FT: full-scale war has led to unprecedented crisis in Russia's coal industry
Photo: EPA / Maxim Shipenkov

Russia's coal sector suffered a 225 billion ruble ($2.8 billion) loss in the first seven months of 2025, double the amount for all of 2024. This is in stark contrast to 2023, when the industry generated almost 375 billion rubles ($4.6 billion) in profits, the newspaper reported on Monday. Financial Times .

Already 23 coal companies have closed, 53 more are on the verge of bankruptcy.

"The war is bad for most Russian businesses, if not all. But the coal sector is in a really deep hole," one of Russia's top businessmen admitted in a conversation with the Financial Times.

Russian Coal CEO Vladimir Korotin said earlier this year that "the coal industry is experiencing the most severe crisis since the 1990s.".

Although coal does not play the same role in the Russian economy as oil and gas (less than 1% of Russia's GDP), the industry accounts for more than 140,000 jobs. It remains critical for some regions, including the Kemerovo region (Kuzbass).

International sanctions have forced Russia to sell coal at discounts of up to 20% from already low world prices, and railroad transportation costs have risen from 50% to almost 90% of the price of coal due to congestion on the tracks.

Russian producers "will continue to export at low margins or even at a loss, as production cuts will limit access to hard currency, which is a priority for Moscow, and create risks of social repercussions in mining regions," said Kpler analyst Firat Ergeni.

The situation in the temporarily occupied Donbas is particularly difficult.

"The Donbas mining industry is old and heavily dependent on state support from Ukraine, with subsidies reaching about $1 billion a year," explained Pavlo Kukhta, former deputy minister of economy. When Russia seized the region, the subsidies disappeared, "and now the industry is collapsing," Kukhta added .