POLISH COAL MARKET MIDWEEK SUMMARY 34/2016

European Commission will be pleased, after the last week’s announcement that from all 11 PGG mines Sośnica most probably be the one that will be shut down in 2017. The ultimatum given to the facility would be a mission impossible even for Tom Cruise with a pickaxe. Following Sośnica, now the similar fate will come to Slask mine from Katowicki Holding Weglowy, as the Ministry of Energy will be establishing PHW. The rest of the mines will be combined to two mines Myslowice-Wesola and Murcki-Staszic+Wujek+Wieczorek. By the way, it is quite thought-provoking, that two mines of PHW will need half of the money (900m PLN) that 11 mines of PGG needed to start its operations…

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POLISH COAL MARKET MIDWEEK SUMMARY 33/2016

Aversion to private investors in Ministry of Energy (ME)? In Autumn we’ve heard that Australian Balamara wanted to purchase Makoszowy mine, which is still generating loss in Mines Restructuring Company (SRK), but the whole plan just dispersed in the media. Later, the same ministry was not too favorable to sell Brzeszcze to private Synthos, which wanted to take it over when no one else did. Currently, ME is looking for an investor for Polski Holding Weglowy, but only among state-owned entities. Yesterday we’ve learned that in 2015 German HMS Bergbau, through its Polish company Silesian Coal wanted to acquire or at least lease some of Krupinski mine infrastructure, but the deal was blocked by JSW’s CEO. Instead of being really restructured, now the mine will be moved to SRK.

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CHEAP COAL? PRICEY COAL? – IT’S BAD EITHER WAY

The whole Polish coal industry is complaining for quite some time now on low coal prices and literally praying for some bounce off, which with the high production costs would allow them to record better results of unit sales. There it came, since April the prices are rising, but in the long term – will this trend be a salvation or doom for the coal producers?

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TURKEY GIVING A COAL THANKSGIVING TURKEY

Importing annually 33m Mt of hard coal, Turkey decided to impose a import duty on coal importers to “reduce the negative effects of imports on the Turkish economy”. According to the new law those exempt from the new duty are EU countries, members of the European Free Trade Association and a few other countries, mostly being coal importers. Among the whole, only Poland could be taken for a serious coal exporter. A gift for Polish producers?

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POLISH COAL MARKET MIDWEEK SUMMARY 32/2016

LW Bogdanka renewed its contract for fuel deliveries with EDF, burning approx. 7m Mt of steam coal per year. Because the French company is trying to dispose its Polish coal assets, the new deal is valid only until the end of next year. Rumors say that Ministry of Energy is trying to convince EDF to stay in Poland as long as it is possible, or at least until one of the energy groups (most probably PGE) will restore its decent cash flow and will be able to purchase the most valuable and strategic power plants. It seems like the government is not thrilled with the idea that some of the EDF-owned power plants will be taken by Chinese (using Czech EPH as an up-front).

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