May 13, 2020 / 11:46 AM / 19 days ago

Czech EPH: exiting Polish coal company PG Silesia is an option

WARSAW, May 13 (Reuters) - Czech energy group EPH does not rule out the option of transferring its shares in Polish coal mining company PG Silesia to the Polish government or minority shareholders amid funding problems, PG Silesia said on Wednesday.

Poland generates most of its electricity from burning coal produced mostly in state-run mines, which are struggling to survive because of low demand for coal and the rapid growth of coronavirus infections among miners.

PG Silesia, the biggest private mine in Poland with 1,700 employees, is considered one of the country’s most cost-effective mines even though it has struggled to minimise losses. It is owned mostly by EPH, with PG Silesia employees and trade union members as minority shareholders.

In a statement, PG Silesia said a “combination of adverse developments ... make it economically unjustified to operate the mine - despite large investments and investor support.”

It said the management board was seeking to ensure the continuity of the mine’s operations until the autumn of 2021.

“However, it will not be possible without good will from both employees and the owner. The owner does not exclude the possibility of transferring its shares - if interested - to the minority shareholders or to The State. But the proposals to meet the Polish government remain unanswered,” it said.

Poland’s State Assets Ministry was not immediately available to comment.

Reporting by Agnieszka Barteczko, Editing by Timothy Heritage

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