OKD will cut its workforce from more than 13,000 to just 5,000 by 2018, the struggling coal miner announced.

The hard coal unit of cash-strapped New World Resources (NWR), controlled by controversial oligarch Zdenek Bakala, is locked in talks with the government over winding down operations, as weak European markets have left it deeply lossmaking.

The announcement will hit the Moravia-Silesia region hard. OKD is also the largest employer in the unemployment-hit industrial area. The company has now expanded the list of mines to be closed by 2018 by adding the Darkov mine, Radio Prague reports. In late 2015, NWR announced a strategic restructuring plan envisaging the closure of the Paskov and Lazy mines.

Paskov is likely to be closed by the end of 2016. Under a deal that collapsed in late 2015, NWR was to keep the Paskov open until the end of 2017, in return for CZK600mn (€22mn) in state aid.

The Czech government and the Moravia-Silesia regional authorities have been pushing to extend the operation of the mines until 2020 so that they have enough time to tackle the social impact of their eventual closure. To this end, the environment ministry has approved extended mining in the region until 2023, subject to a number of conditions.  The unemployment rate in the region is 19.2%. An ongoing project is developing the industrial zone Nad Barborou, but attracting investors is expected to take more time.

Talks between the Czech authorities and NWR concerning OKD’s future are expected to continue. In December, the miner reportedly asked for €150mn in government aid. However, the Prague is unlikely to agree to any deal that would bail out Bakala, who is hugely unpopular across the country. On January 5, Industry Minister Jan Mladek said that the government's relations with NWR could improve if bondholders took greater control of the firm.