Coal crisis in Russia: Mines shut down in Russia’s main coal-producing oblast
Pravda Ukraine
Western sanctions and difficulties with exports to Asia have triggered a serious crisis in Russia’s coal industry.
Source: Ilya Seredyuk, Governor of Kemerovo Oblast, at a parliamentary meeting; The Moscow Times
Details: The most affected coal mining area was Kuznetsk Basin (Kuzbass), Russia’s main coal-producing region, which accounts for about 60% of total hard coal production and 80% of coking coal.
Eight coal companies in Kemerovo Oblast have shut down due to financial problems. Hundreds of miners have not been paid for several months.
Quote from Ilya Seredyuk: “The sanctions imposed by Western countries are transforming the structure of our export and import supplies. Falling prices on global markets, logistical problems, staff shortages and a high key rate have all become a serious challenge for the coal industry.”
Russian companies, having lost access to Western markets, are trying to reorient their exports to Asia but are facing difficulties there as well. In 2023, India reduced purchases of Russian coal by 37% and China by 13%. As a result, total coal exports from Kuzbass fell by 10.4%, and total production in the oblast decreased by 7.3% to 198.4 million tonnes.
Background:
- Russian coal exporters have been facing a decline for three years now, leading to lower profits and production.
- Coal production in Russia fell by 6.7% year-on-year in July 2024, with a total volume of 31.5 million tonnes, the lowest since the Covid-19 pandemic.
- The proportion of unprofitable coal companies in Russia has exceeded 52%, while coal exports have fallen by 12%.
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