Russian companies abandon unprofitable mines in occupied eastern Ukraine, triggering debate over who foots bill for decommissioning

Two Russian companies that leased 15 mines in Ukraine’s occupied Luhansk and Donetsk regions — Impex-Don and the Don Coal Trading House — have relinquished nine of the mines after determining that high operating costs and current global coal prices render planned operations unprofitable. 

According to the news outlet RBC, the fate of the abandoned mines is now caught up in a debate between state officials and investors who scooped up the property rights when Moscow began selling them last year. The discussion concerns who will bear the costs of drafting technical plans for decommissioning the unprofitable mines and who will pay to maintain them until they are either shut down or mothballed. RBC estimates that the annual upkeep cost for all the mines in question is 2–3 billion rubles (roughly $30.4 million). There is also pressure to develop a plan to provide alternative employment or retraining for the miners who worked at these facilities. 

Ivan Mokhnachuk, head of the Russian Independent Trade Union of Coal Industry Workers, told RBC that failure to manage the shutdown process of the mines responsibly risks “ground deformation” in the surrounding residential areas.

Ukrainian officials estimate that Moscow’s proxy forces in Luhansk and Donetsk exported to Russia approximately 2.8 million tons of coal per year, worth around $288 million, between 2014 and 2022. Kyiv says there were 95 mines operating in Luhansk and Donetsk before Russia’s incursion into the regions. The number of these mines still in use today is unknown.

The Donetsk coal basin is one of the largest in the world. In 2023, the Russian government drafted a plan to reform the region’s coal industry by attracting new private investment. In 2024, Russian officials began leasing the mines to these investors.