Russia's coal sector is being dismantled by the collaborative efforts between Putin and China.
In the heart of southwestern Siberia lies the Kuzbass, a vast coal mining region that has long been a cornerstone of Russia's energy sector. However, recent developments have cast a shadow over this once-thriving industry.
The Russian coal industry is grappling with a series of setbacks, with around 27 more companies in Kuzbass teetering on the brink of bankruptcy. Two-thirds of these companies are heavily indebted to Russian banks to the tune of over $15 billion, and many miners have not received their wages for months.
Vladimir Putin, Russia's President, is facing problems in Russia's core businesses, including the coal industry. The industry is struggling to respond to Ukrainian drone attacks on the oil industry, and the unprofitability in mining and transportation is causing further losses. According to the Russian Ministry of Energy, the coal industry is expected to lose around $4.4 billion by the end of the year.
The Russian attack on Ukraine initially boosted the coal industry, but it has since resulted in losses of around $1.5 billion in 2024. The Russian oil industry, too, has been hit hard, with no answer to the relentless attacks.
Meanwhile, the Chinese economy is facing challenges, dampening demand for steel and coal. Despite this, China has connected as many new coal-fired power plants to the grid in the first half of the year as it has in nine years. However, these are more job creation measures than necessary, as Chinese government officials have asked coal companies to reduce production, citing increased reliance on solar and wind energy.
China has also reduced its imports of Russian coal by 25% in the first half of the year. This reduction, coupled with the plummeting coal prices, which soared to $400 per tonne at the end of 2022 but have since plummeted to $60-$80, is a double blow for the Russian coal industry.
The podcast "Wieder was gelernt" has discussed these issues in depth, delving into the complexities of the coal industry, Russia, China, renewable energy, and more. As the world continues to grapple with energy crises and climate change, the future of the Russian coal industry remains uncertain.
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