Polish government meets fierce resistance to coal mine closures

By bne IntelliNews January 13, 2015

Wojciech Kosc in Warsaw -

 

The Polish government’s plan to rescue the heavily indebted and lossmaking coal group Kompania Weglowa risks derailment just days after it was announced,  as protests against the mine closures spread. 

Prime Minister Ewa Kopacz’s 12-hour negotiation marathon with the unions ended without success late on January 12 and will resume on January 13. Meanwhile,  according to unions, it is “likely” that protests in several mines of Kompania Weglowa, which the government plan slated for closure, will escalate into full-blown strikes.

What is also worrying for the government is that disapproving voices are coming not just from the unions, but also from mayors in towns where coal mines are located, who claim the plan was never formally consulted with them. They claim that the plan, if implemented, would damage the local economic and social fabric, as it would make several thousand people redundant, with a knock-on effect on a long supply chain of  hundreds of suppliers and subcontractors.

The situation could get out of hand just months before general election, with protests escalating and the rightwing opposition already rallying in the affected region of Katowice with slogans of “we will save coal mining in Poland".

This might be prompting Kopacz to soften the government’s position. At least that is what unions taking part in the negotiations are indicating.

“We have determined that the four coal mines in question will not be liquidated but will undergo a process to improve their standing,” Bogusław Ziętek, head of the Sierpien’80 (August’80) trade union told reporters on January 12. The process that he refers to will reportedly involve the four troubled coalmines being shifted to a special purpose vehicle to restore production over time.

This would be a deviation from the plan announced last week, which stated clearly that the four coal mines would be liquidated over the course of one year. There was no confirmation of Ziętek’s revelations from the government side, however.

The government plan, revealed on January 7, foresaw liquidation of Kompania Węglowa (KW), with its healthier assets being moved to a new company, at a cost of PLN 2.3 billion (€534 million) in 2015 and 2016. Four coal mines that have no chance of getting back in the black, according to the government, would be transferred to another SPV for closure.

The four coal mines that would be closed currently employ about 11,000 people. The government proposed that 6,000 of them would get new jobs in the new “healthy” entity, which the PM hopes would become a new strong company able to “compete on the European coal market.”

The remaining 5,000 could take advantage of various protection programmes, including leaving the job for a one-off payment equal to up to 24 monthly salaries.

The government is racing against the clock, as its own plan stated that Kompania Weglowa would face abrupt bankruptcy in just weeks if no action is taken, prompting critics to ask questions why the government is thinking of taking action only now, whereas coal prices started to fall two years ago.

“Lack of reaction [of the government] to the incoming signals of the worsening situation in Kompania Weglowa discredits the government officials responsible for coal mining,” the Solidarity trade union said earlier this year.

Meanwhile, Universal Energy, a private company owned by one of the richest Poles, Krzysztof Domaradzki, proposed to take over three of the four coal mines scheduled to close in the government plan. The proposal, however, was not detailed enough for Kopacz to express any interest other than the diplomatic “we need more details”.

 

 

 

 

 

 

 

 

 

 

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