Coal production is one of the key industries in four of the Eurasian Development Bank’s (EDB) member countries — Kazakhstan, Russia, Kyrgyzstan, and Tajikistan, with the coal output in these countries standing at 103, 385, 1.8 and 1.4 million tons respectively in 2016, according to the EDB Strategic and Industrial Research Department’s review titled “Coal Industry in EDB Countries”.
In the first six months of 2017, the situation in the sector developed positively for all these countries suggesting high investment attractiveness of the region’s coal industry in the medium term. The longer-term prospects are significantly less certain, although coal remains a strategically important source of energy, which will be difficult to substitute completely for a rather long period of time, especially in countries that don’t have their own considerable reserves of energy carriers, such as Kyrgyzstan and Tajikistan, the report said.
After a lengthy decline, Kazakhstan’s coal sector began to grow, having improved output by 17.4% (to 52.6 million tons) in the first six months of 2017, compared year-on-year. Until 2030, considering limited export enhancement prospects, domestic coal-fired heat and power plants are expected to remain the main source of demand for energy coal. Given the planned decommissioning of generating facilities, the demand for energy coal should at least remain the same. However, since the country’s deposits produce mainly coals with relatively high ash content, the future of the sector will depend on the advancement of high-tech coal businesses and the finding of new growth points.
In the first six months of 2017, coal production in Kyrgyzstan gradually recovered growth: after a 7% cut in 2016, the aggregate output in January-June 2017 increased by 0.8% (to 591,000 tons). In the medium term, despite the existing constraints, production is expected to grow further while imports should go down. An important factor enhancing the use of coal in the country will be the completion of the upgrade at the Bishkek combined heat and power plant, which is one of the key consumers of coal. This raw material may remain a strategically important source of energy for the economy in the longer run as well.
Tajikistan has activated its coal reserve developments since 2012 when natural gas supplies from Uzbekistan began to shrink. The average annual growth in 2012-2016 approximated 44%. The rate for the first six months of 2017 was 20.6% (to 541,000 tons). In the medium term, the government intends to enhance outputs significantly to meet the domestic demand and export coal and its products abroad, the report said.
Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. EDB’s charter capital totals US $7 billion. The member states of the Bank are Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia, and Tajikistan.