Excellent Analysis of Inevitable Bankruptcies in the Polish Coal Sector

The politicians cannot face the truth. But every good analyst already knows the outcome of the faltering coal sector in Poland. Less coal needed every year, higher priced domestic coal-fired electricity than our neighbors energy prices, most mining of coal cost more per ton than the market value, massive negative cash flows from the state-owned mines..... the end will not be pretty.

This latest detailed article in "High Voltage" lays out the numbers.

By connecting the electricity utilities owned by the state to the mines going bankrupt the Government has basically used the financial resources of the utilities to achieve a political goal which will have a bigger economic price tag every year, before it hits bottom. The state-owned utilities have already signaled the same inevitable problem with their aging coal blocks as we have seen in Western Europe - a write-down of unprofitable assets. This occurs in the face of the Polish energy sector needing over 100 billion PLN to re-structure, re-build and re-organize.

Throw in the animosity of the Polish parties to international financial investment in the sector and the future seems more than a bit problematic.


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