Since the beginning of the year, the Pljeval company has sold 1.18 million tons of coal of various types and qualities. 83.9 percent was delivered to the thermal power plant, and 1.6 percent was exported to Serbia
The Pljevlja coal mine made a profit of 3.5 million euros in eight months, and they expect that by the end of the year it will only grow if the Thermal Power Plant Pljevlja operates according to the planned dynamics and without new stoppages, the company announced to “Vijesti” when asked about how are in business this year.
“The business result for the first six months of 2022 is a profit of 53,770 euros and is at the level of the previous year’s results. The reason for the low result is the fact that the regular annual overhaul of the Thermal Power Plant Pljevlja (TEP) is carried out in the first half of the year and that the production results are regularly weaker in the first half of the year due to the winter months. Let us remind you that the overhaul of the TEP lasted from April 23 to June 17, and during that period we did not deliver coal to our largest customer. Immediately after the completion of the overhaul, the delivery of coal to TEP was re-established, thus, on August 31, the business result amounted to 3,500,176 euros. By the end of the year, this result will have a positive growth trend if TEP operates according to the planned dynamics”, they stated in the response from this company.
Where to with coal when TE is on hiatus for six to eight months?
In the period from January 1 to September 30, the Mine sold a total of 1.18 million tons of coal, of which it delivered 990,074 tons of coal to Termoelektrana Pljevlja, which is part of the Electric Power Industry of Montenegro (EPCG) in a total value of 27.5 million (27,487 .200) euros. That is, 83.9 percent of the total sold coal is related to TEP.
173,343 tons of coal, which is 14.5 percent of the total amount sold, were sold to customers from the consumer sector, worth 8.5 million euros (8,523,401).
For Elektroprivreda Srbije (EPS), 16,213 tons (which is 1.6 percent of total sales) worth 506,604 euros were exported.
“Our company has sufficient quantities of coal for both EPCG and EPS. However, in view of the upcoming works on the environmental reconstruction of the Pljevlja Thermal Power Plant, when we will not be able to deliver coal to our main customer (EPCG) for a period of 6 to 8 months, we are forced to look for new customers on the market”, stated the Pljevlja Rudnik Ulja.
According to earlier leases from EPCG and the reconstruction plan, TEP will suspend operations for a period of six to eight months during 2024.
“Vijesti” asked on what basis the prices of coal for different customers are determined, and how the price at which they sell coal to EPS was determined, as well as whether since the signing of the contract on the sale of coal to this customer there has been an increase in prices on the stock market and that will it affect the growth of the sales price in the following period.
EPS will increase prices for the next contract
“The contract for the sale of brown lignite coal to EPS was signed on May 20 of this year. The contract envisages the sale of 40,000 tons of coal. Coal prices are determined according to thermal power in relation to coals sold for general consumption. Thus, for coal with a thermal power of 10,000 kilojoules per kilogram (kj/kg), we had a defined price of 36 euros per ton, so based on it, we derived a price of 28.80 euros per ton for coal with a thermal power of 8,000 kj/kg. In the meantime, due to the big energy crisis, there was an increase in the price of coal on the market, which will certainly affect the increase in the price of coal for EPS in the next contract”, they stated from Rudnik.
Answering the question at what price does Rudnik uljja sell coal to EPCG, and at what price to EPS, which is why there are these differences, Rudnik said that they sell coal with more calories to EPCG at a lower price, than coal with higher calorific value is sold to EPS- in.
“The coal mine sells EPCG coal with an average calorific value of 9,211 kj/kg for 27 euros per ton, while the other prices are weighted in proportion to the quality and thermal power of the coal. On the other hand, as we have pointed out, coal for an average calorific value of 8,000 kj/kg is sold to EPS for 28.80 euros per ton. So, we repeat, we derived the price for EPS as a price for the consumer market”, they stated from this company.
“Vijesti” also asked whether it is true that EPS buys coal in Bosnia and Herzegovina (BiH) at much higher prices than from the Pljeval mine, as well as whether it depends on some other conditions – type of coal, quality, costs transportation…
“When it comes to the prices at which EPS buys coal in Bosnia and Herzegovina, that is not an issue for us. What we know is that predominantly brown coal is imported from Bosnia and Herzegovina, and its price is significantly higher than the coal we sell, because it is a matter of absolutely different calorific values of coal that define the final price”, said Rudnik from Pljevlja.
Out of 990 thousand tons, only 16 thousand were sold to Serbia, because there is no railroad
Despite several decades of announcements of the construction of the railway line from Bijelo Polje to Pljevlje, as well as its inclusion in the Railway Development Strategy in Montenegro since 2017, this project is not included in the Traffic Development Strategy in Montenegro for the period from 2019 to 2035, which was drawn up adopted in 2019.
That is why Pljevlja’s biggest resource – coal – is exported to the market by trucks, instead of by rail, which is the usual and cheapest way of transporting that energy. This situation prevents the export of significant quantities of coal and increases its price, i.e. reduces the earnings of the Mine.
Only 16,213 tons of coal were exported for EPS by the end of September, while 990 tons of coal were sold to EPCG and other domestic consumers. That is, only 1.6 percent of the total sold coal was exported for EPS.
And this amount of export was carried out in such a way that the coal is loaded onto trucks in Pljevlje and driven 40 kilometers across the border to the freight railway station in Prijepolje, where it is loaded into wagons.
“The costs of transporting coal to Prijepolje are borne by EPS. Transportation with loading is 8.88 euros per ton. The prices were obtained as a result of the most favorable offer received after a public call for the procurement of coal transportation and loading services on the route Pljevlja – Prijepolje”, Rudnik stated.
EPS regularly pays for agreed and contracted quantities
From Rudnik, they state that EPS regularly pays for delivered coal according to contractual obligations and reconciliation of minutes on the quality and quantities of coal loaded in Prijepolje.
“EPS regularly pays the delivered coal to our company. So, to repeat, after the coal has been transported to Prijepolje, it is loaded into wagons that further deliver it to Svilajnac and Obrenovac. Bearing in mind that we keep accurate records of the exported quantities and quality of coal that is transported by trucks to Prijepolje, EPS also receives coal. After the agreed records for both parameters (quantity and quality of coal), EPS regularly pays its contractual obligations to us. Therefore, we have no claims from them every time we reconcile the minutes”, they stated from Rudnik, Vijesti writes.