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Russia’s Coal Industry Faces Historic Collapse—Mines Shut in Kuzbass, Its Main Producing Region
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Russia’s coal industry, a cornerstone of the country’s raw-material sector and a major employer in single-industry towns, is collapsing under economic pressure, The Moscow Times reported on August 28.
In the first half of 2025, Russian coal companies posted a combined loss of 2.3$ billion, with 66% of firms operating in the red, according to Rosstat. On average, the sector lost more than 12.4$ million per day. The losses already surpass the entire deficit from 2024, signaling a 2500%, or a 26-fold increase year-on-year.
“Negative factors for the Russian coal sector include falling global prices for thermal coal, down to $64–83 per ton, and a stronger ruble, which has reduced mining profitability,” experts at the Gaidar Institute said.
The Kuzbass region, responsible for about 60% of Russia’s hard coal and 80% of its coking coal, has seen 17 mines close, some permanently. According to the Russian Ministry of Energy, 27 more companies are on the brink of bankruptcy.
“Some coal companies are doomed to extinction,” warned Stanislav Mitrakhovich, an energy expert. “Even though global demand for coal is growing, it is only mined where extraction is profitable. In Russia, both mining and transportation are expensive,” The Moscow Times writes.
Sanctions have compounded the crisis. China became Russia’s key coal market, but has cut imports by 25% in the first half of 2025 and 34% in the second quarter. Unable to sell coal, production fell 7% from January through July, with major producers like Mechel reporting declines of up to 24%.
To avert social unrest among miners, the Russian government has temporarily suspended mining taxes and social contributions until November, but analysts warn this only treats symptoms. “Without changes to global coal prices, Russian coal companies’ problems will not disappear,” said Alexander Kotov, a partner at NEFT Research.
Over the past 20 years, Kuzbass has lost nearly 300 coal enterprises, with labor disputes and unpaid wages fueling unrest. With falling exports, rising costs, and limited domestic demand, the Russian coal industry faces a bleak future, The Moscow Times stated.
Previously, it was reported that 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.
