Losses of Russian coal companies in January-June 2024 jumped 3.4 times to 1.1 bln USD, surpassing profit totaling 0.9 bln USD (-71.9% y-o-y). As a result, net losses reached almost 80 mio USD compared to a profit of 3.2 bln in January-June 2023. The share of loss-making companies increased to 51% compared to 36% in the same period last year.
The last time the industry has experienced a net loss was only in 2020 totaling 0.4 bln USD. In 2023, the profit of Russian coal companies decreased 2.1 times to 4 bln USD (-4.7 bln USD y-o-y). However, in 2024, the negative trend intensified due to falling prices on the global market and a sharp increase in production costs.
Additional factors that continue to have an adverse impact on coal miners’ financial results are limited transportation capacities of railroad infrastructure, high railroad tariffs and western sanctions.
For many Russian suppliers, the current level of global prices and production costs make coal exports unprofitable, forcing them to cut production and abandon projects aimed at developing new coal deposits.
With the new U.S. restrictions sanctions now covering about 50% of export volumes, Russia’s coal exports could keep eroding in 2024 and 2025.
Coal production in Kuzbass, Russia’s major high-quality coal mining region, fell to 117.9 mio t in January-July 2024 (-7.4 mio t or -5.7% y-o-y). Total Russian coal exports over the same period dropped to 116.6 mio t (-11.6 mio t or -9.0% y-o-y).
Source: CCA Analytics
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