Warsaw (Puls Biznesu) – The income generated by Polish coal mines halved while their debts amount to PLN 5.8 billion (EUR 1.5 billion). Experts warn the situation may get dramatic in spring.
In the January-November period, Polish mines had PLN 536.7m of net income, nearly 50 percent less than in the same period of 2005. Sales generated by coal sales dropped by over PLN 1 billion to PLN 889m.
“Income fell because coal prices dropped and sales decreased. In this situation, the strikes, stops in exploration and blockades in mines planned by the miners will drag down the sector even deeper”, Janusz Olszowski, the CEO of the Industrial and Commercial Chamber of Miners said.
At the end of November 2006, the mines had PLN 5.8 billion of debts while the payments they should receive amounted to PLN 1.6 billion. Kompania Weglowa (KW), the biggest coal group in Europe, had nearly PLN 3.8 billion of debts, including PLN 1.8 billion of short-term ones. Coal companies failed to invest PLN 1.8 billion as promised. They invested PLN 1.3 billion.
“It looks like a real drama will start in spring when coal demand gets smaller. Sales will fall and losses will grow because the fixed costs are high. The sector may be unprofitable”, Andrzej Barczak, a professor from Economic Academy in Katowice commented.
Janusz Olszowski added that this time the miners will adversely affect themselves with their radical demands and protests against privatization planned by the state. There are 122,000 employees in the mining sector. The average wage amounts to PLN 3,900. This Thursday, the miners are going to decide whether to organize a 24-hour strike to protest against privatization plans.
(PLN 1 = EUR 0.258)