This paper analyses the restructuring of the Russian steam coal market. The main purpose is to compare the prevailing steam coal flows between mine basins and electric utilities and the actual coal prices with those that would prevail in an efficient market. The analysis is done within a short-run linear programming model. Coal demands and supplies are identified. The objective function that is minimised consists of the delivered costs, i.e. extraction plus transportation costs, subject to exogenous demand requirements and capacity restrictions. We conclude that, in spite of attempted restructuring, the Russian coal steam coal market is still highly inefficient. This is mainly due to the fact that large amounts of coal are delivered over very long distances, a pattern that often cannot be justified in economic terms. Because of cost-inefficient coal deliveries and large subsidies, coal prices are also highly distorted. Given the communist legacies of the past, the restructuring process will probably take considerable time and is unlikely to be successful until there is a fundamental change in the economic and political institutions.