The Polish government and worker unions have agreed to permanently close two thermal coal mines of state-owned Polska Grupa Gornicza (PGG) in 2021. The move is part of a tentative plan to wind down PGG operations in the next decades gradually. Under the agreement, PGG will discontinue operation at its Wujek mine and Pokoj mine.
Wujek is PGG’s smallest mine with a capacity of below 1 million tons/year. Meanwhile, Pokoj is one of the company’s three mines in Ruda Slaska town. The government initially planned to close all of the three mines, but it prompted strike action by workers. Both mines have been the company’s loss maker since 2019.
Both parties also agreed that PGG would end operations at all of its 30 million tons/year coal mining capacity by 2049. The government promises to give employment guarantees to all PGG workers until the retirement age, but it depends on European Commission approval on EU competition regulations.
PGG is Poland’s largest coal producer who is struggling with high inventories despite cutting output by 15% to 35.8 million tons in the first eight months of 2020. Demand from utilities has been weak partly due to the coronavirus pandemic. At the same time, utilities prefer burning imported coal with higher calorific value than domestic low-energy coal grades. Russia is Poland’s largest coal supplier, with nearly 4.4 million shipped between January and July.
