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Asia’s New Coal Boom: Russia & China Agree To Develop Vast Siberian Coal Fields

Leonid Homeriki, David Miller, Russia Beyond the Headlines

Rostech, the Russian state-controlled technology and defense concern targeted by Western sanctions, signed an agreement with China’s Shenhua Group, the largest producer of coal in the world, to explore and develop coal deposits in Russia’s Siberia and Far East.

The total cost of the project, including the construction of coal-fired power plants that will sell electricity in Russia, China and other Asian countries, will be $8-10 billion, Rostech said in a statement posted on its web site.

Moscow-based Rostech controls a vast network of hi-tech operations in both the civil and defense sectors, including the company that manufactures Russia’s famous Kalashnikov rifle. The firm is named among the targets of U.S. and European Union sanctions, which aim to limit the company’s access to western financial markets.

The Rostech-Shenhua deal comes at a time of greater cooperation between Russia and China in the energy sphere, spurred on by increasingly difficult relations between Russia and Western countries. In May, Russian natural gas exporter Gazprom and China National Petroleum Corporation (CNPC) ended years of negotiations and inked a historic 30-year agreement worth $400 billion to deliver gas to China. […]

Coal reserves at the mine are estimated to be 1.6 billion metric tons. Rostech expects coal production to start in 2019 with an annual output reaching 30 million tons. The commodity will be largely exported to the Asia-Pacific Region, especially China.

Rostech and Shenhua also plan to build a marine coal terminal at Port Vera in the Primorsky Territory with annual capacity of 20 million tons. The construction is slated to begin in 2015 and Port Vera will be put into operation in 2018 – 2019.

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