Montel Magazine 3 2022 - Pipeline sabotage 3 - Page 33

“ In past years , Kazakhstan has exported 1-3m tonnes / year to Europe but this year it will be maybe 8-10m tonnes ”
In previous years , much of the country ’ s produce went to Asia but with prices in Europe so attractive , there was “ no reason to export elsewhere ”, he adds .
The Global Coal Des ARA index – a benchmark for physical coal volumes delivered in Europe – has so far this year averaged nearly USD 290 / t , compared with less than USD 100 / t in the same period last year . While such prices are exceedingly attractive for exporters , buyers from countries without an embargo on Russian coal – such as China and Turkey – can buy coal free-on-board from Russian export ports for as little as USD 100-120 / t , thereby undercutting Kazakhstan in some of its former export markets .
“ There are lots of Mickey Mouse companies offering a few tonnes of Kazakh coal now ,” the trader says , adding , however , that the main , trusted suppliers to Europe are Swiss trading firm Telf and producer Shubarkol Premium , based in the Kazakh city of Karaganda .
The former company – which markets coal from its Kazakh partner Shubarkol Komir – appears to have taken on board the benefit of employing traders with experience of Russian ports and logistics , as it recently hired “ a good part of the team ” from the trading arm of Russia ’ s largest coal supplier Suek .
According to sources close to the companies , Suek ’ s decision to relocate its trading activities from Switzerland to Dubai – following the EU ban on Russian coal – resulted in many of the team jumping ship to Telf .
“ Basically , part of the Suek team has joined Telf to strengthen the coal side of the business ,” one source says , noting he could not comment on numbers . But former Suek chief commercial officer Igor Gribanovsky was one of the number , taking up the position of head of coal trading and freight .
Montel Magazine 3 – 2022
A head coal trader with a Polish trading firm says he is receiving up to three offers for Kazakh coal a day . “ But they do not necessarily have any direct link to [ Kazakh coal miners ],” he says , adding Polish buyers were not keen on Kazakh coal due to its use of Russian logistics infrastructure . “ If you are using Russian ports , you are using Russian services , and we will not use Russian services ,” he says .
There are also concerns that Russian coal could become mixed – accidentally or otherwise – with Kazakh coal , then shipped to Europe , but some market participants dismissed this possibility . “ There are strict rules about certification , but also it would be a great risk for a seller to take , maybe ruining their reputation for short-term profit ,” says the Switzerland-based trader .
Ethical arguments aside , the EU has even relaxed some sanctions on Russian coal , although not for export to Europe . Under rules revised on 19 September , EU-based operators can support the transport and finance of Russian coal , as long as it is shipped to non-EU member countries . The EU justified the decision by noting it was “ committed to avoiding ” any impact from its sanctions on food and energy security for less developed countries .
“ This will allow volumes to flow into Turkey , China , India and other emerging countries , while freeing up some other tonnes from Colombia , the US and South Africa to be delivered into Europe ,” says an analyst with a European energy firm . This stance would ease some of the “ heavy tightness seen in the [ higher-grade ] segment ”, the analyst adds .
So while some concerns remain , and many buyers will continue to unilaterally shun any coal loaded at a Russian port , Kazakh coal remains a legally viable option for Europe and one likely to play an increasing role in fuelling the region ’ s power stations . n 33