Business, Finance & Economics

Are Polish mines unsafe?


WARSAW, Poland — A methane explosion in a Polish coal mine in September that killed 17 miners and left 35 severely burned has cast light on the safety practices and economic condition of one of Europe’s largest coal mining sectors.

The accident on Sept. 18 at the Wujek Slask mine in the western region of Silesia happened as miners were digging out coal more than 1,000 yards below the ground. An unexpected buildup of methane triggered alarms too late, and a flash explosion scorched the men underground.

As worried wives waited outside the mine head, and politicians and ambulances raced to the scene, the deadly accident was attributed to the persistently grim financial condition of the coal mines. Now the government's watchdog body is investigating after reports surfaced that miners were pressured to tweak the settings of the underground methane detectors in order to not slow production.

The mining sector in Poland is still overwhelmingly in government hands, and any thoughts of selling off the mines to private investors like Zdenek Bakala, the Czech mining magnate who has made a fortune out of his country’s coal mines, arouses howls of protests in Poland. But being state-held means that the mines are not run efficiently, and don’t have the funds to invest in modernizing their equipment and technology. In the first half of this year, Poland’s coal mining sector lost 153 million zlotys ($54 million), as demand for coal slumped due to the global economic crisis.

Although the mines turned a profit of $110 million in the same period last year, even that result was lackluster considering that the economic boom in central Europe was still going at full steam.

One reason for the financial troubles of the mines is that, unlike in the United States, Australia and South Africa, which tend to extract coal in massive open cast mines that strip the mineral from the surface, Poland’s coal seams are deep underground. There, dangers such as underground fires and methane lurk for miners and make extraction costs much higher.

The depth of the coal has caused mines to use questionable methods, such as digging at seams that lie below the level of the mine shafts, which creates problems in pumping through enough air to cleanse the area of dangerous gases like methane.

This month’s accident is just the latest in a series of mining tragedies, which are almost impossible to avoid in deep coal mining. Last year, a mining accident killed six and injured 17 miners, and in 2006, a methane explosion at the Halemba mine killed 23 miners.

Politicians are becoming aware of the problems associated with the mines.

“Do we really have to extract coal in every condition, at every depth and at every danger?” Donald Tusk, Poland’s prime minister, said after the disaster. “I think it’s high time to say we will not dig coal there where it causes a direct danger to life.”

But even Tusk, a pro-business politician generally in favor of selling off state-controlled companies, balks at the idea of privatizing the coal mines. His foe, Lech Kaczynski, Poland’s president, has made hanging on to state assets a key part of his political program.

Kaczynski is keen on gathering crucial votes from miners and their families. However, the sector is not just important for the votes it brings, and for the jobs it provides to the politically well-connected who tend to become company directors; it also provides Poland with crucial energy security.

While most other European countries have shuttered the bulk of their coal mines due to high extraction costs, Poland currently generates about 90 percent of its electricity from coal, one of the highest ratios in the world, which has made Poland a target of environmentalists worried about global warming. By contrast, Poland imports almost all of its oil and two-thirds of its natural gas from Russia, and there are growing concerns about energy dependence on Poland’s former imperial ruler.

The coal industry has been through wrenching changes since the collapse of communism in 1989. The government, together with institutions like the World Bank, has spent more than $1 billion to restructure the sector. As a result, the painful reforms have seen the number of workers in the industry plunge from 400,000 in the 1980s to only about 100,000 today.

But Poland’s reliance on coal for energy and on miners for votes means that September’s mining accident is unlikely to be the last.