Poland plans deeper role for state energy companies in bid to strengthen coal industry

By bne IntelliNews September 5, 2016

Poland will retain state control over its struggling coal-mining sector via mergers and consolidation with the state-controlled energy sector, local media reported on September 5, based on a leaked government report.

The report outlines the future of the industry in Poland until 2030. Since taking power in November, the Law and Justice (PiS) party has earmarked coal mining as one of the central elements of its broader energy and economic policy. However, that has largely been at the expense of the country's listed state-controlled energy companies.

The report shows the role of the state in the coal sector will be retained, with the government planning the merger of coalmines and “vertical capital integration” with energy companies, Gazeta Prawna claims. Poland has already pushed the energy companies it controls to invest in new mining group PGG, which was established as a rescue vehicle for indebted and loss making Kompania Weglowa, Europe’s largest coal producer.

Poland will also seek to take advantage of coalmine closures in neighbouring Germany and the Czech Republic via a bid to sell Polish coal on those markets. Wary of the European Union’s drive to curb emissions from the power sector – which in practice means limiting the use of coal – the report says investments will be made in clean coal technologies.

"The programme’s main goal is to create the conditions for fostering a profitable, effective, and modern coal mining sector that will rely on knowledge and innovations … so as to ensure Poland’s energy security and competitiveness of the national economy," the report states. "To achieve [that goal] it is necessary to carry out a radical reform of the mining sector," it continues, according to the newspaper.

The report does not mention liquidation of any coalmines, however. Recent hints by government officials that the least profitable coalmines may have to close down were immediately criticised by the sector’s powerful unions. The report states unions in mining are a problem because of their negative approach to reform plans.

Meanwhile, the bid to pull state-controlled energy companies further into the sector, which has been making huge losses due to weak markets and inefficiency, is only likely to further dent share prices.

 

Related Articles

Latvia issues permits to new gas infrastructure holding

The Latvian Public Utilities Commission (SPRK) announced on January 5 that it has issued licences to Conexus Baltic Grid for the transmission and storage of gas. Conexus Baltic Grid will control ... more

Iran to seek arbitration over termination of gas flow from Turkmenistan

The National Iranian Gas Company (NIGC) intends to take its recent gas dispute with Turkmenistan to international arbitration, Mehr News Agency reported on January 4, citing ... more

CEZ ignores Czech finance minister and re-elects CEO

The supervisory board at Czech power group CEZ ignored pressure from the finance ministry to dump the current management, local media report. Finance Minister Andrej Babis has been accumulating ... 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