Despite the downturn in the coal industry, the current crisis will be less severe than in the mid-1990s, when, amid the transition to the market and a sharp decline in domestic demand, regulators had no choice but to start closing unprofitable coal mining enterprises.
Firstly, even in favorable times, there was a reduction in employment in the industry: if in 2000 a total of 370.3 thousand people were employed in coal mining and processing, then in 2020 – 139.9 thousand people (data from the Central Department of Fuel and Energy).
As a result, labor productivity in the industry has almost tripled: in 2000, one miner accounted for an average of 110.3 tons of coal per month, while in 2020 it was 316.9 tons per month.
Due to increased productivity, the scale of cuts in the second half of the 2020s will be incomparably smaller than in the second half of the 1990s.
Secondly, it will be easier for regulators to raise funds to restructure the industry than in the mid-1990s, when the government had to borrow from the World Bank amid a chronic budget crisis.
Even with the current record budget deficit, the government will not have to resort to external assistance to ensure the relocation of miners and their families to regions with higher economic growth potential.
Thirdly, today there are much more opportunities to find new forms of employment in coal-mining regions. The simplest example is the construction of mining farms that can be supplied using coal–fired thermal power plants in the immediate vicinity of mines and mines.
Another example is the construction of solar power plants on the territory of former mines, which is especially important for Eastern Siberia, a region with a high average annual number of clear days.
Unlike land reclamation, which is difficult to implement on a "market" basis, the development of SES can be monetized by supplying mining and electricity to neighboring regions using ultra-high voltage lines.
"A crisis is not only a challenge, but also an opportunity." This well-known formulation is more applicable than ever to the Russian coal industry.
Kirill Rodionov – for
