“CZECH MOVIE” AND POLISH COAL REALITY SHOW

Polish producers are trying to win the tender for coal deliveries for 2016 to the largest Czech coal-fired power plant in Detmarovice (EDE, 800 MW). With the current international coal prices at a level of 50 USD/Mt, the whole contract can be worth around 120 million PLN. In 2013 Poland sold to Czech Republic hard coal worth 700 million PLN (166.45 million EUR).

EDE, which uses annually almost 600,000 tons of steam coal is located just a few hundred kilometers from Polish border. It was build next to Ostravsko-Karvinska coal basin, but its chimneys are well-visible from Silesian cities: Rybnik, Gliwice and Jastrzębie-Zdrój). The geographic location makes EDE a very interesting client for Silesian producers.

The rumors about Kompania Węglowa and Katowicki Holding Węglowy trying to sell its coal to EDE infuriated Czech labor unions from OKD. One of their leaders, Jaromir Pytlik said that Polish offers are “unfair, since coal mining in Poland is subsidized from the state”. Pytlik seems to forgot how last year Czech government decided to rescue Paskov (OKD’s largest mine) with 22 million EUR, which would allow the facility to maintain its production till 2017. “Czech movie” is a Polish common expression, describing the situation when “nobody knows nothing”. Fits perfectly.

Meanwhile Michal Herman, CEO of Czech-owned (EPH) PG Silesia, located in southern Poland commented the situation in Polish coal mining (mainly the Tauron’s being forced to take over Brzeszcze), saying that the whole industry recalls a reality show. Herman also mentioned his company (as an example to follow for KW and KHW), with its 1.7 million tons of coal produced annually with only 1,700 employees.

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