Polish coal exporter forced to import raw materials from the USA

A domestic coal shortage has forced Poland's largest coal exporter, Weglokoks, to order shipment from the United States so that it can fulfill contracts with foreign buyers.

Weglokoks said Wednesday that it plans to resell imported US coal abroad, mainly to the Czech Republic, Slovakia, Hungary, Germany and Austria, but will also consider sales in Poland in the future.

This is likely to cause friction with Poland's energy ministry, which expects the country's utilities to buy and burn coal from domestic mines.

“We want energy security in Poland to be guaranteed by Polish coal mining,” said Energy Minister Krzysztof Czorzewski, responding to news from Weglokoks.

Poland's largest coal mining company PGG, which was bailed out of bankruptcy last year, is struggling to meet demand from its main customers - mostly public utilities - after cutting costs that have led to lower investment.

Weglokoks, one of PGG's shareholders and also one of its clients, will export around 2.5 million tonnes of coal this year from 4 million tonnes in 2016.

“The decline is due to strong domestic demand, which has resulted in limited access to coal for export,” a Weglokoks spokesman said via email.

The first test shipment from the US of 75,000 tonnes of high-energy coal is expected to arrive in Poland in mid-October, Weglokoks said, adding that he does not rule out an increase in cargo, also from Kazakhstan and Colombia.

The Polish newspaper Rzeczpospolita, which first reported that Weglokoks plans to import coal from the US, said the exporter is in talks with Polish utilities, including the largest electricity producer PGE, on potential coal sales. A Weglokoks spokesman declined to comment on this.