Russia’s Coal Industry in Crisis: Prime Minister Convenes Emergency Meeting as Exports and Revenues Collapse
Today, Russian Prime Minister Mikhail Mishustin announced an emergency meeting to address the ongoing collapse in the country’s coal sector. Speaking alongside Oleg Belozerov, head of Russian Railways (RZD), Mishustin acknowledged the industry’s severe difficulties, citing “unfavorable market conditions”, logistical bottlenecks and collapsing global coal prices that threaten the survival of coal enterprises across Russia.
This high-level intervention comes as Russia’s coal industry faces its sharpest downturn in decades—driven by falling global demand, low prices, Western sanctions, and collapsing transport infrastructure.
A Sector in Decline
Two years ago, Russia produced 432.5 million tonnes of coal for the whole of 2023, a decline from 439 million tonnes in 2022. According to the International Energy Agency (IEA), production is expected to fall further by 3% in 2025, reaching around 416 million tonnes.
Coal exports, which once brought billions in foreign currency, are plummeting. Russia shipped 199 million tonnes of coal abroad in 2022, but that figure fell by 4% in 2023 and dropped another 8% in 2024. Projections for 2025 suggest a further 7% decline, to around 185 million tonnes.
Financially, the losses are staggering. In 2024, the coal sector posted total losses of 112.6 billion rubles (approximately $1.4 billion), according to Reuters.
Around 30 coal companies, employing 15,000 workers, are currently at risk of bankruptcy.
Infrastructure Breakdown
One of the primary issues choking the industry is rail capacity. Russia’s rail system—especially the Baikal-Amur Mainline and Trans-Siberian Railway—has become a major bottleneck. Russian Railways reported a 4.1% decline in cargo volumes in 2024, hitting a 15-year low.
Labor shortages, redirection of freight to Asia, and military prioritization have worsened delays. Coal from Siberia, particularly Kuzbass, cannot be exported in sufficient volumes to meet contracted demands.
Mishustin urged Russian Railways to consider new routing options, including the use of seaports and “manual” coordination by federal ministries. Oleg Belozerov, head of RZD, responded by promising to fulfill state delivery obligations, though he emphasized that better coordination would be necessary to avoid further disruptions.
Asia Is Not a Lifeline
Sanctions have closed off most European markets, forcing Russia to pivot its coal exports to Asia—especially China and India. But that strategy is faltering. In 2024, China imported 93.86 million tonnes of Russian coal—7% less than the year before, despite an overall increase in China’s global coal imports.
High transport costs, weak rail infrastructure, and competition from Indonesian and Australian exporters have undercut Russian coal’s competitiveness. For example, Chinese imports from Australia rose 59% in 2024, while Indonesian coal gained 8% in market share.
State Interventions Under Discussion
To ease pressure, Moscow is considering several bailout measures. Deputy Prime Minister Alexander Novak has proposed a 12.8% discount on coal shipments and up to 60% off for long-distance freight. Subsidies for RZD and new price controls on logistics are also under review.
Still, analysts warn these steps may be too little, too late. Structural challenges remain: isolated production centers, shrinking export markets, rising costs, and declining global demand amid energy transitions.
A Precarious Future
As of mid-2025, Russia’s coal sector is shrinking—by volume, by revenue, and by strategic importance. The industry once served as a backbone of Russia’s energy exports. Today, it is a liability that may soon require full-scale government subsidies to survive.
Unless the Kremlin undertakes major reforms—including diversification, infrastructure investment, and transparency—the sector could trigger economic and social instability in coal-dependent regions like Kemerovo and Khakassia.
Mishustin’s emergency meeting is a sign that Moscow sees the storm gathering. But recognizing the collapse is only the first step. Preventing it will take far more than words.
