New deal for Poland’s coal mines

The new company will be the largest coal producer in the EU. It will take over 11 mines owned by the struggling Kompania Węglowa (KW), Poland’s largest producer of coal, whose debts total nearly PLN 8.5 billion.

Underscoring the importance of the new company for the government, Prime Minister Beata Szydło and Energy Minister Krzysztof Tchórzewski attended the signing of the deal in the southern city of Katowice on Tuesday.

"Breakthrough day for Polish mining," Szydło tweeted. "Agreement signed. PGG starts work."

PGG is to receive a planned capital injection of over PLN 2.4 billion from investors.

PGE GiEK, Energa and PGNiG Termika are to contribute PLN 500 million each.

Under PGG’s business plan, the new group and its individual mines are to be operating without a loss by the end of next year. Last year, only three of Kompania Węglowa’s 11 mines were profitable.

PGG is to improve productivity and merge mines into more efficient units.

Trade unions at Kompania Węglowa last week reached a deal with managers that paves the way for the launch of PGG in May.

Failure to reach an agreement could have meant miners not being paid their wages next month and the threat of bankruptcy for KW. (pk)

Source: PAP