Salary expenses at the Polish mining group rose last year. By up to 25 percent (+PLN 1.2 billion) and PLN 6 billion was spent on it, despite a 6% decrease in employment. Coal prices were so high that the mine still made good profits, ending the year with a consolidated net profit of PLN 2.5 billion. This is all great, but… A year ago it lost PLN 3.8 billion, and still has up to PLN 4.8 billion of uncovered losses after last year, and coal prices have fallen significantly since last year.
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The state-owned company employs 36.6 thousand. person and within a year the average salary rose from PLN 10.4 thousand. The employer costs PLN up to PLN 13.7 thousand, which translates into PLN 8.1 thousand under the employment contract. Net PLN, i.e. PLN 1.4 thousand more PLN y/y (+33% y/y).
Coal prices allowed for this, the point is The situation has changed dramatically. “The coal mountain is growing and there is no one to sell it to, but the prices of Polish “black gold” are not falling,” the portal warns. wysokienapiecie.pl.
“In Poland, the price shock was milder than in the world – prices rose in the PSCMI1 index [w ub.r. – red.] From PLN 13 per gigajoule (PLN 290 per ton) to PLN 33. but How much have prices fallen in the world? [w bieżącym roku — red.] By more than half, Poles do not want to fall. “It probably won’t go down anymore, because miners are used to higher salaries,” the article’s author says. In August, the price of coal for the power industry (PSCMI 1) from Polish mines was the lowest since February and amounted to PLN 703 per ton.
The price of coal is very high, and miners are very expensive to mine
Last year, PGG crews recovered 28.3 million tons of mined material, of which net coal production was 22.3 million tons, and 21.9 million tons were sold. But the farther you go, the worse the sales are. According to the Katowice Industrial Development Agency, coal reserves at the end of August amounted to 3.8 million tons, more than tripling year-on-year. But a year ago prices were very low, and there was a shortage of coal, so what does the comparison look like two or three years ago?
The transcript continues below the video
Two years ago, shares were 16 percent higher. Compared now, three years ago by 108%, and four years ago by 29%. higher. There will no longer be a need to import coal from abroad, but rising stocks indicate problems in sales, that is. About the very high price of domestic coal by world standards. The miners have to pay for their increased wages one way or another. Power plants will be more willing to use cheaper imported coal at $130. per ton of ARA (PLN 555 at the Polish National Bank exchange rate). However, Polish mines that are mined from great depths cannot lower prices much because their efficiency is very low.
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According to Wysokinapiecie.pl based on the Global Energy Monitor report, The average Polish miner extracts the least amount of coal in the world. In our country, it takes 822 miners to extract one million tons of coal annually, while in India it takes half that number. In the United States and Australia, fewer than 100 miners produce 1 million tons annually. And Although the Polish miner extracts one-tenth as much as the American miner, he earns only half that amount. Labor costs are the main element that affects the final selling price of coal. This is not the fault of the Polish miners, but rather the degree of mechanization and the seams they have to work on. The greater the depth, the lower the efficiency. Some mines should be closed.
As the article stated, the Polish government had concluded an agreement with mining unions to phase out mining until 2049. “The agreement assumed that the budget would support losses in mining companies – it was called subsidies to reduce mining. But it was a quid pro quo – salaries” The number of miners In companies covered by the program it increases only due to the inflation rate,” we read.
“It turned out that although the government provided the funds, it had no intention of enforcing the second condition. Salaries at PGG increased By more than 20%, bringing the inflation rate to 14.4% in 2022.” – he added. In fact, the journalist was mistaken in favor of the mines, because the average net salary rose not “by more than 20 percent,” but by as much as 33 percent. Although spending on wages at PGG increased By 25 percent, the employment rate fell by 6 percent. This means that budget subsidies will either be higher or the mines will suffer losses that must be covered with something.
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