HomeMediaLatest NewsWhat future awaits the Donbass coal industry

What future awaits the Donbass coal industry

10 February 2023

Kondratiev Sergey V. Deputy Head of the Economic Department, Head of the Real Sector Group

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, gave a comment to Vzglyad.ru on the dynamics of Russian coal mining.

"If we compare the history of the Kuznetsk and Donetsk basins, then in the 80s both experienced similar difficulties in the form of high cost of coal mining and low production efficiency. However, in the 90s, their roads diverged. The Kuznetsk Basin has gone through a rather painful restructuring. However, this gave Kuzbass itself and the entire region a second life.

Production was reduced, but it was made more economically profitable. And then we managed to seriously increase coal production. Now Kuzbass is at a historical maximum in production, which significantly exceeds the Soviet figure," Sergey Kondratiev says.

At the same time, the situation with Donbass was developing in a different way.

"The Ukrainian authorities have chosen an approach related to direct subsidies, price regulation and the preservation of mines in state ownership. The existing problems in the mines were preserved. Therefore, the restructuring of the coal industry will be required in any case," the expert believes.

It will be necessary to attract investors and government subsidies to restore the destroyed infrastructure and upgrade the old mines. And not all mines can survive and be restored, the interlocutor believes. Some may be too badly destroyed, others – just economically dead, even with a bunch of investments.
Kondratiev Sergey V. Deputy Head of the Economic Department, Head of the Real Sector Group
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