A wave of consolidations is expected in the Russian coal industry

Analysts from the National Credit Rating (NCR) predict that in the next year and a half, the Russian coal market will consolidate through acquisitions or financial recovery procedures. The agency&s review, reviewed by RBC, notes that small firms experiencing financial difficulties will be acquired by larger players.

According to the NKR, medium and small enterprises engaged in thermal coal mining turned out to be the most vulnerable. After the loss of the European market, Russian companies redirected exports to China (40-45%), India (10-12%) and Turkey (10-15%), but they had to re-establish themselves in these markets, resorting to price concessions. Analysts emphasize that maintaining export volumes is crucial to maintaining profitability.

Additional pressure is exerted by high interest rates and limited access to long-term financing, which has a particularly negative impact on medium-sized businesses. So far, government support is mainly focused on large enterprises. "The financial performance of medium—sized and small companies will deteriorate first, and they will face credit quality problems," the NKR experts predict.

Currently, there are about 180 companies operating in the industry. According to Rosstat, in 2024, the share of unprofitable coal enterprises increased to 53.3%, while in 2023 this figure was 31.5%. The total loss of the coal industry in 2024 reached 112.6 billion rubles.

On May 29, the government approved a set of measures aimed at supporting the coal industry. These measures include deferral of taxes for certain companies, special conditions for financial recovery or bankruptcy, as well as benefits for rail transportation.