In 2024, Polska Grupa Górnicza will require state support of approximately PLN 5 billion. Even in 2022, when mines were unable to fulfill orders, the industry was in deficit. – We produce goods that are unattractive on the international market. It’s simply impossible to sell it,” said Jakub Wich in an interview with “Vprostu”.
Polish energy is based on coal, but it is extremely expensive – and this is not due to the prices at warehouses. Coal companies are connected to the state drip and this is a condition for their survival. Business Insider describes the Polish Coal Group as expecting government subsidies of up to PLN 5.5 billion in 2024. “Our interlocutors note that these are very relaxed expectations. As we found out, the original plan assumed a budget deficit for the coal giant of up to 10 billion zlotys. However, we were able to revise assumptions for next year, including reducing costs at individual mines, such as material purchases and planned investments,” we read.
Mines on the state drip
The site recalls that when the PiS party came to power in 2015, it found that Silesian coal companies were on the verge of bankruptcy. Due to the need to improve management, Polska Grupa Górnicza was created, which absorbed the mines of the bankrupt Kompania Węglowa, and then Katowicki Holding Węglowy. The journalist also mentioned the recurring rancor in Silesia that if PiS did anything, even a little, for the mining industry, it would still be more than the previous PO-PSL government.
Another form of supply to the mining industry is the so-called social agreement with miners, which provides for the liquidation of all coal mines by 2049 in exchange for almost 29 billion zlotys, which will come from the state budget for the mines. “The money will be transferred in monthly tranches. As part of this program, mining companies have already received PLN 1.6 billion in 2022. Of this amount, PGG received approximately 1.43 billion zlotys, and Tauron Wydobycie received 177.6 million zlotys,” explains BI.
Ironically, support for the mine was needed even in 2022, when the Russian coal embargo caused demand for Polish coal to surge. The mines could not keep up with orders – and would have ended the year with a loss if not for government support.
Jakub Wich: Polish coal cannot be sold
“I think we will move away from coal faster than indicated in the so-called social contract, which is a cushion stuffed with money for trade union activists of miners. They believe that they can lie comfortably on it for more than twenty years. I wouldn’t be surprised if this cushion is taken away from them not by politicians, but by the market. The European Commission may at some point say “enough is enough” and prohibit further support of factories with the state drip. If there is no money, they will fail, energy journalist Jakub Wich said in an interview with the newspaper Vprost.
He stressed that Poland must abandon coal, and whoever comes to power must continue these changes.
– And not only because the European Union expects this from us, but also because Polish coal is unprofitable to mine, and coal-fired power plants are technically in a pre-emergency state. This was confirmed by the reaction of miners to the words of the president of Polska Grupa Energetyczna, who at the end of August this year announced the cessation of energy production from coal earlier than previously announced. The miners immediately sent a letter of protest to the Prime Minister, in which they argued that if PGE did not buy coal from Silesia, there would be no buyers for it. The sad conclusion here is that we are producing a product that is not attractive in the international market. According to him, it is simply impossible to sell it.
Source: Wprost
I am George Brown, author at Daily News Hack. I mostly cover economy news and I have been doing this for quite some time now. I have a lot of experience in this field and I’m always looking for new opportunities to learn more.
