energy.instrat.pl has been updated with new charts showing data on coal prices – both Polish-produced and imported – and production costs. In addition, we have restructured selected sections – from now on, coal prices for the energy and heating sectors (PSCMI 1 and PSCMI 2) are in one place. The new charts can be found in the Prices and Mining tabs.
The charts show, among other things, that domestic hard coal for electricity generation (PSCMI 1) has been sold for months below both production costs and the price of imported coal, contrary to all economic logic. This raises questions about the sense of further subsidies for mining companies. With billions of zlotys in annual public support, Polish mining still has no transformation plan – instead of a roadmap, we have growing piles and bills to pay.
The new section Coal prices and production costs (PL vs. Import) contains 5 cards where users can find various data on the situation in Polish mining. Some of the cards contain 2 charts showing the same data in different units. To move to the next chart, use the arrows in the upper left corner of the visualisation. The content of specific cards is described below.
PSCMI 1 and 2 in one place
The first two cards contain charts of Polish coal prices for the electricity and heating sectors (PSCMI1 and PSCMI 2) since 2011. Previously, they were available in separate sections. Both tabs contain charts showing prices in zlotys per tonne and in zlotys per gigajoule. These charts are updated between the 5th and 10th of each month.
PSCMI vs ARA imports
The third tab offers a comparison of coal prices in Poland with prices of coal imported through the ARA ports (Amsterdam, Rotterdam, and Antwerp). The data in these charts is also given in zlotys per gigajoule and in zlotys per tonne. At the bottom of the chart, it is possible to filter the data on the chart – by default, data on PSCMI 2 is filtered out. Due to data availability, the chart comparing domestic and import prices will be updated monthly, around the 20th of each month. The second round of updates takes place every quarter, after detailed data from import reports has been made available.
Production costs, coal price (PSCMI) and imports (ARA)
The next tab contains a chart comparing the prices of imported coal, PSCMI 1 and 2, and coal production costs in Poland. We will update this chart approximately every 6 months, after the end of each quarter. This chart also filters out PSCMI 2 data by default, and the data is given in zlotys per tonne of coal equivalent [tce]*.
This important chart provides insight into the mechanisms behind the difficult and still debated financial situation of the mining industry and the so-called social agreement.
The regulation of the Ministry of State Assets, which entered into force in November 2022, specifies the conditions for subsidies for the so-called ‘reduction of production capacity’ for individual mines, in accordance with the above-mentioned agreement. Although the amount of the subsidy is determined on an annual basis, settlements and payments are made on a monthly basis, in line with the reporting cycle for costs, revenues and reference prices. The amount of the subsidy is the difference between eligible extraction costs and revenues, calculated according to the higher of the two values: the selling price or the so-called reference price, i.e. the weighted average price of imported energy coal from outside the EU, converted into PLN/GJ. If the revenues outweigh the extraction costs, no subsidy is paid.
As can be seen in the chart, during the period of market turmoil following Russia’s invasion of Ukraine, import prices significantly exceeded production costs. Companies that were able to renegotiate long-term supply contracts and set sales prices in line with international prices recorded significant profits for some time. The PSCMI index presents the volume-weighted average selling price of domestic coal delivered (invoiced) in a given month.
In 2023, however, the situation began to stabilise. Since the end of that year, ARA import prices have returned permanently to standard levels, which are significantly below production costs in Polish mines. However, since November 2024, the selling prices of Polish PSCMI 1 coal have been significantly below the import price. The question arises: why are some mining companies selling the resource not only significantly below production costs, but also below the level at which they receive compensation? Perhaps this is a way to get rid of unwanted coal that no one else would buy – since loads of coal are lying in stockpiles, with falling demand from power plants and no possibility of import, ‘selling it off’ may be the only option.
Let us recall that in 2024, hard coal mining received approximately PLN 7 billion in subsidies from the state for extraction. In 2025, this will be close to PLN 10 billion. So we ask: are such huge amounts still not enough to move from current support to real transformation measures? As the Instrat Foundation has long pointed out, mining needs a roadmap for a just transition – not subsidies.
Data on average production costs in Polish mines are available in the report ‘Technical and economic results of operations and investments in hard coal mining in Poland’*. The data is broken down by quarter and published within two months of the end of each quarter, so the chart shows data up to the end of the first quarter of 2025.
Production costs in mining companies
The last tab shows a chart with coal production costs broken down by the largest mining companies. The data is given in zlotys per tonne of coal equivalent [tce]**. The chart will be updated twice a year, in the first and third quarters of the following year (this means that the data will refer to the previous year).
The chart compares the annual costs of current hard coal production in the four largest companies – PGG, JSW, Bogdanka and PKW – with the average cost according to the Industrial Development Agency (ARP). LW Bogdanka has been recording the lowest extraction costs for a long time, while Południowy Koncern Węglowy is at the opposite end of the spectrum, still more expensive than JSW, even though the latter extracts more expensive coking coal. PGG ranks slightly below the national average.
Data on the current production cost of hard coal for the companies listed above are available in the official document ‘Report to the European Commission on State aid in the hard coal mining sector’, published annually, with a delay of several months. Data on average production costs in Polish mines are available in the report ‘Technical and economic results of operations and investments in hard coal mining in Poland’*. They are broken down by quarter (and by year after the publication of data for all quarters) and are published within two months of the end of the quarter (starting in 2021).
*The report covers the following entities: Polska Grupa Górnicza S.A., Jastrzębska Spółka Węglowa S.A., LW Bogdanka S.A., Południowy Koncern Węglowy S.A., Węglokoks Kraj S.A., PG Silesia Sp. z o.o., Eko-Plus Sp. z o.o.
**tonne of coal equivalent [tce] is a unit used to compare, among other things, the cost efficiency of coal mining with different parameters – the price per regular tonne is multiplied by the ratio of the calorific value of coal from a given batch to the reference (equivalent) value and amounts to 29.3 GJ/t. [tce] can be treated as an average unit of energy assigned to a tonne of coal with a reference calorific value and is an alternative to conversion to GJ.
New charts in the Coal Brief
A chart comparing the prices of coal imported from PSCMI 1 will also become part of the updated Coal Brief. The last of the charts described above, i.e. production costs in companies, may appear in the Coal Brief as context for other charts.
Kontakt
Wojciech Przedlacki, Product Owner energy.instrat.pl, [email protected]
