3The rapid increase in the cost of coal mining in Poland, together with a permanent fall in the prices of that raw material on the market, brought about the lasting unprofitability of numerous Polish mines. ‘For the Polish mining industry, the lower prices of coal mean cost-cutting, closing indebted mines or restructuring mining companies by winding down the least profitable mines’, judges Aleksander Śniegocki in an interview for the Newseria News Agency.
‘Over the last months we witnessed a slight recovery of the very low price levels on the coal market. Currently, this price fluctuates around $60 per tonne, while only a few years ago it exceeded $100. In such conditions, the Polish mines were profitable; now they have a little breathing space, even though they are not yet in the clear,’ stresses Aleksander Śniegocki, the Newseria Investor and the manager of ‘Energy and Climate’ project in WiseEuropa.
In the European ports, the price of coal increased by 8,1% over the last month, reaching approx. $59 per tonne. In the beginning of the year it still oscillated around $50. It also transfers to the price of coal in Poland. In the first quarter of the year, the average price of coal from Polish mines amounted to less than 232 PLN, which is by 45 PLN less than it was a year before – this means a decrease around 16%. The average price of steam coal reached nearly 216 PLN per tonne and the coking coal – slightly above $300 per tonne. This year, the mines lost roughly 30 PLN on each tonne of coal in just over the first three months.
‘There is no indication that the price of coal will continue to rise, therefore there is little probability of a substantial recovery and a return to the boom from a few years ago. That is why the mining companies will need to cut some costs as they cannot expect the price increase,’ argues Śniegocki.
During the first six months, the mining companies produced approx. 34.3 million tons of coal (i.e. 0.1 million tonnes less than in the same period of 2015) and sold approx. 34.5 million tonnes (compared to 34.4 million tonnes a year before). At the end of June the amount of unsold coal filling the piles near the mines amounted to 5.2 million tonnes (compared to 4.7 million tons in May). The employment in the mining industry also decreased since the beginning of the year, by roughly 4.3 thousand jobs. According to the expert, the difficult situation in the mining industry requires concrete action.
‘There are really two scenarios: either no actions will be undertaken, which will result in time in a rather chaotic closure of mines that will no longer have a supply of cash, or a gradual, but decisive restructuring of unprofitable mines and shafts will be carried out, together with relocating the employees to the most productive mines’, assesses a representative from WiseEuropa.
The text above is an excerpt from an interview with Alexander Śniegocki for the NEWSERIA News Agency: WiseEuropa: private investors’ intervention would be an opportunity to create new jobs in the mining industry (interview in PL)
