Private coal mines bring profit

Photo: Glowimages

The majority of Poland's coal mining industry, held in the four largest capital groups, is owned by the state.

These four companies have been posting losses over the past years. The largest of them, Kompania Weglowa, recorded a loss of as much as 342.3 million zloty (81.8 million euro) in the first half of 2014.

At the same time, the much smaller privately-owned coal mining sector demonstrates that the industry does not have to mean financial trouble.

The biggest firm in this subsector is Lubelski Wegiel Bogdanka, which had a net profit of 91.2 million zloty (21.8 million euro) in H1 2014.

Maciej Bobrowski, an analyst from brokerage Dom Maklerski BDM, told daily Rzeczpospolita that LW Bogdanka has better geological conditions for mining, as its mines are located in the Lubelskie region and not in Silesia, like those of the state-owned giants. It also uses newer technologies, he said.

“Bogdanka's higher profitability also results from more attention placed on employment costs,” added Paweł Puchalski from Dom Maklerski BZ WBK.

“They are the biggest part of what mining firms spend.”

However, there are privately-owned mines in Silesia that also fare well. They include Zaklad Gorniczy Siltech and Przedsiębiorstwo Gornicze Silesia.

“We feel the impact of low coal prices, but we are able to maintain financial liquidity and we should have a small profit this year,” Siltech CEO Jan Chojnacki told the daily.

He added that his company has better prices and quality than potential competitors importing coal from Russia. (kw/nh)