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The Russian coal industry is on the brink of collapse as global coal prices remain low. Falling exports and declining revenues have prompted the Russian government to take action. The state development corporation VEB.RF is prepared to assume control of bankrupt assets, Newsweek reports.
Isaac Levy from the Center for Research on Energy and Clean Air (CREA) explained that sanctions against Russia and reduced sales to China have severely impacted the coal sector.
Although coal contributes less to Russia’s GDP compared to oil and gas, it remains vital for dozens of mono-profile cities reliant on the industry. Sanctions and efforts by China and India to diversify suppliers have further exacerbated Russia’s coal crisis.
In 2024, Russia’s seaborne coal export revenues fell 22% to $24.9 billion, down from $32.2 billion in 2023. Export volumes also dropped 15%, with shipments to China decreasing by 20% to 16 million tonnes and to South Korea by 35% to 8.4 million tonnes.
Kommersant reported that all Russian coal companies incurred losses in 2024. Many smaller companies are expected to collapse under debt this year. Thermal coal prices have remained below $35 per ton, barely covering production costs. Only metallurgical coal producers and large exporters with their own logistics networks are expected to survive.
From January to September 2024, Russia’s coal industry suffered losses totaling 91 billion rubles ($1 billion), with nearly half of enterprises operating at a loss.
Deputy Prime Minister Alexander Novak is set to review an industry assessment as the government considers sector-wide bankruptcies.
“Russia is losing out because its coal is too expensive, and new sanctions could make exports even less attractive to China this year, further pressuring the industry in 2025,” mining.com reported.
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