Poland's PGE does not rule out including hard coal mines in group

28th September 2015 By: Reuters

WARSAW – Poland's largest utility PGE is open to the possibility of including restructured hard coal mines in its group, PGE's CEO Marek Woszczyk said on Monday.

Asked if he envisaged including hard coal in PGE's value chain, he said: "If we are able to build this value chain according to a similar model as with lignite, then why not.

"However, restructuring is key here," he told reporters.

PGE owns a lignite mine near its power plant in the central city of Belchatow.

The treasury ministry, which oversees the mining sector, has already offered state-controlled utilities a chance to take over unrestructured, loss-making mines but the companies had shown little interest.

So far, only a special purpose vehicle involving state-controlled utility Tauron has filed a token-sum bid for one hard coal mine, Brzeszcze, conditional on prior restructuring of the mine.

The state mining restructuring firm SRK, which now owns Brzeszcze, said on Saturday that it was hard to see the bid as "respecting the interest of the state treasury".

Last week, the Polish treasury ministry confirmed it had withdrawn a rescue plan for the ailing state-owned coal miner Kompania Weglowa (KW) because the European Commission was unlikely to approve it.

Kompania is currently working on a bridge financing deal through prolonging a "standstill" agreement with the banks, aiming to win more time to find investors.

Analysts said the government would probably not allow KW's bankruptcy before parliamentary elections set for October, because it needs the votes of miners in the Silesia region in the south of Poland.