Poland Mining Report Q2 2010
Business Monitor International, April 2010, Pages: 65
The Poland Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Poland's mining industry.
The economic downturn has had a negative impact on Poland’s mining industry after years of extensive growth. The wider economy has also felt the effects of the global financial crisis with rising levels of unemployment and a rapidly expanding budget deficit. As a result, Poland is currently in the middle of a considerable privatisation plan to tackle the country’s mounting debt. The government failed to reach its target of raising PLN12bn (US$4.2bn) in 2009 from the sale of assets. But in just the first 6 weeks of 2010 an improved economic environment saw PLN3.5bn (US$1.2bn) added to the total raised through privatisation. Major companies earmarked for privatisation include the utility firm PGE PGEP.WA, as well as a number of mining assets.
Indeed, in February 2010, Poland’s state treasury has raised PLN1.1bn (US$387mn) by selling its 46.7% stake in the country’s sole-listed coal miner Bogdanka. The stake, valued at PLN70.5 (US$24.35) per share – representing a 5.6% discount to Bogdanka’s closing price on March 8 – was sold to 14 local pension funds. The sale forms part of the government’s ambitious privatisation plan to raise PLN25bn (US$8.6bn) to plug this year’s anticipated deficit of PLN52bn (US$17.9bn). Meanwhile, after months of speculation and protests, Copper miner KGHM was finally put forward for a 10% equity sale in the beginning of 2010. The sale, coupled with a 13% stake in refiner Lotos LTOS.WA raised PLN2.4bn (US$846mn).
As the EU leads a focus on the reduction of carbon emissions, many countries are having to assess their current industrial procedures and legislation in order to comply with wider European regulations. In November 2009, Poland’s Ministry of the Environment began consultations to prepare for the upcoming draft of the Carbon Capture and Geological Storage Bill (CCS). Poland will need to create a legal framework for all CSS procedures and the government intends to use the Belchatów and Kedzierzyn power plants to exemplify how CSS technology is to be implemented within the country. In order to introduce the EU CSS Directive, amendments will be required to the following legislation: the Geological and Mining Law, Law on the Freedom of Economic Activity, Environmental Law, Act on Disclosure of Environmental Information and its Protection, as well as Energy Law.
Poland was disproportionately hit by the slump in commodities prices linked to the global economic recession. BMI estimates that the mining sector contracted 0.5% in 2009. By comparison, the sector grew by 14.5% in real terms in 2008. Although growth is expected to pick up towards the end of the forecast period, any uptick is expected to be slight. Growth for 2010 is anticipated but at low levels of 3% and market expansion is expected to stay around this level for the remainder of the forecast period. The market is projected to reach a value of US$15.53bn by 2014, compared with US$8.45bn in 2009. However, in March 2010, Kompania Weglowa, along with two other Polish coal producers: Katowicki Holding Weglowy and Jastrzebska Spolka Weglowa announced that they were preparing a motion to apply for European Union protection due to the allegation that Russia was selling coal at dumping prices. The companies are appealing to the EU to apply anti-dumping duties on low cost coal from the east. The duty on imports would shelter domestic production from the companies which have seen domestic sales negatively affected by dipping global prices.
Executive Summary
SWOT Analysis
Poland Political SWOT
Poland Economic SWOT
Poland Business Environment SWOT
Special Focus: Outlook For Global Mining
Table: Biggest Chinese Acquisitions In Australia Since 2005
Industry Trends And Developments
Overview
Table: Mines In Poland
Regulatory Structure And Developments
Environmental Protection
Key Projects
Metals
Copper
Nickel
Bauxite And Aluminium
Minerals
Coal
Business Environment
Europe Mining Business Environment Ratings
Poland’s Mining Business Environment Rating
Legal Issues
Table: BMI’s Legal Framework Ratings
Labour Force
Table: Labour Force Quality
Political Environment
Industry Forecast Scenario
Aluminium Price Outlook
Table: BMI’s Aluminium Price Forecast, 2009 And 2010
Table: Aluminium Outlook, 2005-2010
Copper Price Outlook
Table: BMI’s Copper Forecast, 2009 And 2010
Table: Copper Outlook, 2005-2010
Commodities Outlook
Table: BMI’s Gold Forecast, 2009 And 2010
Global Industry Overview
Regional Analysis
Poland’s Mining Industry Forecast
Table: Poland’s Mining Industry Forecast 2007-2014
Competitive Landscape
Table: Key Players In Poland’s Mining Sector
Company Monitor
KGHM Polska Miedz SA
Jastrzebska Spólka Weglowa SA
Kompania Weglowa
Global Assumptions Q210
Table: Global Assumptions, 2007-2014
Table: Developed States’ Real GDP Growth, 2007-2012
Table: Emerging Markets Growth, 2007-2014 (%)
Table: Global And Regional Real GDP Growth And Exchange Rates, 2007-2014
Business Environment Ratings Methodology
Table: Mining Business Environment Indicators
Table: Weighting Of Components
- KGHM Polska Miedz SA
- Jastrzebska Spólka Weglowa SA
- Kompania Weglowa
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