Management of Kompania Weglowa (KW), Europe’s biggest coal company which has recently agreed to sell Silesia coal mine to Scottish Gibson Group, is running talks with ArcelorMittal Poland, a company controlled by billionaire Lakhsmi Mittal.
“Talks concern production of coke coal and cooperation in this field”, Grzegorz Pawlaszek, KW CEO said.
“PB” source says that the potential investor is checking coke coal fields of KW.
“If KW has agreed to sell Silesia coal mine, it may sell another one as well”, “PB” source said.
KW has 5 mines. Today, production of coke coal constitutes less than 10 percent of KW’s production. Experts estimated that Szczygłowice, Bielszowice and Halemba mines have 300m tons of coke coal, or more than Jastrzebska Spolka Weglowa coal group. In order to explore the coal, giant investments are necessary. The ministry of economy evaluates them at PLN 3.1bn (EUR 889.7m) till 2010. The problem is that at the end of last year, KW had PLN 4.2m of debts, including PLN 1.2bn of debts against ZUS social insurance company. Operating loss amounted to PLN 900m and it was only thanks to selling stock of listed companies that the company had PLN 1.7m of net income in 2007.
Meanwhile, Lakhsmi Mittal has for several years already offered to buy JSW or Budryk mine. Delayed privatization plus problems with deliveries from JSW made the businessman look for other opportunities. It buys coal at KW and imports it from abroad.
“Coke coal is bought from KW. Cooperation is going very well”, Jerzy Podsiadlo, ArcelorMittal Poland deputy CEO said.
Decisions will be made in upcoming months over increased cooperation between KW and ArcelorMittal Poland. KW wants to increase production of coke cola from 10 to 50 percent.
(PLN 1 = EUR 0.287)