Coal production in Kuzbass in 2024 will plunge to 196 mio t (-18.2 mio t or -8.4% vs. 2023), the governor of the region said.
In 2023, coal production in Kuzbass fell to 214.2 mio t (-9.4 mio t or -4.2% vs. 2022). Thus, the volume of output decline for 2024 will be twice as much as the drop in production last year.
In January-November 2024, coal enterprises of Kuzbass produced 180.3 mio t (-15.6 mio t or -8.0% y-o-y), according to the Ministry of Coal Industry of Kuzbass.
Exports from Kuzbass in the first 11 months of 2024 decreased to 92.0 mio t (-12.5 mio t or -11.9% y-o-y).
In 2024, coal export supplies from Kuzbass are estimated at about 100 mio t (-13.8 mio t or -12.1% vs. 2023).
Sanctions and the emerging trend of halting operations at Russian underground and open-pit mines, along with rising railway costs and logistical constraints, will continue to have a negative impact on production and supplies of high-quality Russian coal to the global market in 2025.
The deputy governor of Kuzbass reported that due to lower exports the price of coal in the domestic market in 2024 has already increased by 10%, while cutting export shipments will push prices up even more.
In fact, the domestic coal market was subsidized at the expense of export supplies. Exports enable to restrain the coal prices for domestic consumption. This coal with a relatively stable price covers the needs of the power industry as well as the housing and utilities sector.
Therefore, the price of electricity, heat and other household services for the population is lower than the cost of their production. Obviously, the decrease in exports will lead to higher cost of coal in the domestic market and will lead to higher expenditures of all budgets.
The rise in production costs and logistics expenses amid falling global prices resulted in the growth of losses. The share of loss-making companies now stands at more than 50%.
Kuzbass coal industry involves more than 150 companies, employing over 90 thousand people. The industry’s enterprises are city-forming for most of the region cities, whilst taxes from the coal industry generate the bulk of the local budget revenues.
Source: CCA Analysis
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