The Russian coal industry is facing a profound financial collapse. According to Rosstat, the sector recorded a total loss of 408 billion rubles for the past year.
With a total output of 429 million tons, every single ton of coal produced resulted in an average net loss of 951 rubles. This makes coal the fastest-degrading sector in the entire Russian economy.
Profitability Crash and Rising Debt
The financial health of coal companies has become critical. Only one in three enterprises (33.9%) managed to remain profitable, compared to nearly half just a year ago.
Profits for successful players were halved, while the losses of failing companies nearly tripled, reaching 484,9 billion rubles. The share of loss-making companies in the sector hit a record 66.1%.
The Exchange Rate and the Sanctions Trap
The primary drivers of the crisis are Western sanctions, low global coal prices, and a more than 20% strengthening of the ruble. Since nearly half of all coal produced is exported, the “strong” ruble stripped companies of the revenue needed to cover operating costs.
Vladimir Korotin, CEO of “Russkiy Ugol,” described the current situation as the “sharpest crisis since the 1990s.”
Banking Sector at Risk
The industry’s woes are beginning to destabilize the banking system. According to the Central Bank of Russia, the share of bad and non-performing loans in the “metals and coal” category jumped from 2.8% to 7.6%.
In an attempt to save the sector, the government has resorted to emergency measures, including tax deferrals and rail subsidies. However, for Europe, this collapse is a prime example of how sanctions and isolation are dismantling entire industrial clusters, turning a once-profitable export resource into a burden on the state budget.