Coal competition program launched in Kazakhstan
A program aimed at promoting competition in the coal market has been established by Kazakhstan. The Agency for the Protection and Development of Competition has proposed a ban on the sale of solid fuels between intermediaries who do not have their own storage facilities and deposits. The agency will also establish requirements for raw material suppliers, with entrepreneurs being required to own fuel storage infrastructure starting from autumn 2023.
To reduce the level of monopolization in the primary wholesale sale of coal, forced joint use of large deposits by plots will be introduced. Ownership of contract areas will be reviewed, and some areas will be transferred to alternative market players after the auction. Transactions for obtaining licenses for subsoil use will be coordinated with the antimonopoly authority. These measures will be implemented in 2023-2024.
The agency has stated that from June of this year, 90% of the coal used for household needs of the population will be sold on the exchange under long-term contracts, with the remaining 10% sold under short-term contracts through spot trading. This move is expected to reduce volatility and fix the cost of fuel for the year.
Finally, the transportation of municipal coal purchased by regional operators on the exchange will be allocated on a priority basis.