Government to discuss future of closure-threatened Paskov mine

The Czech government is debating the future of the Paskov mine, one of the last deep coal mines in the country, after its owner OKD announced its possible closure at the end of 2016. The mine is one of the biggest employers in the Moravian-Silesian region and its closure would put 1,800 employees and almost as many more doing business with the mine out of work.

Photo: archive of OKD

Last year the state agreed to provide 600 million crowns to offset the social costs of closing Paskov if OKD and its owner New World Resources (NWR) agreed to keep the loss-making mine open until the end of 2017. The mine owner was, however, given the option of restarting the closure process before that date if coal prices continued below a certain level for a sustained period.

Coal prices have been continuing to fall and the deal between OKD and the state is now not likely to outlive the year. The company has already announced the mine’s possible closure at the end of 2016, and floated an alternative solution which would mean transferring the mine to state ownership.

OKD is close to nine billion crowns in debt and the future of the whole company –including other mines in the region –is hanging in the balance. This week OKD reportedly asked the government for a massive financial injection which would cushion the impact of the closure not only of Paskov but its other mines. Although no figure was mentioned, both Industry and Trade Minister Jan Mládek and Finance Minister Andrej Babiš described the request as “totally unacceptable”.

However the government needs to mediate a solution that will protect the region from rising unemployment. A meeting with NWR originally scheduled for this Wednesday was put off as the government considers its options. On Thursday, Minister Mládek met with trade union representatives to hear their views. According to the head of the mining union Jan Šábel, trade unions are against the government giving OKD more money because they have serious misgivings that it would be used to help employees. Šábel says OKD is practically in a state of bankruptcy and the best solution would be for NWR to hand over the ailing company to the state for a symbolic one crown.

NWR does not want to comment on the situation for the time being, but it has stressed the need to find a comprehensive solution which would address not only the future of Paskov, but the entire OKD company.

The Czech government is to consider its options at a meeting on Monday and come to a decision by the end of the year. Talks with NWR are not expected before January.