CONCERNS ABOUT FUEL&ENERGY CONCERNS 1/3

From right to left side of the political scene, through almost all the experts on mining industry – everyone is convinced, that the future of Polish coal and power producers lies in a large fuel&energy groups. Reasoning behind it? Self-sufficiency, transfer of responsibility (or rather: transfer of issues to be solved). Threats? A number… We’ll start with a first almost-finished project, that went through a various turmoils during execution of the merger (including labor unions protests and replacement of all members of Management Board). Behold: Tauron and Brzeszcze mine.

Enough been written in last two months on polishcoaldaily about the Tauron&Brzeszcze story, just as a reminder let’s check what was going on in there:

13 Aug TURMOIL AROUND TAURON’S BOARD

20 Aug “WE WERE TRYING, BUT THEY REFUSED TO HELP”

2 Sep POSSIBLE TENDERERS ON BRZESZCZE OFFER

11 Sep BRZESZCZE MINE: INTO ENERGY GROUP NEL MORI

16 Sep WĘGLOKOKS KRAJ, FTF COLUMBUS AND RSG ON TENDER FOR BRZESZCZE

23 Sep TAURON’S RSG AND FTF COLUMBUS JOINING FORCES

30 Sep BRZESZCZE’S UNIONS DEMANDS MOVING THE MINE STRAIGHT TO TAURON WYDOBYCIE

6 Oct SOAP OPERA “TAURON VS. SRK&MSP”: GRAND FINALE

From the very beginning Tauron was rather reluctant towards acquisition of Brzeszcze. With the two mines in Tauron Wydobycie, the company is managing to supply its own power plants with the 40% of necessary coal, with the new one its self-sufficiency will increase only by 10%. The only reasonable solution for rescuing Brzeszcze on market conditions was the plan of moving it to a group formed of RSG (the SPV formed by Tauron) and a company owned by Michał Sołowow – FTF Columbus. Sołowow saw a great potential in Brzeszcze, since his other entity – Synthos was supplied with methane directly from Brzeszcze. The company needs also large amounts of coal, so for them taking part in the tender was a serious investment.

This structure was also very convenient for Tauron, which did not wanted to put too much effort in restructuring Brzeszcze. Unfortunately, the participation of FTF Columbus in the tender was quickly scuttled by the mine’s labor unions, which demanded moving the facility directly to Tauron Wydobycie. Strong influence of the unions on the state owned Mines Restructuring Company (SRK) led to the cancelation of negotiations and forced the government to make a coup d’état in the Tauron’s Management Board. In his first statement the new CEO Jerzy Kurella showed his strong volition for acquisition Brzeszcze and shortly after the agreement has been reached.

On Monday SRK signed with Tauron’s SPV (still RSG, soon to be renamed to “Nowe Brzeszcze Grupa Tauron”) the preliminary agreement, in the symbolic presence of Andrzej Czerwiński, Minister of Treasury. The mine was sold for 1 PLN and will be moved directly to Tauron Wydobycie after deep restructure. Jerzy Kurella believes, that Brzeszcze can start making profits by the second half of 2017.

Kurella believes also, that this transaction will help Tauron in becoming a company with a stronger position, based on a “value chain” that covers coal production and power production, distribution&sales. Also Czerwiński was glad of the turn of events, although there was a fear forcing trough his words, that Tauron might have some problems dealing with Brzeszcze’s unions, which for the last year were thorns in MSP’s flesh.

Despite the good mood of both Kurella and Czerwiński, it seems like all in all the ending of the story could have been happier (or at least: more economically justified). Removing from the negotiations Sołowow’s FTF Columbus, which was the only “market-element” in the whole tender, and later replacing the defiant Management Board with “all the Minister’s men” suggests, that economy was once again beaten by the social “factor”.

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