Russia’s Coal Industry Crisis Deepens: 51 Mines Face Closure Amid $1.3B Losses

The situation in Russia's coal industry continues to deteriorate, with 51 enterprises now either shut down or on the verge of closure, according to RIA Novosti, citing Russian Deputy Energy Minister Dmitry Islamov, on July 15.

“By the end of 2024, losses had reached approximately $1.3 billion, and unfortunately, the situation keeps getting worse. According to the Ministry of Energy, 51 enterprises — meaning mines and open-pit sites — are currently in the so-called red zone, which includes those that have stopped operating or are close to shutdown,” he said.

Due to the alarming situation, the Russian government approved a series of anti-crisis measures at the end of May. These include deferring the payment of mineral extraction taxes and insurance contributions until December 1, as well as allowing debt restructuring for companies with high levels of indebtedness.

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In addition to these general measures, the Russian government has introduced targeted support. Enterprises in Siberia can receive compensation for part of the tariff costs associated with exporting coal to the northwest and south of the country, and some companies are being granted subsidies to cover logistical expenses for long-distance routes.

Earlier, it was reported that Russia’s banking sector is under growing strain, with the real extent of the crisis likely far worse than the Kremlin is willing to acknowledge,

Behind closed doors, financial officials are warning about a surge in overdue debt from both corporate borrowers and individual clients. Soaring interest rates are making loan repayments increasingly unaffordable, while deferred payments are concealing the true scale of defaults.

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