Czech coal miner OKD to slash workforce

By bne IntelliNews February 3, 2016

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.

Related Articles

Latvia heads off Russian gas mischief with legislation on strategic companies

The Latvian parliament passed amendments to national security and commercial laws on March 23, handing the state the power to block the sale of companies considered strategic. The legislation will ... more

Enea buys French utility out of Poland

Enea has acquired a 100% stake in Engie Energia Polska - the Polish business of French power company Engie - for PLN1.26bn (€290mn), the state controlled Polish utility said on March 14. The ... more

EU asks CEE to comment on Russian gas promises

The European Commission has invited comments from Central & Eastern European states on proposals put forward by Russian gas giant Gazprom to meet competition concerns. Visegrad and the Baltic ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss