Russia to extend suspension of coal export duty till 1 Dec'24

SXCoal: The Russian government has decided to extend the duty-free period for exporting thermal coal and anthracite by three months, pushing the deadline to 1 December 2024, according to sources cited by SXcoal.

Initially, the Russian government had removed the coal export duty at the end of December 2023. To compensate for the lost revenue, the finance ministry had proposed a flat surcharge of 380 rubles per tonne ($4.15/t) on the mineral extraction tax for coal. The export duty was reinstated on 1 March 2024, intended to remain in effect until 28 February 2025. However, the duty on thermal coal and anthracite was suspended again in May, effective from 1 May to 31 August.

The present extension aims to support thermal coal producers who are facing difficulties due to sanctions and rising logistics costs, sources said.

Russian suppliers are grappling with increased logistics expenses and increased railway inefficiency. Even though port capacity is sufficient, exporters face challenges in the Asian market after redirecting supplies due to limited railway capacity along the Far East route. Exports through southern, Baltic, and northern ports have neared the break-even point amid falling coal prices in 2024.

Other challenges include prolonged idle times for railcars, especially at border crossings, staff shortages, and deteriorating infrastructure.

This article has been written in accordance with an article exchange agreement between SXCoal and BigMint.