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Regulating Coal Market: Increased Trading Leads to Cheaper Prices for Kazakh Consumers

in Economy / Kazakhstan - by


The territorial departments of the Agency for Protection and Development of Competition have presented an analysis of the competitive environment in the coal retail market for the year 2022 and the first half of 2023.

The main conclusion drawn was that the increase in trading on exchange platforms has allowed for the reduction of intermediaries, ensuring Kazakh citizens access to cheaper coal without markups.

According to the Agency, end consumers purchase communal coal from regional coal operators who possess the necessary infrastructure on a property right or other legal basis (railway sidings, storage facilities, etc.). These operators acquire coal either directly from producers (coal mines) or from coal traders who engage in resale without having the required infrastructure.

To eliminate intermediary schemes and provide coal sidings with free access to coal mining enterprises, the mandatory volume of coal for exchange trading was increased from 10% to 50% in 2021, covering consumer demand.

The Agency also announced that in 2024, a set of measures will be implemented to enhance coal exchange trading, including stricter requirements for exchanges and trading access.

Furthermore, an analysis of the competition in the wholesale coal market will be conducted to identify holders of key capacities and regulate coal sales (outside exchanges) to qualified suppliers.

The Agency believes that these measures will help stabilize the prices of communal coal, reduce intermediary schemes, increase the number of coal suppliers, and enhance competition among them.