Poland’s hard-coal mining companies generated over 5 billion zloty (€1.1 billion) in profits in the first half of 2022 – compared to a loss of 1.5 billion zloty for the same period last year – amid rising commodity prices stoked by Russia’s war in Ukraine.
The data, from the Industrial Development Agency (ARP), show that the sector’s revenues in the first six months of this year amounted to 25.9 billion zloty, compared to 13.1 billion zloty in the same period of 2021, reports the Polish Press Agency (PAP).
Wynik finansowy netto sektora górnictwa węgla kamiennego w I półroczu 2022 r. wyniósł nieco ponad 5 mld zł wobec straty ponad 1,5 mld zł w analogicznym półroczu rok temu — podała we wtorek Agencja Rozwoju Przemysłu, która analizuje rynek węgla. https://t.co/WzGF2F9HaY
— Business Insider Polska 🇵🇱 (@BIPolska) August 30, 2022
The sector’s growth was primarily driven by the increase in the price of coking coal. In the first half of 2021, customers paid an average of 388.05 zloty per tonne, while in the first half of this year the average was 2,632.10 zloty. Poland produces around 70% of its electricity from coal.
The World Bank notes that global benchmark prices for coal in June were around three times higher than a year earlier. It cites the impact of the war in Ukraine, which has disrupted trade in energy, including an EU ban on importing Russian coal that was announced in April and came into force in August.
High prices produced profits for, among others, state-owned coal firm Jastrzębska Spółka Węglowa (JSW), which published its financial results on Tuesday. Despite a 9.7% decrease in production, JSW closed the first half of 2022 with a record net profit of 4.2 billion zloty.
Coal and energy companies’ profits have also benefited their employees, who saw their salaries rise by nearly 82% and 33% respectively year-on-year in July. The average increase in the corporate sector as a whole was 15.8%, ahead of inflation by just 0.2 percentage points.
Meanwhile, Polish households – around one third of which heat using coal – are worried about a crisis this winter due to soaring energy prices. This summer has seen some people queuing for days to buy coal ahead of heating season.
In response, the government introduced a one-off subsidy of 3.000 zloty (€630) to each household that heats with coal.
It recently announced that it would also introduce payments to those that use other fuels, and to cap cost rises for district heating plants – the most common form of heating in Poland – at 40%.
Main photo credit: Adriano Ruiz / Unsplash
Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.
