EEC 2019

The key to the development of mines is stability, which the mining sector has not experienced in recent years

Hard coal is and will remain the leading carrier of electricity in Poland for a long time. In 2017, mines in Poland managed to extract a total of 65.5 million tonnes of coal, of which 53 million tonnes were used as steam coal, and 12.5 million tonnes as coking coal needed for steel production.

  • Polish coal mining recorded a profit of about PLN 3.611 billion in 2017.
  • This result is mainly a consequence of the economic situation on coal markets and high prices of raw materials.
  • It was also affected by the undertaken restructuring efforts, including the transfer of certain assets to Spółka Restrukturyzacji Kopalń (Mine Restructuring Company). 
  • Without investment, there is no chance of maintaining the volume of hard coal deliveries based on domestic extraction desired by the domestic market. Hence, coal import will grow.

In 2017, the sale of raw materials reached the level of 66.3 million tonnes, thus exceeding the level of extraction. Over 90 percent of coal was placed on the domestic market. The sale of coal exceed the volume of its production which translated into a reduction in inventories on the heaps near the mines. At the end of 2017, they amounted to 1.7 million tonnes, and thus 33% less than at the end of 2016. At that time it was 2.5 million tonnes. The average total coal sale price in 2017 was at the level of PLN 310.78/tonne, 26 percent higher than in 2016. The average price of steam coal reached the level of PLN 239.26/tonne and was higher by PLN 23.90/tonne. The price of coking coal reached the level of PLN 628.02/tonne, with the increase of PLN 242.27/tonne, which is over 62.8 percent more than the year before. 

At the end of 2017, 82 717 people were employed in hard coal mining sector, of which 63 721 people were working underground. In comparison with 2016, employment decreased by 1928 people. Therefore, as you can see, the industry is shrinking year by year.

The largest coal company is Polska Grupa Górnicza (which also brings together mines formerly owned by Katowicki Holding Węglowy) and Jastrzębska Spółka Węglowa producing mainly coking coal needed for steel production.

Currently, domestic mining is not adequate to meet the needs of the domestic market, hence the increasing imports of coal to Poland (in the first half of 2018, Polish mines extracted less than 31.9 million tonnes of coal in comparison to almost 32.8 million tonnes by mid-2017; there was a decline by over 900 thousand tonnes, and the volume of sales of this raw material approached 31.3 million tonnes compared to almost 33.4 million tonnes in the first half of 2017).

In 2017, coal import to Poland amounted to 13 million 300 thousand tonnes (export of coal from Poland amounted to only 6.3 million tonnes). During the whole 2018, coal import may exceed 15 million tonnes. 

In the EU, coal is censored, and the role of hard coal in the world's economy is not decreasing. Some analyses indicate that its consumption will increase by 2040. Coal is the third primary energy carrier with 20% share in the global consumption structure, behind gas and oil. In 2017, the most coal was extracted by China with as much as 3 billion 520 million tonnes. The US came second with 715 million tonnes of coal, followed by India with 712 million tonnes. Australia extracted 567 million tonnes, Indonesia 477 million tonnes, and Russia 408 million tonnes. 

The situation is somewhat different in the European Union. Production of hard coal is progressively slowing down, from 350 million tonnes in 1960 to just over 60 million tonnes in 2017. Its import to the EU remains significant. In 2017, the import of hard coal to Europe amounted to 172 million tonnes. The industry indicates that this constitutes about half a million jobs outside the EU, and the entire environmental impact remains in Europe.

A condition for maintaining the competitiveness of Polish coal in the country - not only during the prosperous times - is further reduction of costs, so that they correspond to the price of coal offered on international markets.  

The volume of coal for the Polish energy industry will remain at a similar level as at present, i.e. approximately 65 million tonnes. It will be difficult to maintain the current level of extraction in Poland and the competitive level of domestic coal prices, because new mines have to be built, which however is not the case. Without investment, there is no chance of maintaining the volume of hard coal supplies based on domestic extraction desired by the domestic market. Hence, the import of coal will increase. 

Currently, in the prosperous times, the mining sector should be preparing for a period of decline in coal prices. The postulates are, among others, a change in work organisation, including an increase in the mines' working week to six days (with a five-day working week for miners). 

The key to the development of mines is stability, which the mining sector has not experienced in recent years. While it is easy to limit the mining process, the recreation of production capacity is a long-term process. Therefore, the challenge in future years will be to increase the level of coal production in order to secure the needs of the domestic market. The worldwide coal market will be driven mainly by Asian countries.


© Polskie Towarzystwo Wspierania Przedsiębiorczości (Polish Entrepreneurship Support Association) 1997-2018


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