President Vladimir Putin has authorized a series of urgent support initiatives aimed at stabilizing Russia’s beleaguered coal industry, which includes transportation discounts and assured export agreements for key mining areas, as reported by Russian media on Wednesday.
The Russian coal sector has faced significant challenges due to Western sanctions, increased production costs, declining global prices, and logistical obstacles. In 2024, the industry recorded losses amounting to 112.6 billion rubles (approximately $1.4 billion), with coal exports decreasing for the third successive year, down by 8% to 195.9 million metric tons.
“The crisis in the coal sector has escalated to the extent that entire production facilities are compelled to close,” Deputy Energy Minister Dmitry Islamov stated during a State Duma energy committee session.
“Vladimir Vladimirovich [Putin] has endorsed the program devised by the Energy Ministry, but there is still considerable work ahead to put these measures into effect,” Islamov added. “The situation regarding prices, exports, and tariffs remains quite challenging.”
In a letter to Putin dated April 25, Deputy Prime Minister Alexander Novak advocated for further assistance beyond the current export guarantees for the Kemerovo region and discounts on rail fees for coal transportation, as reported by the business newspaper Vedomosti.
Novak urged high-level discussions with China and India to eliminate import duties on Russian coal, according to Reuters, which also noted that it had seen Novak’s correspondence addressed to Putin. The news agency reported that Western sanctions have redirected 80% of Russia’s coal exports toward Asia.
The deputy prime minister also cautioned that about 30 coal companies, generating a total of 30 million metric tons annually, are at risk of bankruptcy. He suggested restructuring or supporting viable companies through the state development bank VEB, while proposing a specialized bankruptcy process for those that are beyond recovery, as per Reuters.
Vedomosti mentioned that Novak recommended a 60% discount on long-distance transportation costs and a 10.5% discount on transportation fees for exports until the end of 2025. He also proposed a 12.8% reduction in rail tariffs to western and southern ports for this year.
Furthermore, Novak suggested guaranteed export agreements for the Khakassia region, which neighbors the coal-rich Kemerovo region. To counterbalance the expected loss in revenue from lower freight rates, he recommended unspecified federal subsidies for Russian Railways.
Putin, who initiated emergency support measures in December after nearly half of Russia’s coal companies became unprofitable, reportedly gave formal approval to Novak’s recommendations on Wednesday, May 7.
