Miners dug a black hole. Soon we will pay PLN 10 billion annually

Luc Williams

For now, all we know is that the government has agreed to include PLN 7 billion in the 2024 budget for subsidies to reduce production capacity. This is what the previous government of Mateusz Morawiecki proposed, although the original version of the budget assumed less than one billion for subsidies. “Radical declines in both current coal prices and long-term price forecasts have resulted in a significant increase in the need for budget funds in 2024, compared to the assumed needs. Due to the above, it was necessary to obtain additional funds to subsidize the reduction of the production capacity of mining enterprises through the issuance of treasury securities. – this is a quote from the justification for the budget-related act prepared by Morawiecki’s government. The new act of Donald Tusk’s government does not provide any justification as to why PLN 7 billion.

PGG, Południowy Koncern Węglowy (formerly Tauron Wydobycie) and Węglokoks will receive PLN 7 billion, which will allow them to avoid bankruptcy. The largest portion (PLN 5.5 billion) will go to the Polish Mining Group.

But all this was compounded by the mistakes made by the previous government last year.

And the costs go up, up, up….

The first is consent to dramatically rising costs. Over the last two years, production in the entire Polish mining industry has decreased by 6 million tons per year (including by 1.5 million tons in PGG), although this was not due to any decision from Brussels. At the same time, the cost of wages, allowances, salaries and bonuses only in the largest Polish Mining Group increased by PLN 2.8 billion. The average salary with all allowances and bonuses at PGG (calculated as the employer’s expense) increased from PLN 10.7 thousand. PLN in 2022 to 17.1 thousand PLN gross per month. Since 2021, the costs of materials and energy have also increased by over PLN 2.2 billion, but in such a situation it was even more necessary to keep wages in check.

According to the so-called under the social agreement, wages were to increase by 3.4-3.8 percent. above inflation. Trade unionists took advantage of the government’s compliance and in March 2022, a more favorable wage increase mechanism was negotiated – 1%. above inflation.

But then increases were negotiated individually in each mining company, which were even higher, and the government obviously agreed (elections!). Unions do not have to worry about the situation of their companies, because the budget will always add…

Why has imported coal become cheaper and domestic coal has become more expensive? What are realistic scenarios for mining? Read on the Wysokie Voltage website.


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