Why Russian coal industry is resistant to the crisis

The continued growth of the industry is the result of the domination of private owners.
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One of the sectors of the Russian economy, the least painful in crisis, is the coal industry. In 2015, coal production increased by 4.5%, reaching 372 million tons, despite the fact that industrial production fell by 3.4% (Rosstat). In the first ten months of 2016, the coal industry has continued to increase (plus 4.9% per annum), while the industry as a whole experienced a stagnation (0.3% growth).

The reason - the stability of demand for Russian coal in foreign markets. In 2015, its exports increased by 0.8% (to 156 million tons - data CDU TEK), and in the first ten months of 2016 - by 8.9% (to 137.2 million tons). Stability is different and the world market: in 2011-2015, global consumption of coal grew from 3.8 billion to 3.84 billion tons BC (BP Statistical Review data).

Due to the higher, compared with oil and gas competition among suppliers of coal costs to consumers fall: for the 2011-2015 biennium. Prices for thermal coal in the European and Asian markets fell in two and a half times - from $ 130 to $ 49 per ton (Ministry of Energy data). This in turn slows down the transition from coal to gas generation in developing countries than use domestic coal mining companies: although exports to China in 2015 was reduced to 10.4 million tonnes, deliveries to the Asia-Pacific as a whole increased by 2.5 million tons (data Ministry of Energy).

Another factor in the well-being of the coal industry - its successful restructuring in the 1990s and the first half of the 2000s.

At the start of the transformation industry was in deep peak: due to the crisis in the economy and falling energy consumption, coal production decreased by half for the 1992-1998 years (from 337 million to 232 million tons, Rosstat). To overcome the recession failed due to monopolization and privatization of the sector: in 1993-2006, the share of private mines in the coal production has increased from 5.5% to 99.9% (hereinafter - agency estimates "Rosinformugol"), with 188 mines were closed and 15 sections. Over the years, it was released more than 200,000 miners and more than half a million workers of social institutions (kindergartens, health centers), since the Soviet times were on the balance of the coal enterprises.

Private players - SUEK, "KRU", "Yuzhny Kuzbass", "JUzhkuzbassugol", "Yakutugol" - managed to enter foreign markets: for the years 1998-2006, exports increased by almost 4-fold - from 24 million to 91.4 million tonnes ( Energy Ministry data), which resulted in a production increase (from 232 million to 311 million tons).

    Over the next few years, coal production maimed by almost a quarter, while exports - more than half. Not least because the industry has not fallen under the nationalization.

This differs from the "oil industry", where over the last decade under the control of state-owned companies hit Yukos assets, "Sibneft", TNK-BP and "Bashneft".

With the increasing presence of the state in many ways was associated decline in the growth rate of oil production - from 8.7% in 2000-2004 to 1.6% in 2005-2009-m, and 1.3% in 2010-2014-m. In 2015, oil production increased by 1.4% (to 534 million tons - data CDU TEK), but was able to achieve this due to new projects of oil majors (for example, production of "Surgutneftegaz" in the Yakutia deposits increased by 9%), moreover, their West Siberian "daughter" in recession "RN-Yuganskneftegaz" has cut production by 3.2%, "LUKOIL - Western Siberia" - 6.1% and "Gazpromneft-NNG" - 1% (official data reporting) . In coming years, the decline in Western Siberia with a high probability of "interrupt" the effect of the implementation of new projects, which will lead to an overall reduction of oil production.

Extraction of the coal will continue to increase: in 2020 it will reach 390 million tons, it follows from the Ministry of Energy forecast. This will be another confirmation of the fact that the key to sustainable growth can only be domination of private owners, who run the risk of his own purse, and therefore invest in profitable projects, rather than buying endless competition and non-core assets.