Russian government is ready to allocate 6 billion rubles to compensate for the 12.8% discount for rail transportation of coal to ports located in the North-West and South.
However, this amount covers only a third of the necessary 0.2 billion USD to bring exports into the zone of zero profitability (153 mio USD for the North-Western direction and 63 mio USD for the Southern direction).
Meanwhile, market participants doubt the effectiveness of the measure, as cargo traffic in the south is limited by infrastructure capacities, and exports through ports of the North-West are unreasonable due to high freight rates in the direction of Asia-Pacific countries, where Russian coal companies’ shipments have been redirected.
At the same time, Khakassia companies will receive priority, but each enterprise will be considered individually and the amount of support will be determined depending on its financial condition. In order to receive state support, companies will have to confirm their unprofitability, debt burden and EBITDA.
Source: CCA Analysis
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