Main points
- The Russian coal industry is in deep crisis, with 62 enterprises in the “red zone”, 20 of which have suspended production.
- Russia's coal industry is expected to lose more than 1 trillion rubles by 2026 due to sanctions, loss of export markets, and reduced imports from China.
Critical industry could suffer losses of 600 billion / Collage of Channel 24, photo Getty Images, Russian media
Russia's coal industry, which provides the lion's share of the country's budget, continues to plunge into its biggest crisis since the 1990s. In particular, the government has warned of the threat of collapse for more than 60 coal companies.
Why did the crisis hit Russia's coal industry?
The number of unprofitable coal companies in the country is rapidly growing: currently, 62 enterprises are in the “red zone”, of which 20 have already suspended production, and 14 have decided to liquidate or conserve, writes The Moscow Times.
According to the results of last year, coal miners suffered a loss of 408 billion rubles – a record in the history of the industry. Three out of four enterprises in the industry closed the year in the red:
- This year, the situation for coal miners will worsen: the government predicts that the industry's losses will increase by another 41%, to 576 billion rubles.
- As a result, the coal industry will lose more than 1 trillion in cumulative losses from 2024 to 2026.
The crisis in the coal industry will continue, and “everyone will have to tighten their belts,” says Yevgeny Kharlampenkov, associate professor of the Department of KemSMU, economist. Due to sanctions, coal miners have lost export markets, high interest rates have created a debt crisis, and the strong ruble has hit revenue. Also, China, which has become a key buyer of Russian coal, is reducing imports for the third year in a row.
In the main coal-mining region – Kemerovo Oblast – 80% of companies in the industry became unprofitable, and a hole of 15% of their own revenues appeared in the local budget.
How does the coal crisis in Russia affect the war in Ukraine?
The crisis in the Russian coal industry is affecting the war in Ukraine. The destabilization of railway logistics and economic problems in some cities of the Russian Federation may have an effect. Energy expert Andriy Zakrevsky said this in a commentary for Channel 24 .
The coal industry employs over 140,000 people in Russia, but layoffs continue due to the crisis. In the first half of 2025, about 19,000 workers were laid off, according to consulting company NEFT Research.
According to expert Andriy Zakrevsky, the economic decline in Russia's mono-industry cities, dominated by the coal industry, could lead to a reorientation of people looking for work in the military sphere .
Andriy Zakrevskyi
Deputy Director of the Energy and Natural Resources Association of Ukraine
The problems there are not only in big cities like Kemerovo, but also in small mining administrations. This is a problem. These people, not knowing what to do, where will they go? They will go to war.
At the same time, the expert also highlights the positive effect of the coal crisis on the military situation in Ukraine. The workload of Russian railways, especially in the Far East, depends on this industry.
One of the positive effects of the war in Ukraine is that coal has made logistics unstable in the Far East and Siberia. I don't know what they will do with the financing of Russian railways. In addition to the loss of mono-city towns, deliveries to industrial enterprises that were hidden in the Ural Mountains are also being lost,
– says Andriy Zakrevsky.
Problems of industry in Russia
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Russia's metallurgy industry is on the brink of crisis due to falling domestic demand and limited export revenues. The industry is under pressure from a high key rate and a strong ruble.
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For example, one of the industry giants, Magnitogorsk Metallurgical Combine (MMK), was 70-80% loaded in 2025 and ultimately suffered a net loss of almost 15 billion rubles.
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Russia's Rusal reported a record loss of $455 million in 2025. The company's net loss was recorded despite total revenue growing by 22.6% to $14.8 billion.
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“Pipe Metallurgical Company” has stopped operating one pipe rolling shop at the Pervouralsk New Pipe Plant. The reason is low demand for this product in Russia and, as a result, a drop in sales.