According to Mining Weekly, citing Reuters, Russia’s Finance Ministry announced on the 18th that it would provide coal companies with a tax reduction of 63 billion rubles (approximately US$804.8 million). This measure is aimed at helping coal companies cope with the challenges posed by high interest rates and Western sanctions.

In a statement, the Russian Ministry of Finance said, “This tax support measure for the coal industry will enable enterprises to retain operating capital even as their financial and economic indicators deteriorate.”

In 2024, Russian coal exports declined by 6% due to disruptions in infrastructure and sanctions. Last December, President Putin instructed the government to develop support measures.

A government letter seen by Reuters in April stated that the financial situation of the coal industry continues to deteriorate, with 30 companies facing the risk of bankruptcy. These companies employ approximately 15,000 people and produce around 30 million tons of coal annually.

The coal industry and commercial real estate are considered the sectors most severely affected by Russia’s economic slowdown and high interest rates. Bankers believe that these factors are making it difficult for businesses to refinance their debt.

However, as of now, no coal enterprises have yet gone bankrupt. The Ministry of Finance stated that coal companies can also postpone the payment of mineral extraction taxes until November 30. In addition, companies will be able to defer settling their accrued taxes due by June 1, 2025. In the same government letter, Deputy Prime Minister Alexander Novak attributed the industry’s difficulties to falling international coal prices, a stronger ruble, Western sanctions, rising logistics costs, import tariffs, and payment challenges.