Poland is preparing a plan to rescue the largest coking coal producer in the EU from the crisis
Photo: Wojciech Balczun / Polish Industrial Development Agency

The Polish government is preparing a plan to rescue the state-owned Jastrzebska Spolka Weglowa (JSW), one of Europe's largest coking coal producers. About said minister of State Assets of Poland Wojciech Balczun in an interview with money.pl.

According to him, the bankruptcy scenario is not being considered, although the company is in a deep financial crisis.

"I do not allow for the possibility of the company going bankrupt, as this could have negative consequences not only for the employees and the region, but also for the entire economy," Balchun said.

He added that the company needs a deep restructuring, which will mean cutting costs and possibly laying off employees.

Various tools are available to employees affected by the restructuring, ranging from voluntary resignations with compensation to retraining.

"The basic principles of the restructuring program are ready, but it is the responsibility of the company's management board to present them, which is currently negotiating with the social side (trade unions)," Balchun said.

At the same time, the government will not be able to directly provide financial assistance to the company, as this requires the permission of the European Commission. Several scenarios are being considered, including the possibility of support through the Bank of the National Economy (BGK) and the Polish Development Fund (PFR).

Among the possible steps are the sale of non-core assets and the search for new markets, particularly in the defense and steel industries.

JSW supplies coking coal to steel mills in Poland and abroad. But falling global commodity prices and high costs have led to a sharp deterioration in the company's financial results.

In 2023, an additional blow came in the form of a PLN 1.6 billion "solidarity tax" imposed by the previous Polish government.

"The outbreak of the war in Ukraine caused a temporary spike in coal prices, and the company's profitability increased, but the management at the time completely lost control of costs," Balchun explained.