Vorkuta coal company reports severe crisis
The management of VorkutaUgol has, for the first time, openly acknowledged serious problems, warning that the future of the city’s main enterprise—and of Vorkuta itself—is at stake.
This became known on 29 April, when the company released an official press statement. It noted that since 2024, Russia’s coal industry has been experiencing one of the most severe systemic crises in its history.
“The total losses of Russian coal companies in 2025 reached 408 billion roubles, nearly four times higher than the previous year (112.6 billion roubles). The share of loss-making enterprises rose to 66.1%, compared with 53.3% in 2024,” said VorkutaUgol’s Chief Executive Officer, Maxim Panov.
The company’s difficulties began as early as 2025. Even then, management admitted that it was operating at a loss, with coal production continuing only thanks to state support.
The leadership warns that negative trends will intensify in 2026. One of the key factors, alongside the wider industry crisis, will be a reduction in deliveries to the company’s main partner, Severstal. From May, volumes will fall from 280,000 to 180,000 tonnes per month, as Vorkuta coal is replaced by cheaper coal from Kuzbass.
In addition, the contract with Severstal is due to expire on 30 April 2027, which could result in the complete loss of its principal market.
Other contributing factors include the cessation of supplies to the occupied territories of the Luhansk and Donetsk regions, where coke-chemical production was mothballed in early 2026. Supplies to the Moscow Coke and Gas Plant are also expected to halt, as the plant faces financial difficulties and already has overdue debts for previously delivered coal.
In response, VorkutaUgol has begun developing a programme to scale back production. In particular, management has initiated the suspension of a federal industry agreement and the company’s collective labour agreement.
“Historically, the company has regarded these agreements and its social obligations to employees as unconditional. However, what is now at stake is the future of the Arctic city’s backbone enterprise—and of Vorkuta itself,” Panov stated.
These challenges extend beyond VorkutaUgol alone. In March, reports emerged of a possible strike over delayed wage payments to employees of SeverPutStroy and SeverKomplektStroy, companies responsible for maintaining railway infrastructure and handling transport for VorkutaUgol.
According to SeverPutStroy employees, management has been unable to pay wages due to a lack of payments from VorkutaUgol. They also report that delays have persisted for a considerable period.
“A year without proper wages is not living—it’s survival. We exist in constant uncertainty: salaries are paid in instalments, with advances of around 4,000 roubles. If the situation does not improve, it will affect the entire chain: no work means no coal,” workers say.
Earlier, Barents Observer reported on broader difficulties in Russia’s coal sector. According to expert estimates, coal production has been declining for the third consecutive year, and is expected to reach around 436 million tonnes in 2025. Exports may fall to 189 million tonnes—the lowest level since 2019.
