Russian economy meltdown as coal businesses collapse into administration – £2bn losses | World | News

The Russian economy is continuing to struggle under sanctions as the war in Ukraine drives many industries to brink of collapse.

As Moscow splurges on its illegal war in Ukraine, President Vladimir Putin warned last week that a “significant” increase in taxes is needed in order to keep the economy afloat.

He signed a law raising Russia’s value-added tax to 22% from 20% next year.

The changes come as many businesses continue to struggle under the weight of inflation and high interest rates.

As reported by Espreso in November, the real estate industry has entered a crisis with 19% of developers postponing project completions by more than six months and investment slumping by 44%.

The Financial Times also reported that 23 coal companies shut down in Russia last year with over 50 on the verge of bankruptcy. The sector recorded losses of 225 billion rubles (£2.1 billion) in just the first seven months of 2025.

By the end of November 2025, 74% of Russian coal companies were unprofitable, the BBC reports.

In September, Putin even admitted that “coal producers are having a tough time.”

One businessman said: “The war is bad for most of our businesses, if not all of them. But the coal sector is in truly deep s***.”

CEO of Russian Coal Vladimir Korotin told news agency Interfax in May, “is going through its sharpest crisis since the 1990s”.

Coal production in Russia has fallen for three consecutive years from 445 million tonnes in 2022 to 436 million tonnes last year.

Exports also took a 15% hit in that time.

Last year, the Russian government rolled out a rescue package for the coal industry, including tax holidays and subsidised rail tariffs.