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Poland will seek financing for its biggest coal miner

Poland will seek to secure financing for European Union's largest coal miner Kompania Weglowa and plans to replace old mines with more efficient ones, energy minister designate Krzysztof Tchorzewski was quoted saying in newspaper Gazeta Wyborcza on Saturday.

"My first actions will lead to ensuring financial liquidity for the company

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," Tchorzewski told daily Gazeta Wyborcza. "First of all we need to solve the problem of wages. I can promise to do everything so that they are paid out."

Loss-making Kompania Weglowa, which employs about 50,000 people, is struggling because of a fall in coal prices and high production costs.

Poland's outgoing government had tried to bail out the group but ultimately failed to find investors. Poland's Law and Justice (PiS) party, which won last month's elections, based part of its campaign on saving the industry.

Poland generates nearly all its electricity from coal but low prices have hit the mining sector and left the incoming government with the task of figuring out how to support mining.

Earlier this week, Grzegorz Tobiszowski, responsible for coal issues in the new government, told Reuters that Poland could temporarily cut output at several mines over the next four to five years to take surplus coal off the market.

He said that consolidating state-owned power producers, mainly running on coal, could be considered as a next step to prop up the mining industry.

In the Gazeta Wyborcza interview Tchorzewski said: "90 percent of energy still comes from coal and in the nearest future will come from coal ... there is no talking about winding down coal mining."

He added that those deep shafts where mining was ineffective, should be closed. But new mines should be built as replacement

source: http://www.reuters.com