Coal news and updates

Poland appoints former Citigroup banker to revamp coal sector

Wojciech Kowalczyk, a former banker and deputy finance minister, will take the leading role in restructuring Poland’s ailing coal industry, Prime Minister Ewa Kopacz said.

Kowalczyk, who is currently the deputy treasury minister responsible for the development of the nation’s capital market, worked at Citigroup Inc., Merrill Lynch & Co. and state-owned Bank Gospodarstwa Krajowego from 1995 to 2012. He oversaw government bond sales as deputy finance chief from 2012 to 2014.

Poland relies on coal for 90 percent of its electricity production, one of the highest proportions in the European Union and giving the coal industry a dominant role in the country’s energy security. A plunge in coal revenue has deepened losses in the industry, triggering labor unrest amid the threat of industry restructuring to reduce costs.

“We won’t fix Polish mining without investments, but we won’t carelessly pour money into it,” Kopacz told reporters after meeting with labor unions at the country’s largest miner, Kompania Weglowa SA. “We don’t want to come back here in one, two or three years to talk about current issues.”

Polish coal miners ran up a combined 772 million-zloty ($229.1 million) net loss in the first half, compared with profit of 16 million zloty a year earlier, according to Economy Ministry data.

Kompania and JSW SA, the second-largest Polish coal producer, delayed Eurobond sales this month because yields demanded by investors were deemed too high. The third-largest miner, Katowicki Holding Weglowy SA, is proceeding with a planned offer.

“I hope that Kowalczyk will be able to implement strong, fast and deep cuts in the mining industry,” Pawel Puchalski, head of equity research at Bank Zachodni WBK SA’s brokerage, said by phone today. “He needs the full support of Prime Minister Kopacz to do it.”

Source: Bloomberg