What is the social contract for the transformation of mining?

The transformation of the mining industry in Poland is an often discussed and controversial topic. As a result of continuing disagreements there have been numerous strikes by miners over many years. The European Union’s energy policy requirements have also created difficulties. On Thursday, 24 June, the President of the Polish Mining Group, Tomasz Rogala, and the Deputy Minister of State Assets, Artur Soboń, answered many burning questions concerning the future of mining in Poland. How does it all look like?

The process of closing mines in Poland will continue until 2049

As Tomasz Rogala reports

The transformation of the mining industry is a long-term process, requiring significant financial outlays, the creation of a sufficient number of new jobs, and also requiring social acceptance – thus it takes time

The entire process has been spread out over nearly thirty years in order to have the opportunity for long-term consideration of the transition to new energy sources, the provision of social benefits, and the transformation of post-mining areas

A sustainable transition to other energy sources takes time. According to the PEP, most new sources are expected to appear in about 10-15 years – commented the President of PGG

30 years ago, the Polish energy sector was based on 96 percent coal, in 2004 – 92 percent, and in 2019 – about 77 percent. This means a reduction in the share of coal by 19 percentage points within 30 years.

Another issue is to provide jobs and appropriate salaries for people who have worked in the mining industry so far, and by closing the mines, may become unemployed.

This will not be an easy task, since the average gross monthly salary in the mining industry is about PLN 9 thousand. Creating suitable jobs for people who have worked in the mining industry for many years may be a very difficult task. There is talk of retraining miners for the automotive industry. According to calculations, jobs in the automotive sector could provide former miners with social security similar to the current one. It has been calculated that creating alternative jobs in the automotive sector would cost even PLN 350 billion.

Artur Soboń confirmed that the prenotification process has begun

According to Artur Soboń, on Thursday, 24 June, all parties reached an agreement and a social contract was concluded. The application has been submitted to the European Commission and the prenotification process has begun. The Commission’s approval is a condition for the agreement to enter into force

Unfortunately, little detail of this social agreement has been made public. So far we know that

• the social agreement will have four annexes on the principles of public aid, investments to be made under the agreement, post-mining areas covered by the agreement and aid instruments for mining-related companies and mining municipalities,
• hard coal mining will be liquidated in Poland by 2049,
• a point has been agreed upon concerning the indexation (increase) of remuneration in the mines for the next four years (until 2025) and the cyclicality of indexation – every four years,
• fTŚ (Fund for Silesian Transformation) is to be established to undertake organizational and financial investment activities related to the transformation of Upper Silesia and Zagłębie Dąbrowskie and reconstruction of the region’s economic potential. Its initial capital is to be no less than PLN 500 million. The Fund is also to be equipped with additional guarantee mechanisms worth PLN 1 billion,
• the costs of physical decommissioning of the mines, the costs of social protection for miners and the costs of reducing coal production are to be covered by the budget,
• the support system for miners would start in 2022 to provide employees with one-off severance payments and retirement benefits, and implement subsidies for coal production reduction,
• the support system covers the companies: Tauron Wydobycie, Węglokoks Kraj and Polska Grupa Górnicza,
• employment until retirement is guaranteed and social protection for miners leaving work – pre-retirement leave and severance pay.

Source: press materials

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