CONCERNS ABOUT FUEL&ENERGY CONCERNS 3/3

Brzeszcze’s takeover done, LW Bogdanka’s takeover done. Who’s next? Train of volunteers on the mining industry side, not many eager entities from the energy sector. The most probable scenario of PGE acquiring Makoszowy mine, week after week looks more like labor union’s radio request show and not a real preliminaries for this merger.

Makoszowy was moved to SRK in April, but not even for a moment the mine’s crew thought about liquidation – the facility is working just fine and produce its steam and soft coking coal (potential is rather high – in 2014 mine produced 790,000 tons of coal). Although SRK should be the one who is looking for investor to give the mine a new lease of life, so far the company was rather unforthcoming (gently speaking). In September we mentioned about an informal meeting between PGE and labor unions. Since then the only thing that SRK has done to dispose of Makoszowy was signing a letter of intent with PGE on 20th October (on the eve of parliamentary election, which suggest that these intentions were not entirely sincere). Andrzej Chwiluk, one of the unions leaders from Makoszowy was bit surprised of SRK’s sluggishness and reminded, that if there wont be any acquisition soon enough and SRK will not decide to continue cash injections, the mine will most probably be shut down in 2016.

Polska Grupa Energetyczna is the largest Polish power producer, with 38% share in the domestic market (2nd on that list Tauron has only 13.2%). Since its debut on the Warsaw Stock Exchange 6 years ago, the company owned in 58.39% by State’s Treasure was always treated by politicians as a “special tasks” entity; so far the company was involved in domestic nuclear energy project, searching for shale gas in Poland, investing in wind farms and looking for potential acquisitions in Germany and southern Europe. Taking into consideration changing government, it does not surprise that “energy market 007” was so reluctant to take over Makoszowy. Only God knows what missions will be assigned to PGE by Krzysztof Tchórzewski and Henryk Baranowski.

Not so long ago there were some rumors about creating two large fuel&energy holdings – one made of Enea, KHW and Bogdanka, the second of PGE, Energa and Kompania Węglowa. In the light of Enea’s taking over Bogdanka and few issues connected with this transaction (mainly the surplus of coal produced in LWB), the second model most probably will have to wait for a moment. The second also is unlikely to happen, due to the internal problems of outdated coal-fired facilities in PGE. Recently representatives of new Ministry of Energy were saying that KW will be rescued by the companies that were willing to do so (implicitly: PGE, Energa and PGNiG). The only problem is, that none of them wants to embrace drowning Silesian mining industry.

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