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Polish Coal Industry An analysis

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Page 1: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Polish Coal Industry

An analysis

Page 2: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Development factors

• Resources - 3 main coalfields

• Nearby power plant

Page 3: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant
Page 4: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Why was the coal industry in Poland given back to private

owners?

• Private owners guarantee rational management• Actually only private owners can make an effort

to rationalise costs of output, employment, etc.• Only private owners can be executors of a

restructuring plan• State-owned management generates higher

costs

Page 5: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Forms of government intervention

• Because of increasing costs of output and competitiveness of imported coal and alternative sources of energy (e.g. gas, petroleum), coal industry in Poland nods to its fall. Most often price of coal doesn’t cover costs of output. The difference between costs of output and price of coal is covered by subsidizing this industry. In 2003 subsidies for coal industry amounted to 17 billion PLN (it is about 450 PLN from each citizen).

• Those subsidies are realized by:– Paying off or liquidating debts of coalmines– Liquidating financial commitments, like taxes– Giving special credits, loans for development, benefits for

employees and retirement gratuities

Page 6: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Profitability of coal industry

• Nowadays coal companies absorb lots of money. Government incurs high costs within restructuring plan, assuming liquidating debts. A system of coal companies results in irrational and inefficient management of coalmines.

• Even if the coal industry is not profitable, it is subsidized by government because it can be very important for the power security in the future. Coalmines cannot be closed either, because of social commitments. Eventual liquidation of coalmines would be a long- lasting, complicated process.

Page 7: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Decline of industry:

• Lack of investment to build new coal mines in face of needs, which are assessed at about 3,5 billions PLN by the end of 2010.

• Available resources are predicted to run low in about 15 years.

• Legal difficulties: preparations before establishment of mine

• Trend to close unprofitable mines.• Development of alternative energy sources.• Support of PHARE and similar projects.• Bureaucracy.

Page 8: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Output trends: • Price of coal is going to be stable until 2030, according to European

Energy And Transport Trends.• Poland should take care about quality of coal, to intercept part of

import to EU.• Poland can take advantage of its geographic location to propose

lower prices for transport.• Government plans to implement new technologies in output, such

as liquid petrol. It will also influence environment positively by reduction of CO2 emission, and develop science.

• Plans to be independent in area of petrol, thanks to new technology - profits for Polish economy.

• Modernization and replacement of existing power sources based on coal

• Budget in 2007 on industry- 52 mln PLN.

Page 9: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant
Page 10: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Employment patterns:

• Professional hierarchy. • Reduced pensions.• Lack of qualified boards substituted by

pensioners. • Restructuring - changes in age structure of

employees.• Possibility of reductions in number of

employees.• Need for a new generation of miners.• Two out of ten Poles work in Upper Silesia.• Increasing number of mining catastrophes.

Page 11: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant
Page 12: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Trade patterns:

• Decrease of retail sale and prices of coal.

• Increase of production expenses.

• Polish coal should be rival in prices.

• Danger to companies prosperity.

• Cost of transport.

• Monitoring import to EU.

Page 13: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant
Page 14: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant
Page 15: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant
Page 16: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

Influence on local industry

• GOP- Gornoslaski Okreg Przemyslowy.

Page 17: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

GOP One of the most

densely inhabited areas of country.

Increasing number of unemployed people (effect of employment reduction).

High level of infrastructure.

Environment degradation.

Page 18: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant
Page 19: Polish Coal Industry An analysis. Development factors Resources - 3 main coalfields Nearby power plant

The end. Thank you for your attention.

Magda Tomczak, Karolina Kapala