The Republic of Tuva and the State of Russian Coal Exports

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Mar. 14 – Russia’s US$8 billion investment into Siberia to develop the Tyva Ulug-Khem Coal Basin, estimated to have 2.5 times more reserves than the Mongolian Tavan Tolgoi field, could double the country’s metallurgical coal exports by 2020.

“Annual coal production in Tyva may reach 40 million metric tons in 2020 should all the companies implement the announced plans in full,” Dmitry Sakhno, project manager at OAO Severstal, Russia’s second- largest steel producer, said in an interview with Bloomberg.

At the same time, according to Sakhno, the delays by some of the mining companies as well as complexity’s of developing the region may curb production by 2020 to 15 million to 20 million tons.

Four Russian companies, in particular OAO Severstal, Evraz Plc, En+ Group and shareholders of Russian Copper Co. are planning mines and a state-backed railroad in the Siberian region of Tyva. Those companies have bought licenses for coal deposits in the Tyva region since 2008.

The 250 mile railroad, partly funded by the state, will link Tyva to the Trans-Siberian railroad as early as 2015 and allow the transportation of coal from the Ulug-Khem Basin, which contains 16 billion metric tons of coal reserves, according to data provided by Severstal.

Currently, Tyva is connected with Russia, more specifically to its Krasnoyarsk Territory, by only two highways.

“Tyva will be the first new coal basin developed in Russia in at least 50 years,” said Andrei Churin, head of coal business at En+ Group, a natural resources holding company and the world’s largest aluminum producer.

Coal from Tyva may be shipped to China, South Korea, Japan and Southeast Asia by railroad or by sea from harbors in Far Eastern Russia, Churin said.

According to Dmitry Sakhno, “more than half of the Ulug-Khem Coal Basin’s coal will be exported.”

Russia produced 64.7 million tons of the type of coal used by steelmakers last year and exported 14.2 million, Ministry of Trade and Economic Development data shows.

China, which accounts for half of global steel output, is the major customer for metallurgical coal. Chinese demand for the raw material may increase to 65 million tons by 2014 from about 40 million tons last year, according to IHS McCloskey.

The Republic of Tuva (Tyva) is situated in the central part of the Asian continent, bounded by Russia’s Eastern Siberia on the north, and Mongolia on the south and east.

Tannu Tuva, a successor of the modern Tuva Republic of Russia, historically was part of Mongolia and the Qing Empire, and became to be the satellite state of Imperial Russia in 1914. In 1944, it was annexed to the Soviet Union.

The most important minerals produced in the republic are nonferrous and rare metal ores, coal, asbestos, iron ore, gold, mercury, and building materials.

The depths of the Tuvan lands are a natural storehouse of almost every kind of mineral. The best known deposits are Tardanskoe (gold ore), Ulug-Tanzekskoe (tantalum-niobium), Terligkhaiskoe (mercury), Tastygskoe (lithium), Kyzyl-Tashtygskoe (lead-zinc), Ak-Dovurakskoe (chrysotile asbestos), and Khovu-Aksynskoe (nickel-cobalt). In one gold deposit alone there are reserves of about 200 tons.

Agriculture, particularly livestock herding, is the main economic sector in Tyva. The mining, light manufacturing, food, and building material industries are also developed. These industries annually produce more than 76,000 tons of asbestos, 20 million bricks, 55,000 cubic meters of lumber, about 50,000 tons of food products, and about 1 million tons of coal.

The population of the republic is 309,100 people. The capital of Tuva is Kyzyl, which has a population of 84,600.

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