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China Wants to Buy 100 Million Metric Tons of Coal from Russia

China Wants to Buy 100 Million Metric Tons of Coal from Russia

The governments of China and Russia are developing an agreement that would see Beijing purchase 100 million metric tons of coal from Moscow, the Kremlin announced on Friday.

“[A]n intergovernmental agreement with the People’s Republic of China is being developed, and the figure is 100 mln tonnes [of coal],” Sergey Mochalnikov — the Head of Department of Foreign Economic Cooperation and Fuel Markets Development at the Russian Energy Ministry — told reporters on February 18.

“In the coming years, consumers should receive as much coal as they need,” Mochalnikov said.

“Russian coal exports have very good prospects due to reduced supply on the world market,” Mochalnikov noted on Friday.

Moscow has considered the Asia-Pacific market a “priority export destination” for Russian-produced coal for the past five to six years due to its increased demand for the fuel, Mochalnikov revealed.

“We have good prospects until 2030, and Russia should take its share in this growing market,” he advised.

“[T]he share of Russian coal in the Asia-Pacific market in 2021 was 12 percent,” TASS reported on February 18.

This figure has increased by eight percentage points since 2010, according to the Russian state-owned news agency.

China is suffering from a massive coal shortage that has pressed Beijing to ramp up imports of the fuel from foreign countries, especially Russia, over the past year.

“China imported about 3.7 million tons of thermal coal from Russia in September [2021],” the Consumer News and Business Channel (CNBC) reported in October 2021. “That’s up 28% from August [2021] and more than 230% higher than a year ago.”

The financial news outlet cited customs data accessed through the Chinese financial data firm Wind Information as its source for China’s coal import figures.

“China’s imports of thermal coal from Russia have either doubled or tripled from 2020 levels every month since May [2021],” CNBC further observed. “The monthly figures this year also remain well above pre-pandemic levels in 2019.”

China’s coal shortage is directly tied to the nation’s recent power outages, which have affected several provinces since May 2021. The state electric grid of China is powered largely through coal. A tight supply of the carbon-based fuel within China caused prices of the commodity to spike to record highs last year. The twin developments restricted the amount of coal available to Chinese state power plant operators, forcing both approved and unplanned electricity blackouts nationwide over a period of several months.

“After closing most of their coal mines, China’s northeastern provinces have relied on coal from neighboring provinces or imports from countries such as Russia and Mongolia. In recent months, the provinces faced a power shortage and used power rationing after coal prices jumped to record highs,” China’s state-run Global Times reported of the national energy crisis in November 2021.

China’s State Grid Corp. warned in November 2021 of a “tight balance” between the national power supply and consumer demand through spring 2022.

“The firm said … there could even be power outages as hydropower generation is expected to fall while consumption picks up during the [2021-2022] winter heating season,” Reuters reported at the time.

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