Kolmar shuts down two plants due to excess coal, third operating at 50% capacity - authorities

YAKUTSK. April 15 (Interfax) - Kolmar Coal Mining Company (Kolmar) has shut down two coal preparation plants and has another one operating at only 50% of capacity because of excess coal inventories due to the congestion of railway lines, the Yakutia government's press service said.

Yakutia First Deputy Prime Minister Dzhulustan Borisov reported on the situation with coal shipments at a meeting of the Russian State Council's Energy Commission chaired by Kremlin aide and State Council Secretary Igor Levitin and Kemerovo Region Governor Sergei Tsivilev.

Borisov said there is a serious issue with approval and acceptance of Kolmar freight in the direction of terminals in the Vanino-Sovgavan hub, to its own port of VaninoTransUgol.

"This situation has led to the accumulation of higher than normal inventories of coal in storage in the amount of about 1 million tonnes, to the shutdown of two preparation plants since March 12 and the operation of one preparation plant at 50% of capacity," Borisov was quoted as saying in the press release.

He said Kolmar needs to ship 573,000 tonnes of coal in April, but Russian Railways (RZD) has so far agreed to the shipment of only 428,000 tonnes or 75%.

Tsivilev said the situation in the coal industry is difficult, and the drop in world coal prices, restrictions on coal shipments by railway and changes in customs regulation are having a negative impact on budgets in coal mining regions.

Deputy Prime Minister Yury Trutnev, who is also the presidential envoy to the Far East, held a meeting on April 2 on the state and outlook of freight shipments by railway in Russia's Far East Federal District. It was said at this meeting that the main arteries that connect the Far East to the central part of Russia - the Baikal-Amur Mainline (BAM) and Trans-Siberian Railway are very congested, but that coal needs to be shipped out in order to avoid the shutdown of production facilities.

The Yakutia authorities said that Kolmar was having problems shipping coal because of the railway congestion. The company said that "due to repair work in the direction of the VaninoTransUgol port, alternative logistics routes will be determined for freight delivery through other seaports in the Far East."

Kolmar plans to mine 13.5 million tonnes of coal in 2024, including 5.4 million tonnes at its Denisovsky mine and 8.1 million tonnes at its Inaglinsky mine.