By Mary Sibierski Jun 30, 2006, 4:00 GMT
Warsaw - It was synonymous with the sooty, grey gloom of communist Poland, but 17 years after the regime's collapse, the coal industry is revitalized and in the pink with capitalist vigour.
Poland's estimated 150-year reserves of comparatively clean- burning, hard, black coal set a solid foundation for energy security in the European Union newcomer amid anxiety over the reliability of energy supplies from Russia, energy experts point out.
A massive cash injection of more than one billion dollars into Poland's once-bloated coal sector has played a crucial role in streamlining and priming it for profit.
'We've sponsored the government's restructuring drive aimed at making the coal sector work on market principles,' World Bank official Roman Palac told Deutsche Presse-Agentur dpa.
Poland, in fact, is a European leader in modernization and restructuring that are key to the future of the coal industry, which produces 40.1 per cent of the world's electricity, according to the World Coal Institute's 2003 figures.
Since 1988, the World Bank-sponsored 'Coal Mine Closure Project' has loaned the Polish government a total of 700 million dollars, including 600 million dollars for 'social mitigation' - mainly cash pay-offs for redundant miners - while the remaining funds were used for mine closures.
In addition, the Polish government has pumped about 600 million dollars into restructuring programmes to stop it draining public coffers.
At present, the right-wing Law and Justice (PiS) government of Prime Minister Kazimierz Marcinkiewicz is formulating plans for further reform, aimed at defining coal's role in Poland's long-term energy strategy, a Treasury Ministry spokesperson confirmed.
Under communism, the country's nearly-half-million coal workers were regarded as the heroic, creme de la creme of the proletarian class, and thus received generous benefits.
However, since the 1989 collapse of communism, some 50 mines have been shut, leaving around 120,000 miners and surface employees working in 30 mines. Some 20,000 more jobs need to be cut in order to meet profit targets.
Professor Andrzej Barczak of the Katowice Economic Academy says it is 'vital' to complete reforms and build up market mechanisms.
'We can't leave this road,' he says. 'Now the sector once seen as excess ballast is looking like a really solid foundation for Poland's energy strategy.'
'Now we're speaking of coal as a fuel of the future, not as a dirty, polluting old ball and chain,' agrees Zbigniew Madej, spokesman for Kompania Weglowa. With some 70,000 workers operating 17 mines and an annual output of more than 52 million tons, it is the European Union's largest coal conglomerate.
Based in southern Poland's Katowice coal basin, Kompania is fully owned by the Polish State Treasury and has been turning a neat profit in recent years.
With a quarter of its production destined for market in Germany, Scandinavia and Austria and a booming coal market, it earned nearly 140 million dollars profit in 2004. This year's profit forecast has been scaled back to some 30 million dollars, but Madej is convinced the future is bright.
Active mines in Poland have a 60-year or 5-billion-ton supply of black coal - but Poland, as Europe's leading producer of what the Poles call 'black gold' has an estimated total reserve of 150 years when untapped veins are counted, coal industry experts say.
'Poland can be the reservoir for the European Union's energy security,' Madej told Deutsche Presse-Agentur dpa. 'It's quite obvious we are a much more stable country than the majority of oil- producing states, not to mention there's also only 40-60 year's worth of crude oils left world-wide.'
Estimates of the world's remaining accessible crude oil range from 1 trillion barrels according to OPEC to 2 trillion barrels by international oil giants like ExxonMobil, but world experts expect oil production to peak - or level off, then drop - by the mid-century at the latest due to physical limitations on extraction.
With Poland relying on coal-fired plants for about 91 per cent of its electricity, the domestic supply is more than secure for the next century.
As more coal-fired generators are fitted with modern carbon emission controls, coal-generated electricity also poses less of an environmental threat than potentially lethal nuclear power generators, its advocates say.
Kompania Weglowa is also optimistic that plans in Germany to build 8 new coal-fired generators by 2011 could also provide new markets for cleaner-burning Polish black coal, Madej adds.
The EU-sponsored 'Clean Technology Clusters' project in Katowice is just beginning to study new technologies aimed at tapping into the country's abundant veins of black gold to produce natural gas or petroleum in the not so distant future when crude oil will be a thing of the past.
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