russia’s Coal Industry Is in Decline with No Prospects for Recovery

Losses in russia’s coal industry may reach $7.1 billion in 2026 – by 41% more than the previous year. This is happening against the background of a persistent toxic mix of factors: the rf central bank’s high discount rate, devaluation pressure on the ruble, and chronically low export prices leave the industry with no room to maneuver.

As of March 2026, 62 russian coal mining companies are in the “risk zone.” Of these, 20 have already ceased production, while 15 have decided to mothball or completely liquidate their operations. The industry’s debt has exceeded $18.5 billion – it has grown by $3.7 billion since July 2025 alone. The debt burden continues to grow, while the sources to service it are disappearing.

The reasons are systemic and have no quick solution. Domestic demand is shrinking. In Asian markets – a key direction following the loss of European markets – russia is losing the competitive battle to Indonesia and Australia. Logistics costs are rising due to higher freight rates, while the russian central bank’s tight monetary policy is finally crushing the profitability of enterprises that are already in the red.

Since 2022, prices for russian coal have fallen by 35–50%, depending on the port of shipment. The sharpest decline has been recorded in the far east and Baltic regions – precisely the routes that were supposed to offset the loss of Western markets. Production volumes have been declining continuously since 2022.

The industry has entered a phase of structural crisis from which there is no escape through a simple price hike. Even a partial stabilization of market conditions will not restore profitability – the accumulated debt burden is too great, costs are rising too rapidly, and markets have been lost too irrevocably. In the medium term, russia will be forced either to increase discounts on coal, ultimately turning it into a loss-making export, or to seek even less profitable sales channels. Both scenarios mean one thing: the rf’s coal industry is in decline with no prospects for recovery.