The Polish Prime Minister

There is no coal in Poland, but the prime minister found a solution. He “ordered” state-owned companies – PGE Paliwa and Węglokoks – to buy 4.5 million tons of coal as an “emergency”, i.e. by the end of August. experts were asked whether it would be possible to implement Morawiecki’s recommendation so quickly.

Prime Minister “orders”

The promise of the prime minister is ambitious. Mateusz Morawiecki ordered State Treasury companies to “urgently purchase” a total of 4.5 million tons of coal. The head of government did not give the companies too much time – the purchase is to be completed by the end of August, and the raw material is to be imported to the country by the end of October. The companies assure that they are already working on purchases.

Will they make it? – Is it possible to bring it to Poland? Theoretically yes, but I’m afraid it’s part of the government’s agenda “we want it to.” Coal is available on the world market, so it definitely plays in our favour. However, it is expensive, and the closer to winter, the more expensive it will be. So it may simply cost us a lot – says Business Insider Krzysztof Kilian, former president of Polska Grupa Energetyczna.

Krystian Brymora, an analyst at Dom Maklerski BDM SA, reminds that prices on global markets already reach $ 400. per ton. That’s not all, because you have to add transport costs. The expert estimates that each ton of coal purchased by the companies will cost us about PLN 2.2-2.5000 zloty. Therefore, we will pay PLN 10 or 11 billion for 4.5 million tonnes, taking into account the current prices. These will probably change soon – of course to a higher one.

Prices may increase, because the EU embargo on Russian coal will enter into force only on August 10. Everyone is already securing themselves for the harsh winter and the lack of gas supplies from Russia – adds Brymora.

It will be difficult to obtain a “discount”. – You also have to remember that we are not the only ones. Other countries also urgently need coal. Germany, the Czech Republic, Greece, Estonia … And it goes without saying that, for example, the German economy is stronger, so it has more opportunities. It is so, that when we stand in a queue and a two-metre-tall bully comes, he can push himself out. And the smaller ones are not necessarily – says Krzysztof Kilian.

Who will bring the coal?

Money, even such gigantic ones, will probably be found in state-owned companies. But will Polish ports handle the unloading, especially if everything has to be completed on October 31?

We can certainly talk about “bottlenecks”, for example in ports or on railways. Since April, logistics has been heavily burdened with handling deliveries to and from Ukraine, so in this situation everything will be even more complicated – says Brymora.

Krzysztof Kilian, in turn, has doubts whether it will be possible to find ships that will transport so much coal at all. – It is difficult to say whether adequate bulk carriers are available. As we know, after the global transport “started” after the lockdowns, the availability of ships in the world is not so great – says the former head of PGE.

A lot also depends on where Polish companies will find coal. China is by far the largest producer of the raw material. So theoretically, it would be easiest to get him. However, transport routes from the Middle Kingdom are still disrupted, and in addition, new COVID-19 waves may hinder such supplies. The country has a “zero COVID” policy, and this could lead to, for example, closing key ports.

However, we can also import coal from India, Indonesia, the USA or Australia – these are the key producers of this raw material in the world. Although it is possible that we will find suppliers in Europe.

The situation is complicated by the fact that Poland has long been dependent on coal from Russia. In 2021, 65 percent of this market was generated imported coal.

Why are we not buying coal with Germany?

Krzysztof Kilian does not understand why Poland carries out such an operation “individually”. – It is better to simply act together, in a group of EU countries we would simply have more opportunities he says.

And he adds that there are many possibilities for cooperation with other countries. – We can operate, for example, through the EURACOAL association, an organisation associating hard and brown coal producers in the European Union. Through this organisation, one could put pressure on the European Commission. In a word – group activities have a greater chance of success than our individual purchasing attempts – indicates Kilian.

However, experts add that they “keep their fingers crossed” for purchases of companies. A difficult winter is ahead – the Kremlin’s turning off the gas tap to Europe seems very real. So coal will be at a premium. Especially for over a million households that heat their homes with it.

Source: BusinesInsider



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