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The Warsaw Voice » Business » April 30, 2014
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Polish miners call for state aid
April 30, 2014   
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Miners' demonstation in Katowice
Trade Unions at Poland's troubled state miner Kompania Weglowa (KW) Tuesday staged a street demonstration in Katowice, south-west Poland, to demand from the government a rescue plan for the ailing mining sector.

Unionists are concerned that the difficult financial situation of KW, Europe's largest coal miner, may threaten wage payments. They demands for meetings of the trilateral commission to address the matter.

The company suspended coal production from April 28 to May 5 in nine of its coal mines and will limit production in remaining six mines in the coming days in an effort to cut costs and limit production.

The decision to either halt or reduce production for a week was taken by the company board in mid-April because of falling coal sales. According to the company management, falling demand is responsible for 5 million tons of unsold coal.

Miner unionists sharply criticize the decision as in their opinion it will not improve the company condition. During the suspension period, KW employees receive a little over half of their salaries.

In response to the call from demonstrators Polish PM Donald Tusk said that KW must undertake a serious restructuring effort.

In pending meetings with new management and unions, Tusk expects "very brave decisions," Tusk told a Tuesday briefing.

"You can see with a blind eye that tough decisions, including restructuring, are required."

Kompania Weglowa has suffered both from "objective concerns" regarding KW assets, but also mismanagement and misallocation of funds, Tusk said. Union protests over KW's financial condition are largely justified, the PM indicated.

"In the case of today's protests, the unions are much more in the right than usual," he added.

KW's financial problems are not symptomatic of the industry as a whole, Tusk said. He cited positive takeaways from a recent visit to power group Tauron after it bought a mining asset from KW, a deal with which the PM expressed some satisfaction.

Last year KW lost PLN 1 billion. It employs 55,000 people. The implementation of a restructuring program is planned to produce savings of PLN 1.2 billion until 2020. On Saturday Miroslaw Taras was elected new KW CEO.
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