President Vladimir Putin has approved a package of emergency measures to support Russia’s coal industry, which is facing severe financial strain due to sanctions, declining prices, and transportation challenges, Russian media reported Wednesday.
The coal sector posted losses of 112.6 billion rubles ($1.4 billion) in 2024. Coal exports also dropped for the third straight year, falling 8% to 195.9 million metric tons. Several coal companies have already shut down production due to rising costs and shrinking profit margins.
“The crisis in the coal industry has become so severe that entire production facilities are being forced to shut down,” Deputy Energy Minister Dmitry Islamov told lawmakers during a State Duma energy committee hearing.
Islamov confirmed that Putin had signed off on the Energy Ministry’s plan, but warned that major efforts are still needed. “The situation with prices, exports and tariffs is still very challenging,” he said.
In an April 25 letter to Putin, Deputy Prime Minister Alexander Novak outlined the urgent need for expanded support beyond existing measures. These currently include export guarantees for the Kemerovo region and rail fee discounts. Novak warned that about 30 coal companies, which produce 30 million metric tons annually, are at risk of bankruptcy.
He proposed restructuring viable companies through state development bank VEB and handling failed firms through a special bankruptcy process also managed by VEB.
Novak’s recommendations included a 60% discount on long-distance rail fees and a 10.5% discount on export-related transportation fees through the end of 2025. He also suggested a 12.8% discount for coal shipments to western and southern ports this year.
To boost stability, Novak called for guaranteed export agreements for the Khakassia region, which borders Kemerovo, one of Russia’s key coal hubs. To offset the cost of these transportation discounts, he recommended federal subsidies for Russian Railways.
Putin had already issued an order in December to support the industry, following reports that nearly half of Russia’s coal companies were unprofitable. He reportedly approved Novak’s expanded proposals in writing on May 7.
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