July 28, 2020 / 12:05 PM / 10 days ago

Poland's PGG holds talks with trade unions on mine closure plan

WARSAW, July 28 (Reuters) - Poland’s biggest coal producer PGG started talks on Tuesday with trade unions on a package of mine closures and pay cuts, measures the company said were designed to help it overcome the effects of the coronavirus crises.

State-run news agency PAP reported that PGG could close the Ruda and Wujek mines, which employ a total of 7,700 people and produce over 5 million tonnes of coal annually. The state-controlled group employs more than 40,000 people and produces around 30 million tonnes of coal annually.

PAP quoted PGG chief Tomasz Rogala as saying before the meeting started he expected the talks to be “very very difficult”, and cited union leader Dominik Kolorz as saying “this plan is crazy”.

Neither side could be reached for comment by Reuters.

PGG has not yet disclosed details of the restructuring plan but industry sources told Reuters on Sunday the government was seeking deep cuts in coal output and the closure of a number of mines. One source said PGG’s annual output would be reduced by much more than 10% but not by as much as by half.

PGG has been hit by falling demand for coal, lower prices, and by the rising number of coronavirus infections, which led to the temporary closure of some mines in June.

Also, Poland can no longer ignore the European Union’s drive to cut carbon emissions, which has made coal-based power generation more expensive due to rising prices of carbon permits. At the same time miners are having to dig deeper to obtain coal often with lower quality.

Wujek was the site of one of the bloodiest protests during communist rule and is a symbol of the nation’s ties to coal. In June sources said Wujek would be one of the coal mines set for closure in the third quarter.

Trade union representatives signalled that launching the plan may spark massive miners’ protests.

Poland generates almost 80% of its electricity from coal and is the only member of the EU that has not pledged to become carbon neutral by 2050. (Reporting by Agnieszka Barteczko Editing by David Holmes)

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