A Glasgow-based company has acquired one of Poland’s largest coal mines as part of the Polish government’s drive to privatise its coalmining industry.
Gibson Group International will pay 205 million zloty (£50m) for the mine, located in Czechowice-Dziedzice, a town in Silesia, southern Poland, and intends to invest a further £200m on an adjacent clean-coal-technology power station.
The mine was put up for auction by the Polish state-owned mining company Kompania Węglowa last year. Gibson Group International won the tender to acquire the mine in competition with Czech power company CEZ. Steelmaker Arcelor Mittal and a local Polish mining company are also understood to have submitted bids.
Kompania Węglowa’s supervisory board and Poland’s Ministry of Economy have yet to formally approve the deal, which is due to complete in June.
Tom Gibson, chairman of Gibson Group International, said: “The mine has reserves of 500 million tonnes of top-quality coal. Its value has been significantly enhanced as a result of the recent rise in the price of coal, which has now reached $300 (£150) to $400 a tonne. That compares to $25 a tonne five years ago.”
Bert Stockley, managing director of Gibson Group International, said: “We are delighted to have won this tender. Operating this mine is going to be a major challenge but it is one that we really look forward to. We have good relations with the unions and have already selected a management team, all of whom are Polish.”
Gibson Group International recently concluded an agreement with Solidarity and three other trade unions that represent the mine’s 1,000 workers and will invest heavily in improving safety standards. According to Polish business daily Puls Biznesu the mine needs some 300m zloty (£70m) of investment.
Gibson said he anticipates that annual coal production from the mine will reach 2.5m tonnes, which would imply $875m in annual gross revenues at today’s coal price. Its current annual output is just 0.8m tonnes.
“The capital has already been arranged from a number of UK banks,” said Gibson. “The banks are desperate to become involved with real stuff like coal. It’s a physical asset they can put on their balance sheets.”
Gibson Group International was founded in 2001 under the name The UK Russian Company. In May 2005, it changed its name to Gibson Group International. This has led Polish media to speculate that the company is backed by Russian capital but Gibson said this is “absolute bull”.
Gibson said that CO2 from the planned power station will be pumped into greenhouses where it will be absorbed by plants.
Poland is Europe’s largest coal producer with 100m tonnes of annual output, of which it uses only half. The Silesian coal basin has been one of the world’s biggest and most polluted coalmining areas since the 19th century, with more coal miners now working there than in the rest of the European Union put together.
In the past decade the industry has undergone painful reforms with the total number employed falling from 500,000 in the early 1990s to less than 150,000 today and state subsidies have had to be cut back since EU membership in 2004.
Gibson, who worked for Babcock International, GEC and Foster Wheeler before establishing his company in 2001, said GGI already operates six mines in China, Russia and Poland.
This article was published in the Sunday Times on 20 April 2008. Read on Times online.