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06 February 2015 | by Gabor Chodkowski-Gyurics

Legal framework for Polish mines reform enters into force

Legal framework for Polish mines reform enters into force
Controversial plan to restructure Europe’s largest coal miner Kompania Weglowa was given a formal framework with several amendments to the coal mining law coming into force on February 5.

The plan will see Kompania’s four worst performing coal mines undergo a program to improve their standing. The program will be carried out by Spółka Restrukturyzacji Kopalń (SRK), a state-owned company charged with restructuring work. No jobs will be lost, according to the plan, which was agreed with mining unions in late January, following days of protests.

Following the restructuring programme, the four coal mines in question could be sold to investors. There are speculations that interested companies include state-owned coal exporter Węglokoks or Tauron Polska Energia, a major power generation company.

Kompania’s healthier coal mines will be taken over by a new entity, known as Nowa Kompania Weglowa (New Kompania Weglowa) that will be 100% owned by Węglokoks.

The government initially sought to close four worst performing mines that incur about 80 percent of Kompania’s losses. Following protests from trade unions, the government chose instead to restructure the mines and incorporate them into state power companies. The latter are still to confirm whether they are willing to take on new potentially risky assets.

The law will require the European Commission to acknowledge its compatibility with the EU competition law, because the EU rules state that public aid for the mining sector can only be awarded to recoup costs of abandoning the mines.


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