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Polish coal needs protection and promotion – PM

World Coal,

During a coal industry summit held in the Polish city of Katowice, the prime minister, Donald Tusk, said that protecting and promoting the country’s coal sector was a top priority.

Katowice, in the heartland of Poland’s coal mining sector, was an apt setting for the prime minister’s announcement. Tusk said that the government had planned a series of actions in order to determine why Polish coal is less competitive than imported coal and how to address this.

Among the proposed solutions, the government will look into potential irregularities in coal imports and tax collection, Tusk told coal mining trade unions, coal companies and government officials who attended the Katowice summit.

Tusk also mooted the idea that Poland may liberalise slight regulations on public procurements with regard to purchases of simple equipment for the coal sector. However, previous plans to open up government assets to privatisation have been met with resistance from the Polish people. In 2011, the only way for the government to float its coal mining company JSW on the stock market was to gift 16% of the company’s total equity to 22 000 of JSW’s workers, who had fought bitterly against the proposed privatisation.

Pressure has often been placed on Poland from outside the country to do more to privatise its coal mining assets. The generally right-leaning Economist published an article in 2011 calling for the government to wake from its “post-communist slumber and bring in talent from outside.”

Nonetheless, at the Katowice summit, Tusk was keen to shift focus away from proposed de-regulation and privatisation and instead emphasise the need to find ways to support the struggling Polish coal industry. The PM said that the government “will try to eliminate dishonest imports, to ensure compliance with quality standards so that Polish coal does not fall victim to dishonest or ambiguous operations involving imported coal.”

"We also want to check if there are any illegal operations involving VAT or other pathological mechanisms that make Polish coal less competitive, or more expensive," Tusk also said.

The state will also review fiscal burdens on domestic coal production, the PM said.

In order to increase the share of domestic coal in retail sales, Poland will set up a national coal repository, which will sell Polish coal to retail customers at lower prices.

Tusk also explained that every effort should be made to support Poland’s largest coal miner, Kompania Weglowa (KW). He said that he would seek to curb profit-seeking at state-owned utilities in order to support KW. He said that, while energy firms owned by the state should turn a profit, they should not focus on profit maximisation as they have a responsibility to ensure the country’s energy security.

Poland relies on coal for roughly 90% of its electricity and energy demands.

"We do not want the power sector to bring profits to shareholders and at the same time see Polish coal in decline," the PM added.

"Promoting and protecting Polish hard coal is not just a slogan," Tusk insisted. Proof of this is found in the fact that power companies overseen by the Treasury are building new coal-fired power units. "We have to build a strategy for both coal mines and power plants, to encompass energy security, as well as social issues," the PM added.

Coal will remain the foundation of energy security, Tusk said. "Promoting and protecting coal means helping mines stay in business but profitability has to mean that coal is extracted at a lower cost," he concluded.

Written by Sam Dodson

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