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The Warsaw Voice » Business » January 31, 2013
CENTRAL EUROPE ENERGY PARTNERS
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One Size Does Not Fit All
January 31, 2013   
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Jarosław Zagórowski, president of Jastrzębska Spółka Węglowa (JSW) and vice-president of Central Europe Energy Partners (CEEP)—an international non-profit association that aims to facilitate integration in the energy sector in Central Europe and strengthen the position of this sector in the European Union—talks to the Voice about energy solidarity in the EU and about the prospects of Poland’s mining industry.

What can Poland’s mining industry offer the European Union?
First of all, secure access to carbon and its resources—the raw material for the energy sector. We are talking about solidarity in a very mature form in an integrated Europe. In spite of the not-very-favorable EU policy towards coal nowadays, coal will still occupy the leading position in Poland’s energy mix, largely due to the historical development of the country’s energy system based on domestic coal and lignite resources.

It is of crucial importance to convince the EU that a “one-size-fits-all” policy does not in fact fit all EU countries. Natural resources vary, so there is a diversification when it comes to energy systems; Scandinavia relies on water, France on nuclear energy, Denmark on wind, while Poland and Germany rely on coal. We need to invest billions in the decades ahead to adapt energy systems to cleaner and renewable energy sources.

Does the European Union understand that?
It seems that the EU is increasingly aware that the decarbonization policy is not about eliminating carbon from the energy mix, but about improving the efficiency of energy systems and the implementation of new combustion technologies reducing CO2 emissions.

There are ongoing talks about the dangers ahead for mining in Poland’s southern Silesia region...
Our mining industry is facing threats, but also opportunities for development. However, a key condition for this development is an ability to use all the reserves in the sector.

Today, coal mining has to be prepared for a more difficult period than last year. It will be a time of truth; we will see if last year, which was rather favorable for coal mining companies, strengthened their position or only raised the costs.

Do you think that the costs of production will soon determine the competitive position of Polish coal producers?
Poland is in the EU and there is no possibility of an administrative suspension of coal imports. In most parts of the world, coal is mined by open-cast methods. The only effective defense against imported coal is to maintain the costs regime and at the same time improve the cost-efficiency of mining companies. We should also keep an eye on the level of investment, as an appropriate level of investment in the mining industry creates jobs in the sector and guarantees the energy security of the country.

There’s still room for increasing the effectiveness of Poland’s coal mining sector through modernization, the use of modern and more reliable equipment, improving work organization, and better cooperation with science in order to overcome natural risks.

What are other challenges for the Polish mining industry?
Better time management and work organization are especially important today. This can be achieved through underground transport modernization, reliability and a unification policy as well as continuous improvement in safety standards, notably through awareness and responsible employees.

Despite the inertia in mining companies, the majority of activities should lead to more flexible business and thus better and faster adaptation to the changing economic environment. This includes a diversification of costs to maintain the necessary level of investment at a time of crisis as well as an ability to respond rapidly to an improving economic situation in order to catch up and accumulate funds for worse times. Change is inevitable and must be embraced with understanding by all the parties involved—the work force, trade unions, management, suppliers, customers and the regional environment.

The JSW group is the largest producer of high quality type 35 (hard) coking coal and a significant coke producer in the European Union. JSW’s coking coal is used mainly in the production of coke, which is, in addition to iron ore, the key ingredient of feedstock for manufacturing steel. At its own coke plants, the JSW group processes approximately 40 percent of the coking coal it produces, which enables it to offer a final product that is more processed and of a higher value. The company is also a producer of steam coal, which is sold mainly to power plants and CHP plants.


Factfile
Jastrzębska Spółka Węglowa (JSW) is composed of four hard coal mines, Borynia-Zofiówka-Jastrzębie, Budryk, Krupiński, and Pniówek, where coking coal and steam coal are excavated, as well as the Material Logistics Center. Companies with financial ties to JSW include Koksownia PrzyjaĽń, Kombinat Koksochemiczny Zabrze, Wałbrzyskie Zakłady Koksownicze Victoria, Spółka Energetyczna Jastrzębie, Jastrzębskie Zakłady Remontowe, Jastrzębska Spółka Kolejowa, and Polski Koks.

JSW’s mines contain around 550 million metric tons of proven extractable coal deposits. The group plans to enlarge its recoverable reserves base to 840 million tons. This will enable it to maintain a strong position on international markets for the next 60 years.
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