Not long ago, Poland’s coal reserves – the second largest in Europe – were being touted as a future model for energy in Europe: one that could provide cheap energy independently of Russian resources. The situation has much changed with Poland’s coal miners recording massive losses as low prices hit the industry known for its high cost of production.
Indicative of the trend, wtate-owned Polish coal producer, JSW, recently reduced its production forecasts for the year and cut its CAPEX spend as the company struggles to regain profitability.
The company now expects to produce 13.8 – 14 million t of coal this year from its mines – including 1.5 – 1.6 billion t from its recently acquired Knurów-Szczyglowice mine. The company’s previous prediction of 13.8 million t did not include the Knurów-Szczyglowice production. JSW mined 13.6 million in 2013.
CAPEX was reduced to PLN 1809 million, compared to the previous estimate of PLN 2167 million (US$ 1 = PLN 3.3009).
Polish coal miners lost a collective PLN 1 billion in the first six months of this year, according to a recent report from the Financial Times, with JSW losing PLN 340 million. The industry is weighed down by inefficient work practices that mean it is cheaper to mine coal in Australia – where labour costs are higher, than in Poland.
The Polish Government is currently working on a plan to group its loss-making mines into one “bad miner” company for restructuring or closure, while another “good miner” would manage the country’s viable mines. But with the industry employing more than 100,000 people, any radical change is likely to be a tough political sell
Written by by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/20102014/world-coal-polish-coal-miner-jsw-cuts-production-forecast-amid-industry-woes-coal1426/