Analysis of Key Factors Affecting the Financial Position of Russian Coal Industry Enterprises in 2022-2025

Abstract

The Russian coal industry has been undergoing a long process of restructuring. It seemed that over the past decade, despite numerous forecasts from leading analytical agencies about a reduction in coal consumption, it had become sustainably profitable. However, the economic and geopolitical situation of the last two to three years has created natural stresses on the financial stability of coal enterprises. These stresses have demonstrated that the fundamental problems of the coal industry were never resolved during the "fat" years of high export prices. The purpose of this study is to identify and analyze key factors affecting the financial stability of the coal industry, potential risks and threats, and to assess the dynamics of coal production volumes, fixed capital investment, and the profitability of coal enterprises. The years 2024-2025 have proven to be very challenging for the industry, with all possible "black swan" events occurring: falling coal prices, deteriorating rail network performance, a collapse in coal shipments to destinations outside the east, and increased anti-coal rhetoric in the media. However, as a systemically important industry for several Russian regions, the coal industry has demonstrated that its problems extend beyond its relationship with Russian Railways. The article expresses the opinion, consistent with many industry experts, that the industry requires comprehensive and rather drastic reforms (even drastic measures such as mine closures), as well as more lenient options such as shifting production geography to the east.