what kind of coal we buy from Russia, because there is the assumption that Ukraine “imported” smuggled out of the Donbass in the Russian Federation fuel.

Purchase is always an additional opportunity to the officials to earn. For example, recently, the media wrote that the state company “Centrenergo” started to buy coal from Russia via Panama, and allegedly bought about 87 thousand tons of a little-known Panamanian company Datoro Corp. Head gasket is usually the profit of more officials, and it is possible to say that not buying from Russia. Now in “Tsentrenergo” they say that one of the sources of diversification of supply would be South Africa and soon will be a visit of the company to discuss long-term contracts for the supply of anthracite. However, the African coal can cause problems. So, in 2014, the GPU began an investigation in connection with the procurement from South Africa. The Agency said the price of coal was too high, and it was not suitable for burning in thermal power plants. Subsequently, the supplier of South Africa refused to sign a new agreement in connection with the audits. In 2015, the purchases were resumed, brought more than 300 thousand tons. And in 2016, came anthracite worth more than $ 18 million.

One of the solutions to the shortage of anthracite is the translation of TPPs to coal gas, but such a translation takes time. Two years ago I raised this issue, but the decision was not made in connection with the stabilization in the energy sector. In the summer of 2016, the Ministry of energy assured that managed to develop a system that enables maneuvering in the generation, gradually bringing her anthracite group and increasing the share of gas coal. In particular we are talking about boilers No. 2 and No. 5 zmiivska TPP. In the case of the continuation of the blockade in the area of the ATO, the authorities remain or to quickly find a supplier of anthracite coal, or use coal gas, otherwise there may be a picture of December 2014, when he introduced graphics rolling blackouts.

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