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* Low prices, high costs cause $371 million coal sale losses

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Production from Poland's state-owned hard coal mines in the first half of 2015 fell 2.5% year-on-year to 33.27 million mt and the companies made a net loss of Zloty 1.445 billion ($388.7 million) due to low prices and high production costs, a Ministry of Economy report said Monday.

Thermal coal production in Poland in January-June fell 5.7% year-on-year to 26.8 million mt, but coking coal production rose 13.7% to 6.43 million mt.

Hard coal sales volumes rose 9% to 34.67 million mt thanks to a 10% jump in domestic sales.


Thermal coal sales, which accounted for 81% of all sales volumes, rose 8% year-on-year to 28.1 million mt. Coking coal sales rose 12% to 6.56 million mt. Sales to system power plants and coking plants rose 11% and 10% respectively.

Hard coal exports were 4.48 million mt, with exports by state-owned trader Weglokoks down 0.7% year-on-year to 3.39 million mt and direct exports by individual miners up 17% year-on-year to 1.1 million mt.

Of the exports, 94% went to European Union countries, with the Czech Republic and Germany buying 1.18 million mt and 1.15 million mt respectively.

Outside the EU, Ukraine was the largest buyer, purchasing 121,700 mt, or 59% of the total non-EU exports.

The amount of coal stockpiled in state-owned Polish collieries at the end of June was 6.12 million mt, down 27% from the end of 2014 thanks to the largest company Kompania Weglowa offering coal at discounted prices.

In January-June the sector made a net loss of Zloty 1.445 billion ($388.7 million) compared to a net loss of Zloty 772.3 million in the first half of 2014.

"The deterioration in the net financial result in hard coal mining was above all the result of deepening losses from coal sales (by Zloty 324.6 million) and financial activity losses of Zloty 227.2 million," the ministry said.

Due to high production costs and low coal prices, Poland's state coal miners incurred losses of Zloty 1.38 billion on sales in January-June.

The average unit production cost in the first half of 2015 was Zloty 304.45/mt, down 2% year-on-year.

The average price of Polish thermal coal in the first quarter was Zloty 219.41/mt, while in the second quarter it fell to Zloty 206.15/mt.

--Adam Easton, newsdesk@platts.com
--Edited by Jeremy Lovell, jeremy.lovell@platts.com