Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Polish authorities and unions reacted with anger after the European Union’s top court ordered an immediate halt of a coal mine near the Czech border, endangering 7% of the country’s electricity production.
The EU tribunal ordered Poland to halt lignite extraction from the Turow mine, owned by state-controlled PGE SA, until a final ruling is issued in the case over environmental concerns brought forward by the Czech Republic. PGE warned that a permanent stop of the facility could mean closing a nearby power plant that supplies power to about 3 million households, leading to losses of 13.5 billion zloty ($3.7 billion) and the incomes for about 80,000 people, including workers and their families.
“This is an attack on Poland,” Wojciech Ilnicki, a Solidarity union leader in Turow, told Radio Zet. Workers are planning a blockade of the road to the Czech Republic as part of the protest.
The tribunal’s ruling comes during a week when Poland experienced one of the biggest grid failures in recent history
Michal Wojcik, a minister at the prime minister’s chancellery, said the court’s decision is a “scandal” and that its costs will be “huge.” Public television, run by a former ruling-party lawmaker, said the court decision “further undermines” Polish support for EU institutions.
Last month, PGE said that a negative ruling could be a threat to Poland’s power system. On Friday, PGE said on Twitter the decision is a “path to a wild energy transformation.” It re-tweeted its head of legal affairs, Arkadiusz Koper, saying that the execution of the court order is not feasible as Poland, which is the sued party in the proceedings, can’t force a corporation to stop legal activity.
Poland, the EU’s most coal-dependent country, is counting on the bloc’s new Just Transition Fund to help it steer away from the dirty fuel as it’s struggling to meet the climate goals. It has argued it needs to the money to help persuade people living in the mining areas to support the change. The court’s decision to close the mine immediately could hinder that process.
“It appears sufficiently likely that the continuation of lignite mining activities at the Turow mine before the final judgment is delivered is likely to have negative effects on the level of groundwater in Czech territory,” the EU Court of Justice said in a statement on Friday.
The Czechs argue that the mine, based several kilometers their border, has a negative impact on local water. They say its permit for operations infringes European Union law.
Czech Environment Minister Richard Brabec called the decision the “first big victory” in the Turow case. “I’m very happy for all our citizens and thankful to all who are helping us in the legal battle for our environment,” he said.
PGE shares reversed gains to plunge as much as 7.9% in Warsaw. Poland’s Climate Ministry wasn’t immediately available for comment.
The tribunal’s ruling comes during a week when Poland experienced one of the biggest grid failures in recent history, which forced it to halt almost the entire lignite plant in Belchatow, the largest such facility in the EU. The closing of Turow, which just started operating a new 498 megawatt unit, could mean Poland will need to import more electricity from abroad.
(By Maciej Martewicz, with assistance from Peter Laca)
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