Reuters reported that a turbine room flood on August 17th at Russia largest hydropower plant in Siberia will increase coal burn by up to 2 million tonnes a month and reduce coal exports.

One of the country largest coal sellers said "It's too early to say exactly how much exports could fall. Maybe not by too much, but there will be some effect. The company said repairs will cost billions of rubles and take several months.”

Russia exports around 64 million tonnes of thermal coal used in power generation per year by sea plus further tonnages of coking coal for steel-making.

Coal fired power provides vital base load electricity supply across Russia. Coal plants mostly fuelled by lignite coal which is not exported tend to run at full capacity only through the autumn and winter.

Exporters said most of the extra 2 million tonnes a month of coal needed will be lignite but around 500,000 tonnes to 600,000 tonnes is likely to be steam coal which could be exported.

Domestic prices for steam coal have been higher than equivalent export levels throughout 2009. The extra need for coal is likely to push domestic prices still higher.

Exporters said exporters who can place more coal domestically rather than into the depressed European market will do so.

(Sourced from Reuters)