Mining unions at Poland’s biggest hard coal miner Polska Grupa Gornicza (PGG) went on a two-hour warning strike on February 17, demanding the Law and Justice (PiS) government address the sector’s mounting problems.
The Polish hard coal mining sector is on the verge of a crisis, as a mild winter and competition from cheap coal from Russia have dampened demand for domestic production. There were 4.9mn tonnes of unsold coal piled up in coal mines’ storage facilities and 9.2mn tonnes were stored by power plants at the end of December, data compiled by industry news website Wysokie Napiecie showed.
Problems in mining, which, despite falling production and slowly decreasing coal use in the power sector, still employs some 100,000 people, are a worry for PiS three months ahead of the presidential election.
With polls suggesting a super tight run-off vote between the incumbent Andrzej Duda and one of several opposition candidates, PiS is wary that angry miners could tip the election result to the party’s disadvantage. Without Duda in office for another five years, PiS’ agenda is set to crumble, as the party lacks a majority in parliament to overturn a veto from an opposition president.
Unions are demanding a 12% pay hike in 2020 and that the government address the problem of faltering sales. If the government does not meet their demands, unionists will rally in Warsaw on February 28, a potentially explosive event in the middle of a heated presidential campaign.
“We hope that this week we can meet with the government representatives because the issue of a salary rise is still unsolved. We also want to know what Poland’s future energy mix will look like,” Boguslaw Hutek, the head of coal trade union Solidarity, told Reuters.
Production of hard coal decreased to just 62mn tonnes in 2019, down 19.5% versus 2009. Apart from mild winters and competition from cheap coal from abroad, demand is also under pressure from the development of gas and renewables. In 2019, the share of coal in Poland’s energy mix dropped to an all-time low of 74%.
Coal’s share in the energy mix appears slated for steady decline with the PiS government laying out plans for the development of offshore wind power in the Baltic Sea by the end of the 2020s. The country’s first nuclear power reactor is also planned for the early 2030s.
Poland is the only EU member state that is opposed to the bloc’s ambition of becoming carbon-neutral by 2050. Warsaw says coal is too important for its energy security and economics, so Poland will have to wean itself off the dirty fuel along a longer timeline.
PGG is not listed and therefore is not obliged to present regular financial information but its investors are listed state-controlled utilities, which control 59% of PGG. In their recent stock exchange reports, the four companies – PGE, Tauron, Enea, and Energa – said they wrote off PLN469mn (€110mn) on the back of PGG’s poor performance.