The scale of the crisis in the coal mining sector is evident, as last year, the industry received 7 billion PLN in taxpayer-funded subsidies while still recording a net loss exceeding 11 billion PLN.
It was clear that the positive result in 2023, when net profits reached 4.8 billion PLN, was misleading. The situation simply returned to its usual state of financial disaster at the taxpayer’s expense, a consequence of delaying the closure of unprofitable mines that continue to operate at the cost of the few mines that are barely breaking even.
“If we calculate the annual subsidy to the mining sector per average family, we are approaching 1,000 PLN coming out of our pockets,” said Bartłomiej Derski, an expert at WysokieNapiecie.pl, in an interview with MarketNews24. “Roughly one in ten PLN paid into the state budget as personal income tax is now being allocated to these subsidies, which amounts to enormous sums.”
Last year, coal production dropped slightly—from 42.5 million tons to 41 million tons. However, the 7 billion PLN in subsidies allocated to reducing output had little noticeable effect.
Coal prices steadily declined throughout the year, with the average price per ton falling from 665 PLN in January 2024 to 598 PLN in December. Sales revenues dropped by one-third—from 37.9 billion PLN in 2023 to 25.4 billion PLN—while costs increased from 48 billion PLN to nearly 54 billion PLN.
One of the most critical indicators is productivity. Last year, the amount of coal mined per employee was 577 tons, down from 626 tons the previous year. While the latter figure was already significantly lower than the productivity levels of coal mines in other countries, last year’s results appear even more unsustainable. The only slight consolation was a reduction in workforce by 2,000 employees, bringing total employment to 74,114 workers.
“This year will be even worse for Polish mining because coal prices on global markets continue to fall,” Derski added. “Today, the cost of coal extraction in Poland is already twice the market value of hard coal. Although 9 billion PLN in subsidies has been planned for 2025, it may prove insufficient, and by autumn or early winter, the government might be forced to increase subsidies by several billion PLN.”
Source: Manager Plus
