In the first half of 2024, Russian coal shipments saw a notable decrease, falling to 25 million tonnes, a reduction of 1.9 million tonnes or 7% year-on-year. This downward trend is attributed to several factors including a significant drop in international market prices, unfavorable exchange rates affecting export duties, increased production costs, and ongoing transportation capacity limitations.
Effective from May 1, 2024, the Russian government abolished export duties for thermal coal and anthracite exporters. However, coking coal exports remain subject to duties based on the dollar exchange rate: 4% for 80-85 rubles, 4.5% for 85-90 rubles, 5.5% for 90-95 rubles, and 7% for rates above 95 rubles per dollar.
The decline in international prices, coupled with rising production and transportation costs, has severely impacted the profitability of coal exporters. Exporters are struggling with losses across most routes, and the tightening of Western sanctions has further exacerbated the situation. To remain competitive, Russian companies are offering coal at significant discounts compared to international benchmarks.
Looking ahead to 2025, the challenges for the Russian coal industry are expected to intensify. The introduction of a 10% surcharge on the mineral extraction tax (MET) will increase the tax burden on exporters, further straining their financial health.
Total coal exports from Russia, including thermal coal, fell to 99.0 million tonnes in January-June 2024, a drop of 9.6 million tonnes or 8.8% compared to the same period last year. The combined effect of market pressures and regulatory changes paints a challenging outlook for the Russian coal industry.
