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Shut down report expected mid-April

AN expert team examining the need to shutdown Polish coal mines will report back to the Economy &...

Staff Reporter

Polish Deputy Economy Minister Marek Kossowski told Interfax last week that the report was originally expected in March.

The group, set up by the ministry in December, is analyzing total demand for coal and the sense of maintaining the current number of coal mines. The government was forced to seek external intervention after a December plan to shut seven of the worst performing mines was scuttled by unions.

The government hopes to simultaneously restructure coal mining and generate alternative programs that could absorb coal miners affected by the restructuring of their sector.

Between 2003 and 2006 job cuts of 27,200 are planned, based on natural attrition of 21,200.

Polish coal extraction levels fell a slight 0.3% in 2002 to 103.5 million tons. Coal production had been predicted to stay roughly flat at 102 million tons in 2002 against the 100 mln tons assumed in the 1999-2002 coal industry restructuring program.

Coal in Poland is protected by a number of trade barriers and is considerably more expensive than coal bought on world markets. At the same time, the financial situation of Polish coal mines is desperate, with total debt in the industry put at PLN 22.5 bln.

At the beginning of the year Polish President Aleksander Kwasniewski signed into law restructuring legislation that maintained privileges like the fact that mining companies cannot be declared bankrupt. This was as a result of the lack of a new package and the expiring of previous restructuring legislation at the end of 2002.

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