All of the sudden, Enea announced termination of the contract with Bogdanka for the deliveries to Kozienice power plant. Enea claims, that Bogdanka’s coal is too expensive and since they have to look after the interests of 2.5 million of their clients they have to search for alternatives. Bogdanka is shocked: Kozienice power plant was, alongside with Energa’s power plant in Ostrołęka one of their two key clients, buying annually around 3 million tonnes of coal.

Agreement between Bogdanka and Enea, signed in 2010, was giving the Lublin-based mine exclusiveness for deliveries until the end of 2025. Termination the contract means that only until 1t January 2018 Kozienice power plant will be supplied with Bogdanka’s coal. Enea stated, that during the recent negotiations both sides couldn’t reach the consensus in regards to prices for 2016.

Bogdanka is more than surprised. Zbigniew Stopa, company’s CEO claims, that last years both companies had a practice of closing the negotiations in Q4, around October. Stopa pointed out, that selling the coal bellow the cost of production could not be acceptable in his company and therefore they have a problem competing with Silesian producers, who apparently not only sell coal bellow Bogdanka’s costs (which are the lowest in Poland) but also are ready to cover the high costs of transportation (the distance from Silesia is twice as much as from Bogdanka).

Nevertheless, loosing such an important contract is not worrying Bogdanka’s management. They still have contract signed with Enea for the deliveries to the new energy block that is suppose to start its work in Q4 of 2017, with annual coal consumption at a level of 2 million tonnes. If only Bogdanka would manage to find the market for missing 1 million tonnes, the company might walk away from this situation.