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Russia's key coal industry on verge of financial collapse

Thursday, 27 June 2024, 18:31
Russia's key coal industry on verge of financial collapse
Stock photo: Getty Images

Profits in Russia's coal mining sector have plummeted by 93% in the first four months of 2024 to just RUB 14.3 billion (roughly US$161.2 million).

Source: Russian newspaper The Moscow Times, citing data from Russia's Federal State Statistics Service

Details: It is noted that less than half of the companies in the industry ended the first four months of 2024 in the black, compared to two-thirds a year ago. Additionally, their total financial result was halved to RUB 72 billion (roughly US$820 million).


The Moscow Times adds that every second company, based on official statistics, became unprofitable (52.4%), with their total losses for the first four months of 2024 reaching RUB 58 billion (roughly US$663.4 million).

Consequently, the coal miners' profit in January-April totalled only RUB 14.3 billion, down almost RUB 200 billion (roughly US$2.2 billion) from the same period a year earlier.

Russia's coal industry is one of the largest raw material industries in the country's economy, spanning over 30 monotowns and employing 650,000 people.


Cut off from Western markets by sanctions, coal companies are rapidly losing customers in countries that the Kremlin calls "friendly". Russian coal exports fell by 13% in the year's first quarter.

India, which accounts for about a third of Russia's coal exports, reduced imports by 22% to 6.76 million tonnes in March-May. Exports to Türkiye, South Korea and Japan plummeted as well.

China, the largest buyer of Russian raw materials, imposed an import duty on coal that does not apply to other suppliers, such as Indonesia and Australia, which are members of the free trade zone with China.

In addition, prices for Russian coal have reached a three-year low: US$95 per tonne in the Far East ports (6% since the beginning of the year), US$72 per tonne in Taman (13%), and only US$61 in the Baltic Sea ports (14%).

The Moscow Times noted that Russia's coal industry is currently in a state of cash gap (when incoming payments are less than expenses), and by the end of the year, its negative cash flow is expected to reach RUB 450 billion (roughly US$5.1 billion).

Additionally, the cost of coal increased by 30% due to rising expenses for imported equipment, railway tariffs, wagon rentals, port transshipment, ship insurance, and loan servicing, all driven by a sharp rise in Russia's Central Bank's key rate.


  • Global fossil fuel consumption rose to a record high last year, pushing emissions to more than 40 gigatons of CO2 for the first time.
  • Russian seaborne coal exports to Asia are falling due to low global prices and high shipping costs.

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