Poland’s biggest coal miner says only has enough cash to pay salaries until July
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Poland’s biggest coal miner, state-run PGG, has enough cash to pay salaries until July as it struggles with a crisis aggravated by the coronavirus pandemic, its chief executive Tomasz Rogala told Reuters, adding that the industry faces a change.
The sector in Poland, which generates most of its electricity from coal, is grappling with falling demand, rising stockpiles and coronavirus cases among its miners, which forced the temporary closure of some PGG mines in May.
Trade unions agreed on a 20% cut in pay and hours in May, which made PGG eligible for government help.
“In June, on the basis of forecasts, we will present how we want to survive to the end of the year, while until July we are secured when it comes to payments for employees,” said Rogala, who became CEO in 2016 during the last industry crisis.
“Now we are talking about a bust, a sudden collapse. A part of the economy switched off day to day and stopped buying electricity, and on top of that COVID hit the coal mines,” restructuring specialist Rogala added.
PGG needs to know exactly what demand to expect from the utilities, which buy around 18 million tonnes of its 30 million tonne annual coal production, Rogala said.
“If they were to terminate our contracts well in advance, we could prepare, move production and conduct a reasonable restructuring, which consists in closing those assets that are not needed,” the CEO said, adding that depending on the economy, PGG’s coal output may fall by 2-4 million tonnes this year.
Rogala said that the industry faces a “positive time of change” due to market conditions “here and now”
