A little over three weeks ago, we flashed the warning light on the Russian coal industry, outlining that the drop in production combined with the inability to export and an increasingly catastrophic countrywide credit situation would lead to mass layoffs.
And now it’s happening.
The unraveling of Russia’s coal industry is accelerating, with three more major open-pit coal mines in the Kuzbass region — Sibcoal Management Company, Razrez Zadubrovsky Novy, and Razrez Evtinsky Novy — shutting down operations indefinitely as the sector faces what appears to be an existential crisis.
The Kemerovo Region’s Department of Information Policy confirmed the closures, citing “stabilization of the coal industry” as a precondition for resuming operations — a statement that offers little comfort to the thousands of workers being laid off amid worsening market conditions and mounting financial woes.
Mass Layoffs as the Coal Industry Implodes
The collapse isn’t just confined to idle machinery. Human cost is mounting, with over 1000 workers already receiving layoff notices in the past week. Industry insiders hint at more layoffs in the coming weeks.
Contrary to the government line boasting 3,000 available coal-sector jobs, those “positions” seem like cold comfort when entire mines are ceasing production, as disparity between reality on the ground and messaging from Moscow is increasingly at odds.
Debt-Fueled Decline: The Sibcoal Saga
Sibcoal’s downfall reads like a cautionary tale of over-leveraged ambitions and reckless management. After narrowly escaping bankruptcy in 2019 with a last-minute creditor deal, the company faced another bankruptcy filing this August over unpaid tax debts of 8.3 million rubles. Court hearings were postponed as both sides claimed they were seeking a “peaceful settlement,” though industry watchers see this as a desperate attempt to delay the inevitable.
Despite once targeting an annual output of 535,000 tons of coal, Sibcoal stopped disclosing production results years ago, leaving analysts to speculate about its real financial health. In 2023, it reported 192 million rubles in revenue, only to post a staggering 187 million ruble net loss—a thinly veiled sign of impending collapse.
Corporate Meltdown: A Legacy of Deals Gone Wrong
The story gets darker with Razrez Zadubrovsky Novy and Razrez Evtinsky Novy. These mines were sold in 2015 by Russian Coal Group to businessman Alexander Netsvetaev. After Netsvetaev’s death in 2022, his shares passed to General Director Denis Pruzhina under murky trustee arrangements.
By 2023, the numbers looked grim: Zadubrovsky Novy hemorrhaged 663 million rubles despite raking in 1.7 billion in revenue. Evtinsky Novy fared slightly better with a net profit of 30 million rubles on 2 billion in sales—though whispers of deeper financial troubles persist.
What’s Next? Systemic Collapse or a Lifeline?
With production halted, workers laid off, and creditors circling, Russia’s coal industry looks dangerously close to the long-predicted implosion. The government’s reassurances are ringing hollow as global energy markets shift away from coal, leaving the once-mighty Kuzbass mines teetering on the edge of oblivion.