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Lessons learned from the restructuring of Poland's coal-mining industry
The GSI has commissioned case studies of fossil-fuel subsidy reform in Brazil, France, Ghana, India, Indonesia, Poland and Senegal. From analysing experience in these countries, it is apparent that reform is not easy but can be achieved.
This report, written by Professor Wojciech Suwala of the Mineral and Energy Economy Research Institute, looks at the reform process in the context of Polish coal mining. Soon after the economic transition began in 1989, demand for coal declined but controls on coal prices remained in place. The cost of the subsidies proved untenable given over-employment combined with high production costs.
Early government efforts did not improve matters. Only a program endorsed by the Solidarity trade union, and backed by substantial public funds for closing mines and providing social benefits, was at least a partial success. Today, coal companies have nearly achieved long-term viability and the process of privatization has commenced.
The report draws some general lessons from Poland's experience.
Last updated: 12 March, 2010
