Russian coal firms will receive tax breaks worth an estimated 63 billion roubles ($804.08 million) this year, the Finance Ministry said on Friday, in a move aimed at helping producers to stay afloat amid high interest rates and Western sanctions.

“The proposed tax support measure for the coal industry will allow companies facing a deterioration in their financial and economic indicators to free up working capital for the specified period,” the ministry said in a statement.

President Vladimir Putin ordered the government to develop support measures last December after Russia’s coal exports fell 6% in 2024, pressured by infrastructure disruptions as well as sanctions.

A government letter from April, seen by Reuters, said that the sector’s financial health had continued to deteriorate, with 30 companies – employing roughly 15,000 people and producing around 30 million metric tons annually – at risk of bankruptcy.

The coal industry, along with commercial real estate, is seen as one of the sectors most affected by Russia’s economic slowdown and high interest rates, which make refinancing debt off-limits, according to bankers.

There have however so far been no bankruptcies in the sector.

The finance ministry said that coal firms would also be able to defer mineral extraction tax payments until November 30. In addition, companies will be able to defer settling tax debt accrued as of June 1, 2025.

In the same government letter, Deputy Prime Minister Alexander Novak blamed falling global coal prices, a stronger rouble, Western sanctions, increased logistics costs, import duties in China and India, and payment complications for the sector’s woes.
Source: Reuters