Lessons learned from the restructuring of Poland’s coal-mining industry (GSI)

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This report by the Global Subsidies Initiative (GSI) looks at subsidies for underground mining of hard (bituminous) coal in Poland which intended to help the industry make the transition from a command-and-control to a market-based system, while becoming internationally competitive. Soon after the economic transition began in 1989, demand for coal declined but controls on coal prices remained in place. Over-employment combined with high production costs proved to be untenable for the coal mines. 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.