POLISH COAL MARKET –WEEK– SUMMARY 7/2016

Due to some technical issues, recently Polishcoaldaily became “less daily”, but we’re working hard on restoring our publication frequency. Quick summary of the last week main events, starting of course with the most important topic – Kompania Węglowa.

In 2015, all 11 KW’s mines by average were loosing 30.15 PLN on each sold ton of coal. Only 3 mines were actually bringing profits: Marcel (77.58 PLN/Mt), Bolesław Śmiały (11.77 PLN/Mt) and Chwałowice (8.66 PLN/Mt). Among the worst ones there were Pokój (-77.69 PLN/Mt) and Sośnica (-124.07PLN/Mt).

Still, unions are not willing to back down from their demands of keeping the same level of salaries as year ago and adds more, including immediate payment of 14th month pay (so far miners received only 30% of it, the missing 70 will be paid by July). Heat rises, and it wouldn’t be a surprise if in following weeks Krzysztof Sędzikowski will have to resign from his position (again). On Friday he joined Supervisory Board of Pfleiderer (wooden materials for furniture and construction producer, based in Grajewo) – looks like a silver parachute for soft landing.

Meanwhile on the other side of coal trade chain, Polska Grupa Energetyczna recorded 3bn PLN of net loss (for the first time in its history). In his official statement, CEO of PGE blamed for this situation i.a. EU climate policy and turmoil on the coal market. Unlike German RWE though, PGE decided to exclude asset write downs and pay dividends from the corrected result (4.3bn PLN of profit). Political pressure and gentle extortion to plug holes in the budget? Making the best of a bad job to seek salvation from potential investors? Or maybe both?

After introducing new Road Map for domestic economy by Ministry of Development, “innovation” became the top keyword in Polish public debate, and it doesn’t omit power industry. Deputy Minister of Energy Michał Kurtyka stated on Thursday, that “industrial and scientific potential concentrated around the coal sector will surely lead to development of new coal-technologies”. In general good news, but still only general terms. The whole industry needs some clear guidance and more specifics, especially now with the ghost of Industrial Emissions Directive laying on Polish coal-fired power and heat plants (more on that coming soon).

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