Poland’s coal industry in irreversible decline as mines eye exports to Ukraine

Poland’s coal industry is undergoing a structural crisis, marked by falling demand and plummeting prices — a trend analysts believe is irreversible, according to Rzeczpospolita.

Coal prices in Poland have returned to levels last seen before the full-scale Russian invasion of Ukraine in February 2022. In contrast, prices in September 2023 were nearly double those figures. Without significant cost-cutting measures, many producers may soon face bankruptcy.

According to Łukasz Prokopiuk from the brokerage firm DM BOŚ, the commissioning of large offshore wind farms — with a combined capacity of several gigawatts — will further depress coal demand, likely forcing earlier-than-planned mine closures.

"Poland has the highest electricity prices in Europe, largely due to its heavy reliance on coal — a situation made worse by the highest coal production costs in the region," Prokopiuk noted.

The market is also distorted by substantial state subsidies for state-owned mining firms — amounting to as much as PLN 8 billion annually. Private and semi-private players, such as Bumech and Bogdanka, view this as unfair competition and have voiced concerns over preferential treatment given to public mines.

Some companies are attempting to adapt. For instance, Bogdanka plans to maintain annual production at 8.2 million tonnes until 2030, with a gradual reduction to 6.6 million tonnes thereafter, partly by increasing exports to Ukraine.

However, analysts remain skeptical.

"It’s possible to draft strategies for a transforming market, as Bogdanka is doing. But the downward trend in coal demand is irreversible. I'd like to believe in Bogdanka's export ambitions toward Ukraine — it may be the only viable way to sustain sales in the short term. Yet it won't justify continued coal production in the long run. Overall, I remain highly pessimistic about the future of coal consumption," Prokopiuk added.

• In a related development, it was reported in April that Viktor Vyshnevetsky’s company, Coal Energy, is planning to resume coal mining — not in Ukraine, but in Poland.