As Dziennik Finansowy reports, this will not be a sole investment. Already the Czech-owned CEZ, Tauron and Electrabel are thinking of following suit.
The investment comes at a time when demand is high. Today the energy sector uses up to 50 mln tons of the primary commodity. Within 10 years the amount will rise by 6 mln tons. Reported by Dziennik Finansowy, 8 mln tons is bought up by the steel works at ArcelorMittal Poland alone. It often has to import the coal from Argentina as the Polish mines cannot meet the demand.
If Poland is to remain free from depending on the import of coal from Russia, at least two new mines need to be opened.
The new mine is to open in Bzie-Debina near the Zofiowka mine in Jastrzab Zdroj. Works on the shaft have commenced. JSW estimates the cost of the investment at the moment is 6 mln zloty. The mine is said to provide coal for the next 48 years. The investment is to come from the company’s own capital and from shares (IPO set for 2008). Large investments, however, into the coal mining sector will heavily depend on EU regulations.
Currently the European Union is opting for a renewable energy approach. This may change as research shows that wind and water-powered energy alone will not meet the demand of the EU member states.
If coal was to relive a renaissance in the energy sector, the mining industry would greatly improve. The industry lately had a short-lived period of prosperity between 2004 and 2005, but is again entering crisis mode. With each year the profit margin has fallen by half for Poland’s largest mining company, JSW. It is Poland’s largest mining company. The competing Kompania Weglowa mine has been subsidizing each ton of coal mined by several zloty since last year.