Cheap coal and Kuzbass: how sanctions and low prices affect the mining region

Alexander Titov commented to the Novye Izvestiya newspaper on the impact of sanctions and low export prices on the Russian coal industry.

The profits of Russian coal companies decreased by 96% in 2024. In total, Russian coal miners earned 4.7 billion rubles against 100 billion last year.

12 billionaires who control the coal business in Kuzbass directly or indirectly, from Roman Abramovich to Iskander Makhmudov, the families of Mikhail Gutseriev or Nikolai Strukov, are under sanctions. In the spring, another "black swan" flew to the coal region — the US Treasury added several coal companies to the list of sanctions at once — Siberian Anthracite, Mechel, SUEK.

— These are large companies that, as a result of decisions taken by the American Ministry of Finance, create the risk of secondary sanctions for those who work with them. This has greatly complicated the process of settlements, searches for ships, searches for traders and counterparties. Life has become more complicated, so those companies that continue to work with our coal suppliers are asking for additional discounts and preferences. This also pushes down the prices of Russian export coal.

Unlike officials, the expert community has no great illusions about the coal market.

— The demand for coal in the world will be at a high level for a long time, there will be no collapse, although there will not be strong growth. There will be no coal renaissance, but there will also be no alarmist decline, as some experts predict. If the price falls, demand starts to rise. And the price rises again. However, it was the same with gas. The Chinese wanted to switch everything to gas. Gas prices have risen, China had to return to coal, gas has become too expensive," Alexander Titov says.

Russian coal miners have problems not only with falling world prices for their goods, but also with increased competition for resources within the Russian Federation. Kuzbass was unlucky because it is located in the very center of the country. Previously, there was no problem with coal transportation. Now the ports in the Baltic give $ 30 less for each ton of coal than at the Eastern landfill.