Russian Coal Sector Faces Deepening Crisis Amid Heavy Losses and Shrinking Exports

Russian coal industry is grappling with mounting financial distress, posting over $875 million in losses in Q1 2025 alone, according to Deputy Energy Minister Dmitry Islamov. Since 2022, the sector has shed nearly $30 billion due to Western sanctions, surging rail tariffs, and increased fiscal burdens. In 2024, losses totaled $1.6 billion as companies struggled with weak global coal prices, logistical bottlenecks, and a stronger ruble. Currently, 64% of Kuzbass miners are operating at a loss, with dozens of firms nearing bankruptcy. Without urgent state support, production could fall nearly 10% year-on-year in 2025, while exports may drop by 15%. Despite government interventions—including rail tariff discounts and tax breaks—coal deliveries to western and southern ports remain largely unprofitable. While authorities argue that strong shipment volumes reflect resilience, market players warn these flows are driven by loss-making obligations rather than sustainable demand.