http://www.ft.com/intl/companies/mining
Knurow, Poland – Almost 1km below the rolling hills of southern Poland, four men, their faces coated in a slick layer of coal dust and sweat, pilot a colossal grinder as it rips metre-wide chunks of glistening black coal from the walls of a narrow tunnel.
At temperatures above 30C, by the dim light of torches and surrounded by the deafening cacophony of the screaming grinder and a thundering conveyor belt, such men and their machines work 24 hours a day, six days a week, churning out a fuel that was supposed to be the answer to Poland’s energy problems. But it has not worked out that way.
Over 300km north, in Warsaw’s government meeting rooms, lit by bulbs that rely on coal for almost 90 per cent of their power, the country’s politicians and bureaucrats have been debating how to rescue an industry in existential crisis: chronically lossmaking, inefficient and under threat from external pressures.
Poland’s vast coal reserves, the second-largest in Europe, were seen as the energy ace up its sleeve – offsetting reliance on Russian resources and providing enough cheap, domestic fuel to power decades of economic growth.
But then the US shale boom sent coal prices tumbling and exposed vast inefficiencies across the country’s state-owned miners. At the same time, environmental concerns have led to pressure from the EU for Poland to wean itself off the black stuff. From a blessing, coal now feels like Poland’s curse. “It seems like it is the biggest challenge for the country’s public policy,” says Wlodzimierz Karpinski, Treasury minister. “Put simply, it is one of the biggest challenges for the economy where the treasury still has assets.”
Poland’s mines lost a cumulative 1bn zloty ($300m) from sales of coal in the first half of the year. It costs more to extract coal in Poland than in Australia, where salaries are higher. Britain’s coal mines, slimmed down after a drastic and highly contentious restructuring in the 1980s, produce more than four times as much coal per employee as Polish ones.
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