03 November 2003 08:11
Karbon Invest protests Polish black coal imports
Karbon Invest, the owner of the biggest black coal mining companies in the Czech Republic, is calling on the
government to subsidize its production to help offset the impact of unlimited imports from neighboring Poland. The
government decided last month to abolish existing import quotas on black coal starting in January, a few months earlier
than it would have been forced to as part of its trade agreements for joining the European Union. In recent years there
has been a cap of around 1.223 million tonnes a year on black coal from Poland and also Ukraine. Government officials
say that unlimited imports of Polish coal, which is subsidized and, therefore, cheaper, should not threaten Czech mines.
But the two north Moravian black coal mining companies owned by Karbon Invest, Ostravsko-Karvinske Doly (OKD) and
Ceskomoravske Doly (CMD), disagree. "Black coal mining is not subsidized in the Czech Republic, and we want all
players in the market to have equal conditions" said Radek Chalupa, spokesman for the coal mining companies. OKD,
however, is not pinning its hopes on help from the Czech government. It recently announced plans to mine black coal in
Poland as well, making it eligible for the Polish subsidies. "The Polish government is preparing to privatize three
local mining firms, and we want to participate [in the bidding]," Petr Otava, Karbon Invest's co-owner, said
in July. Chalupa confirmed that they were still interested in the Polish mines but would not comment further. Polish
coal output is six times higher than Czech production and 10-15 percent cheaper, partly thanks to the government
subsidies. Meanwhile, Czech wholesale coal dealers and steelmakers cheered the prospect of an unlimited supply of
cheaper Polish coal. They have long complained that the quotas forcing them to buy more expensive Czech coal put them at
a competitive disadvantage. "There was no logic in the fact that we couldn't buy cheaper coal from Poland in
the amount we would have liked and that we have to meet the costs of less efficient Czech mines," said Frantisek
Chowaniec, the CEO of the largest steel maker on the Czech market, Ispat Nova Hut. Ostrava-based Tchas, one of the
largest solid fuel traders in the country, praised the government's move to end quotas slightly ahead of EU
accession next May. "We have been pointing out for years that import limits impede competition and harm Czech
consumers," said Roman Vank, Tchas' public relations director. This year Tchas circumvented the government
quota by importing black coal from Russia, which isn't subject to quotas. "Starting next year we're
planning on higher imports from other countries too," Vank said without giving more details. Unrestricted imports
should reduce the price of black coal on the Czech market, he added. Tchas ended its long-standing agreement with OKD
when its supply contracts with the company expired at the end of 2001. "In the future, it is obvious that further
perspectives in solid fuels trade depend on commercial collaboration with foreign partners," the company said on
its Web site. While Karbon Invest made plain it was displeased with the government's decision, the company has
received a boost of sorts from the state. Government officials have given up their fight with the company and proposed
to offer it three-month negotiating exclusivity on the sale of the 45 percent of OKD shares that the state still holds.
—with wire reports
[CEIW] |
RUSSIA IN FACTS
