Coal news and updates

Workers at Europe's largest coking coal miner. Jastrzebska Spolka, Weglowa returned to work Monday after union leaders suspended a strike following a statement by the company's CEO that he would resign if they did so.

 

"Work has started at all the mines. We do not have signs of any problems," union spokesman Piotr Szereda told reporters.

 

Union leaders suspended the strike late Friday following an announcement by CEO Jaroslaw Zagorowski that he would submit his resignation to the company's supervisory board if workers returned to work Monday.

 

After the crews returned to work Zagorowski submitted his resignation to the board, which is due to meet on Tuesday to decide whether to accept it or not. JSW said the reason for Zagorowski's resignation was because his relations with the unions had become so poisonous.

 

On Friday union leaders reached an agreement with management on cost- cutting measures. Under the agreement half of the miners' annual bonus would be linked to the company's earnings. This bonus would be abolished for administrative staff. A six-day working week would eventually be introduced and miners agreed to work on Saturdays to make up the shortfall in production caused by the strike. JSW said the measures would bring annual savings of Zloty 280 million ($76.4 million).

 

"The strike has ended, the miners have returned to work and the signed agreement will bring substantial savings for the company," Zagorowski said in a statement. "The lack of clearly defined rules for working on Saturdays is the only thing that is a source of dissatisfaction. The most important thing is to restore the company's stability and enforce a six-day working cycle in the mines in the very near future," he added.

 

Szereda warned the strike would be reactivated if the supervisory board did not accept Zagorowski's resignation.

 

"If this doesn't happen on Tuesday and he is not dismissed [by the supervisory board], I can guarantee that on Wednesday the workers will resume the strike," Szereda told reporters late Friday.

 

About 20% of JSW's 26,000 workers had been on strike since January 28 in a protest against the cost-cutting plans. Zagorowski has warned that JSW could lose financial liquidity by April if the measures are not introduced.

 

JSW has been hit by falling coal prices combined with rising costs. The company made a net loss of Zloty 302.6 million in the first three quarters of 2014.

 

JSW estimates it has been losing about Zloty 30 million a day in income because of the strike which halted production.

 

ArcelorMittal Poland, Europe's largest coke producer, which procures more than half its coal from JSW, said it was forced to seek alternative overseas' supplies for its cokeries in Krakow and Zdzieszowice because of the strike. On Monday the steelmaker said it would seek compensation for undelivered supplies. "We want to discuss compensation for unrealized supplies with representatives from Jastrzebska Spolka Weglowa in the near future," ArcelorMittal Poland spokeswoman Sylwia Winiarek said in a statement.

 

About three quarters of JSW's output is coking coal and the remainder is thermal coal.

 

 

Source: Platts