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Sanctions, shrinking exports spark crisis in Russia's coal industry, media reports

by Tim Zadorozhnyy March 3, 2025 9:47 PM 2 min read
Illustrative purposes only: Coal in freight wagons ahead of shipping at Tomusinskaya railway station near Mezhdurechensk, Russia, on July 19, 2021. (Andrey Rudakov/Bloomberg via Getty Images)
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Western sanctions and shrinking export opportunities in Asia have triggered a severe crisis in Russia's coal industry, particularly in Kemerovo Oblast, the country's key coal-producing region, the Moscow Times reported on March 3.  

Kemerovo Oblast, or Kuzbass, which accounts for 60% of Russia's hard coal production and 80% of its coking coal, has been hit the hardest.

Financial troubles have forced eight coal companies in the region to halt operations, leaving hundreds of miners without pay for months, according to Kemerovo Governor Ilya Seredyuk.

"Falling prices on world markets, problems with logistics, a shortage of personnel, and a high key rate — along with Western sanctions — have created a serious challenge for the coal industry," Seredyuk said.

Russia has attempted to shift coal exports to Asia after losing access to Western markets, but demand has declined.

In 2023, Indian coal imports from Russia fell by 37%, while Chinese imports dropped by 13%. As a result, total coal exports from Kuzbass fell by 10.4%, and regional production declined by 7.3% to 198.4 million tons (396 million pounds).

Despite Moscow's deepening economic ties with Beijing, Western sanctions have become an increasing hurdle to Russian-Chinese trade, further compounding financial losses and bankruptcies in Russia's coal sector.

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