Mining to Poland
Trends and opportunities
Poland has a long mining tradition - the Karolina mine in the Silesian coal region opened in 1788. As of 31 March 2014, the mining sector’s annual value of production is approximately PLN22 billion in deposits (excluding mining company assets) and employs approximately 105 000 people. (Source: Polish Ministry of Economy Coal Mining report (PDF), May 2014)
The major commodities mined are hard coal, lignite, copper and sulphur. The mining sector is supported by large mining equipment, technology and services industry and specialist education, research and development organisations.
The varied mineral deposits are concentrated mainly in the southern upland regions and adjacent areas. The most important mineral resource is hard coal, most of which is located in Upper Silesia and the Lublin coal basins. Poland also has significant deposits of lignite, located mainly in the basins surrounding the cities of Turoszów, Konin and Bełchatów.
Sulphur and copper are the most important of the country’s non-fuel mineral resources. Some of the world’s largest sulphur deposits are found near the city of Tarnobrzeg in the south-east and large reserves of copper are located in Lower Silesia. Important reserves of zinc and lead are found in Upper Silesia. Other minerals of economic importance are rock salt, potash, iron ore and gypsum.
Poland is the ninth largest coal producer in the world and is the largest in the European Union (EU) and will remain one of Europe's largest coal producers as the country continues to rely on domestic coal output for 92 per cent of its heat and electricity generation. (Source: Eurostat, ‘Energy Transport and Environment Indicators’ 2013)
The nation’s exploitable coal reserves are estimated to be 191 billion tonnes. Large-scale coal reserves are considered strategically important from an energy security perspective. The government is supportive of the coal industry and envisages that it will remain a key energy source for the medium-term; however, it acknowledges that efficiency in the sector needs to be improved (Source: Euracoal, Poland country report, Dec 2014).
Commercially workable hard coal reserves are located in the Upper Silesian basin and the Lublin basin in the east of Poland, with the Upper Silesian coalfield accounting for 93 per cent of the total exploitable reserves. The coal reserves in this region contain some 400 coal seams with thicknesses of 0.8 to 3.0 metres, about half of which are economically workable. Some 56 per cent of the workable coal reserves consist of steaming coal, while the remaining 44 per cent are coking coal (Source: Euracoal, Poland country report, Dec 2014)
Location of major coal basins in Poland
(Source: Polish Geological Institute, 2011)
All hard coal is deep mined at an average working depth of some 600 to 1200 metres. Extraction is fully mechanised, with over 90 per cent of coal produced by long wall mining. The run-of-mine coal from underground operations contains discard and requires preparation. In the past, only coking coal was cleaned to meet international quality standards. The expansion of existing coal preparation plants and the commissioning of new facilities in recent years, has led to an improvement in the quality of Polish steam coal, which now meets world market requirements.
Poland supplies about 16.4 million tonnes of hard coal per year to the EU markets. Mainly steam coal is sold which accounts for 86 per cent of total Polish coal shipments to the EU markets, which is transported by rail and sea. Hard coal output in Poland constitutes over 50 per cent of the EU output. This hard coal production comprises steaming and coking coal which represents 59 and 39 per cent of EU total output respectively (Source: Euracoal, Coal Industry Across Europe Report fifth edition (PDF), Nov 2013).
Poland’s lignite is used predominantly for the power generation sector and is mined by open-cast methods. Two of these operations are located in central Poland and a third one in the south-western region of the country. In 2013, total lignite production reached 65.9 million tonnes, 99.7 per cent of which was used by mine mouth power plants. Lignite fired power stations generated 32.1 per cent of total power generation in Poland.
The Bełchatów basin, which incorporates two lignite fields, is situated in central Poland. The open-cast mine is expected to remain in operation until 2038 and supplies the 4400 MW Bełchatów power plant, which provides 20 per cent of Poland’s power requirements. The countries lignite mining areas are expected to maintain annual production output at current levels of around 60 million tonnes as lignite is expected to play an important role in Poland’s energy supply until at least 2030 (Source: Euracoal, Poland country report, Dec 2014).
Government policy for the industry is based the following specific objectives:
- ensuring energy security of the country by satisfying the domestic demand for hard coal, including utilisation of coal for production of liquid and gaseous fuels
- maintaining competitiveness of Polish hard coal in conditions of free market economy
- ensuring stable deliveries of hard coal of the required quality to domestic and foreign customers
- utilisation of modern technologies in the hard coal mining sector to improve price competitiveness, occupational safety, environmental protection and to create the basis for technological and scientific development in particular in the Silesia and Małopolska region.
Australian organisations can offer solutions to assist the Polish coal sector, as it undertakes extensive transition and modernisation. Australian expertise is acknowledged and valued by local coal producers, partnering with local companies can assist the local industry to improve its operational efficiency, mine safety and deal with the significant issue of methane extraction. Areas to consider are:
- mine planning and optimisation
- equipment and services to support modernisation including automation, underground communication systems and other technologies
- improved drilling technologies, especially directional drilling and navigation capabilities
- efficient coal-bed methane extraction, collection and utilisation
- CO and CO2 detection and monitoring (both for central and personal applications)
- mine safety
- training including efficient, safe mining practices and mine induction
- personnel management, including individual worker/staff tracking systems, work cycle management and payroll systems
- environmental remediation.
With extensive mining equipment, technology and services expertise, there are significant opportunities for Australian firms to assist Poland’s coal sector to improve operational efficiency.
For further information download 'Opportunities for Australian organisations in reform and modernisation of Poland’s coal sector' (PDF).
Poland’s coal sector is facing significant challenges due to relatively high costs of production from its deep underground mines. Currently, the cost of production in many coal mines is in excess of global prices and local production is being displaced by lower price imported coal. This situation is particularly acute in the thermal coal sector and as a consequence, the sector is restructuring and reforming as it seeks to better align production costs to global prices. The sector is experiencing considerable stress with a number of mines and mine companies experiencing loss making conditions.
The majority of coal mining companies with the exception of Lubelski Węgiel ”Bogdanka” are owned by the Polish Government. However, it is expected that the remaining producers will be privatised in the coming years.
Tariffs, regulations and customs
All business entities in Poland, including companies with foreign capital, have equal access to foreign trade operations. Generally all goods and services can be traded without restrictions, though there are some exceptions. A license is required for imports and exports of products and technologies for the police and military sector, such as explosives, weapons and ammunition and their parts and accessories.
Australian companies seeking opportunities in the Polish mining sector should be aware of the National Geological and Mining Law, the main document governing the mining legislation. The basis of which the Minister of the Environment grants concessions for:
- prospecting or exploration of basic minerals (e.g. oil, gas, coal, lignite, CBM, ores of precious metals), brines, curative and thermal waters and all minerals located within the boundaries of the maritime areas of Poland
- non-reservoir storage of substances and disposal of waste in the subsurface
- concessions for other minerals, including common minerals (such as sands, gravels, limestones, sandstones), are granted by local authorities.
Marketing your products and services
Due to most of the Polish mining companies being state owned, all Australian METS companies wanting to supply mining products and/or technologies must go through a Public Procurement Process and have to be ready to submit a tender offer.
The required procedure and documentation will be specified in the call for tender request. Imported mining equipment must have the required EU certification documents. First comers to the Polish market and the European Union need to approach the following local institutions to clarify requirements regarding certification and safety testing:
UDT Technical Approval Department
WUG – State Mining Authority
GIG – Central Mining Institute
The coal mining industry and exporters have efficient infrastructure at their disposal, with cross-border rail links to neighbouring countries and to Baltic Sea ports for export. These comprise Gdansk, Świnoujście, Szczecin and Gdynia. Only Gdansk is able to accommodate large Panamax vessels. Hard coal exports from Poland totalled 16.4 million tonnes in 2013 and about half of these were transported by land to neighbouring countries, while the remaining volumes were trans-shipped via the Baltic ports mainly to Germany, UK and Ireland.
Links and industry contacts
Major coal companies
Kompania Weglowa S.A. (hard coal)
Jastrzebska Spolka Weglowa (JSW) - (coking coal)
Katowicki Coal Holding – (hard Coal)
Lubelski Węgiel „Bogdanka” S.A. - (hard Coal)
PGE Gornictwo i Energetyka Konwencjonalna Spółka Akcyjna („PGE”)
Government, business and trade resources
Ministry of Environment
Ministry of Economy
Polish Information and Foreign Investment Agency
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