KGHM Polska Miedź S.A., a leading copper producer, has announced its plan to sign a substantial credit agreement by February 26, 2024. The management board has approved the procurement of a $450 million unsecured revolving credit facility from Bank Gospodarstwa Krajowego. This strategic financial move is aimed at covering the company’s current operational expenses. The credit facility, which will be available for an initial financing period of up to 60 months with an option to extend for an additional 24 months, offers KGHM flexible financial support. For the first 36 months following the signing of the agreement, the credit will function as a renewable line of credit, where each repayment refreshes the available credit limit. After this period, the credit will convert into a term loan, repayable in four equal semi-annual capital instalments, unless an extension is exercised. KGHM has the option to extend the renewable credit line for two additional 24-month periods, with the first extension request possible after 30 months and the second after 54 months. The credit can be utilized in USD, and the funds will be allocated to general corporate purposes. The interest rate for the credit is based on the SOFR benchmark rate plus a margin, which is contingent on the financial ratio of net debt to EBITDA. The other terms of the credit are consistent with standard conditions for such transactions.
Region: Poland
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Revolutionizing Resource Management: PGE Ekoserwis Leading the Charge
In 2023, PGE Ekoserwis, a subsidiary of the PGE Group, successfully managed 3.5 million tons of residual combustion products. Gypsum, ashes, and slag, byproducts of the combustion process in energy production, found applications across various sectors including construction, agriculture, livestock farming, and mining. This strategic utilization not only conserved natural resources but also minimized the creation of new landfills, consequently reducing carbon dioxide emissions.
Pioneering Research and Development
Through its research and development arm, the GOZ Research and Development Center in Bełchatów, along with a team of highly skilled technologists and collaborations with academic and scientific institutions, PGE Ekoserwis has pioneered the development and implementation of high-quality materials and products for diverse applications, notably in the construction sector.
Sustainable Infrastructure Solutions
The adoption of alternative materials, derived from ashes and slag generated during coal combustion in energy production, is increasingly prevalent in the construction industry. These materials offer ecological benefits and contribute significantly to reducing the extraction of natural minerals, optimizing resource consumption, mitigating carbon dioxide emissions, and minimizing waste generation.
Driving Green Initiatives
Within the PGE Group, prioritizing eco-friendly practices is paramount, with PGE Ekoserwis leading the Closed-Loop Economy (GOZ) segment. This entity specializes in collecting residual combustion products, processing them into high-value construction materials, and ensuring their full integration into various construction projects nationwide.
Transforming Byproducts into Assets
In the preceding year, PGE Ekoserwis procured over 800,000 tons of synthetic gypsum, primarily supplying the cement and construction industries. Gypsum, utilized as a fertilizer, contributed to agricultural enhancement and mushroom cultivation. Additionally, it was exported to the Netherlands for construction purposes.
Versatile Applications in Construction
Ashes were directed towards cement factories, concrete plants, precast element manufacturers, chemical construction companies, and foundries. Noteworthy applications included road engineering projects such as the A2 motorway and various expressways and bypasses across the country.
Diverse Utilization Across Industries
In addition to road construction, the products derived from residual combustion products were instrumental in railway infrastructure projects, environmental remediation efforts, and large-scale engineering endeavors. Hydrotechnical binders supplied by PGE Ekoserwis were vital components in water management and land reclamation projects, including flood protection embankments along the Nysa Łużycka River.
Leadership in Sustainable Business Practices
PGE Ekoserwis, with over three decades of experience in managing residual combustion products, offers a portfolio of over 200 certified products derived from both combustion and mining byproducts. These products adhere to stringent environmental standards and undergo rigorous quality assurance m
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DTEK contracts another 70,000 tons of coal imports from Poland
Ukraine’s private energy giant DTEK has contracted an additional 70,000 metric tons of coal from Poland as it prepares for a second winter of Russian attacks on the country’s energy system, the company said in a statement on Nov. 13.
DTEK has contracted a total of 280,000 metric tons of coal from Poland since September, and has already imported and delivered 78,000 metric tons to its thermal power plants, the company said.
Last month, the company said it had planned to import 210,000 metric tons of coal to ensure the stable operation of its thermal plants this winter.
“Our own coal mining always remains a priority for us, but additional shipments of fuel from abroad will allow us to go through the heating season more confidently. We are doing everything to get through this difficult winter and provide Ukrainians with light and warmth,” said General Director of DTEK Energy Ildar Saleev.
Russia has consistently targeted Ukraine’s energy infrastructure since the start of the full-scale invasion, including sites operated by DTEK.
The company is actively repairing and restoring power units, extracting coal at maximum capacity as well as reinforcing thermal power plants and coal mines with alternative power sources, Saleev said.
He also said the company has a reserve of critical equipment to counter the impact of future strikes.
The military on Nov. 6 warned that Russia is “waiting for the temperature to drop below zero” before launching mass strikes on Ukraine’s energy system.
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Wire rod production has been suspended at ArcelorMittal’s Polish plant
ArcelorMittal Poland suspended the production of wire rod at the Sosnowiec plant for the period from November 18 to 27, citing unfavorable conditions on the national market as justification.
According to the Polish Steel Association, apparent consumption of steel products in Poland this year fell by 17% compared to the previous year. According to European Commission estimates, the country will end 2023 with a GDP decline of 0.4% and inflation of 11.1%.
The Sosnowiec plant, located in the south of Poland, is a rolling mill that receives billets from the iron and steel mill D a browa Gornicza. Its capacity is 800 thousand tons per year. Wire rod is the main product of the enterprise, so stopping the rolling mill actually means its temporary decommissioning.
As S&P Global Platts notes, the European long steel market is experiencing a strong decline this year due to the crisis in the regional construction industry. Consumer inventories of rolled steel for construction purposes are low and are unlikely to increase in the foreseeable future.
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ArcelorMittal summarizes investments in Krakow. They will build new hydrogen furnaces at the steelworks for PLN 135 million
The construction of hydrogen furnaces in the cold rolling mill in Kraków is just one of the large investment projects that ArcelorMittal Poland is implementing in its branches this year. – They will cost almost PLN 1.5 billion and will increase the quality of the products offered and improve energy efficiency and installation efficiency – says Marzena Rogozik, from the Krakow branch of Arcelor Mittal.
New hydrogen furnaces
The pickling plant in the cold rolling mill of the Krakow branch was modernized; work is currently underway in the annealing shop. The company will build new hydrogen furnaces there, which will replace the old installations. The cost of all works in Krakow is over PLN 135 million.
This year, the ArcelorMittal Poland coking plant in Zdzieszowice could also count on a cash injection for investments in a heat and power plant and the construction of a flue gas denitrification installation. Important environmental projects cost more than PLN 165 million.
– Aware of the challenges posed by the constantly changing market situation and unexpected economic fluctuations caused by completely unexpected events, such as the pandemic or the outbreak of war in Ukraine, we constantly invest in those areas of our activity that allow us to confidently compete on the steel market and maintain our plants are in good condition – emphasizes Wojciech Koszuta, CEO of ArcelorMittal Poland.
The steel industry is the driving force of the Polish economy
– The huge financial outlays are not only the result of the need to replace some installations with new ones or to meet the stringent requirements of EU directives. It is primarily a strong desire to improve quality and implement product innovations in our steelmaking processes in Poland, despite the challenges faced by steel producers throughout Europe – emphasizes Sanjay Samaddar, president of the management board of ArcelorMittal Poland. – Steel industry is the key driving force of the Polish economy. We want to develop them here, on the Vistula River, and at the same time we have the ambition to become pioneers in the difficult and expensive, but necessary, decarbonization process – he sums up.
Since the beginning of its operations in Poland, in 2004, ArcelorMittal Poland has already invested PLN 10.5 billion in its plants located in six cities in the country.
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Poland’s climate-friendly coalition warned of obstacles to emissions goals
Poland’s probable new government can shed its reputation as a “climate laggard” but will still struggle to cut emissions quickly, environment and energy groups have said.
The rightwing Law and Justice party (PiS), which has ruled Poland since 2015 and has slammed the brakes on climate action at home and in the EU, is unlikely to form a government despite having won the most votes in parliamentary elections on 15 October. Analysts expect a more climate-friendly coalition between the centrist Civic Coalition, the centre-right Third Way and the leftwing Lewica parties.
The three opposition parties have promised to build more clean energy infrastructure, and to cut carbon emissions more quickly than before.
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Poland begins retraining coal miners to work in wind farms
Polish coal miners have begun training in operating and servicing wind turbines as part of a programme to support workers leaving the mining sector.
Poland produces around 70% of its electricity from coal – the highest figure in the EU – but has plans to replace that share with renewables and nuclear over the next two decades. The energy transition has, however, caused concern among miners and their unions over what the future holds for them.
The two-week training – initiated and funded by EDF Renewables Polska, the biggest wind energy producer in Poland – is free for miners. The company hopes to help at least dozens of them move into new jobs.
“In the coming years, the wind energy industry will need tens of thousands of employees, while the specialised staff leaving the mining industry seems to be particularly prepared to find employment in the renewable energy sector after appropriate training,” said Alicja Chilińska-Zawadzka, general director at EDF Renewables Polska.
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Construction of Poland’s first offshore wind farm set to begin
Orlen announced yesterday that it has secured all the requisite construction permits, contracted all key components and secured all necessary financing. It has also started the construction of a terminal in the port city of Świnoujście that will speed up the installation of offshore wind turbines.
“Despite the formidable challenges posed by the pandemic, supply chain disruptions and military conflict across our eastern border, we have adhered to the ambitious timeline we set from the outset,” said Orlen’s CEO, Daniel Obajtek. His firm describes Baltic wind as “Central Europe’s largest green energy project”.
The foundation laying for the Baltic Power project is scheduled for 2024. The wind farm will comprise of 76 250-metre-high turbines, each with a unit capacity of 15 MW. Total installed capacity will reach 1.2 GW in 2026.
Last month, Baltic Power signed loan agreements for a total of around €4.4 billion (a figure higher than the €3.6 billion initially reported) with 25 Polish and international financial institutions.
“This is the largest financing obtained for a single investment in Poland’s history and one of the largest transactions of its kind in the offshore area in Europe,” said Orlen.
As part of its energy transition strategy, the company also announced last month a $1 billion (4.2 billion zloty) investment in carbon capture and storage on Norway’s continental shelf.
Poland has one of Europe’s most polluting energy sectors. The country still relies on coal to produce around 70% of its electricity, by far the highest proportion in the EU.
But the government, which has been friendly towards the politically important coal sector, this year set a new target for Poland to produce three quarters of its energy from renewables and nuclear by 2040. The plans include offshore wind power capacity of 5.9 GW by 2030 and 18 GW in 2040.
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Europe starts the clock on greening Soviet-era heating grids
Heating grids are pipelines spanning cities, transporting hot water from power plants into homes. What originated from a Soviet fondness for centrally-planned solutions soon spread to Nordic countries after the 1970s oil crises.
Today, 12% of the EU’s heat and hot water needs are serviced by district heating, with the percentage going up to 40% in countries like Poland.
In Eastern EU countries, the water is heated chiefly by burning coal, but countries there will have to switch to greener alternatives in order to meet the EU’s climate neutrality goals.
Can they meet the challenge?
“Meeting the requirements in Poland will require, depending on the scenario, expenditures of more than €90 billion to decarbonise the district heating sector,” said Pawel Szczeszek, president of the Polish district heating company PTEZ and vice-president of the country’s electricity industry association PKEE.
“We are concerned about the excessive burden the transformation costs will impose on ours users,” he told participants at a recent EURACTIV event.
Especially challenging are cities like Warsaw, where a network of pipes 1,800 kilometres-long supplies 80% of homes with heat. A mere 7% of the energy used in Poland’s heating grids is green.
The clock is already ticking for Poland and other Eastern EU counties where dirty fuels play a dominant role in district heating.
“The Energy Efficiency Directive introduces several measures that are addressing the district heating sector and district cooling sector,” explained Madis Laaniste, policy officer for energy at the European Commission’s energy department.
For instance, it introduces benchmarks district heating systems need to meet in order to be labelled as “efficient” – a crucial requirement to qualify for state support, he added.
By 2028, heat grids must use a mix of 50% renewables, 50% waste, or 75% cogeneration heat from nearby industry and power stations in order to be labelled “efficient”. The requirements tighten gradually before district heating must be fully renewable or running on industry waste heat from 2050.
The EU’s renewables directive adds to the pressure, with an indicative target of boosting renewables in district heating by more than 2% per year, while relying on biomass to replace fossil fuels will become more challenging due to tighter sustainability rules.
“After 2030, there will be no support for the new investments using fossil fuels,” explained Laanise, adding that “after 2035, there will be no support for the systems that use only fossil fuels”.
Moreover, the price of CO2 certificates under the EU’s emissions trading scheme (ETS) are expected to rise by 2040 – above €400 per tonne according to some projections – putting the Eastern European district heating industry under pressure to transform.
But Poland’s district heating companies are not amused by the EU’s fuel mix requirements, saying it makes the gradual transformation of the grid more challenging.
“We see that it’s impossible to divide, for example, the district heating systems in Warsaw, in Gdansk, in Krakow into smaller parts,” explained Dorota Jeziorowska, a director at PTEZ. “Until 2045, combined heat and power units will definitely be needed,” she added, saying state support will be essential to make the transformation happen.
Radan Kanev, a conservative EU lawmaker from Bulgaria, argued that state support may not be enough
“The transformation of such huge facilities is a very difficult task,” he told the event. “It is certainly expensive, but it is also a very serious engineering challenge without an obvious solution.”
How, then, should district heating companies meet the time-pressure from Brussels while grappling with the engineering side of such a large-scale transformation?
Julien Joubert, who works on transformation planning at Energy Cities, a European association of local authorities, offered a Central European vision to Eastern Europe: Vienna.
Not unlike Poland and Bulgaria, Vienna burns fossil fuels, waste, and biomass to heat its millions of residents.
“Now Vienna’s strategy is not to go to biomass but really develop geothermal energy and also recover the waste heat produced by industry,” he said at the Euractiv event. Munich had similar plans, Joubert added.
From 2026, Vienna’s utility Wien Energie plans to serve 20,000 households with hot water from geothermal, a figure that will rise to 120,000 households by 2030 before the city’s heating grid becomes entirely climate neutral by 2040.
It’s a future hard to imagine for Warsaw, however, where the utility in charge eyes coal-heated water well into the mid 2040s.
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Green energy in JSW – strategic loan for environmental projects
Jastrzębska Spółka Węglowa has entered into an agreement with the National Fund for Environmental Protection and Water Management to secure a loan of PLN 85 million for the “Commercial Methane Utilization – KWK Budryk” project. The signing of this agreement, which took place on 4 October at JSW’s headquarters, aims to provide support for innovative environmental initiatives and sustainable development activities. The signing ceremony was attended by Marek Wesoły, Deputy Minister of State Assets, Tomasz Cudny, President of the JSW Management Board, Dominik Bąk, Deputy President of the National Fund for Environmental Protection and Water Management, and Wojciech Kałuża, Vice-President of the JSW Management Board for Development.
Deputy Minister Marek Wesoły expressed his appreciation for this initiative, emphasizing the awareness of the dangers posed by mining and the need for necessary changes to be implemented. He welcomed any financial support that can be directed towards mining companies, recognizing that Jastrzębska Spółka Węglowa plays a crucial role in our development through the production of coking coal, which is vital for the energy transition and the production of steel.
The loan proceeds are specifically designated for financing projects aimed at reducing the environmental impact of mining operations and promoting nature-friendly solutions. The total cost of the “Commercial Methane Utilization – KWK Budryk” project amounts to PLN 88,165,130, and the loan will cover 96.4 percent of this cost.
Tomasz Cudny, President of the JSW Management Board, expressed his satisfaction with the financial support received for their environmental projects, aligning with the environmental strategy adopted by the JSW Group. He appreciated the collaboration with the National Fund for Environmental Protection and Water Management, which actively supports environmental projects not only within JSW SA but also in other companies of the Group. Cudny also highlighted the recent support of PLN 150 million received by JSW Koks for the construction of the Radlin Combined Heat and Power Plant.
The “Commercial Methane Utilization – KWK Budryk” project focuses on reducing methane-related hazards through enhanced methane drainage efficiency and a reduction of methane emissions into the environment by 13 thousand tons annually. This will be achieved by utilizing methane in cogeneration units for the generation of electricity and heat, resulting in a reduction of CO2 emissions by 328.5 thousand tons per year. Furthermore, the implementation of this project will lead to a decrease in energy procurement from external suppliers and a reduction in fees associated with methane emissions.
The project at the Budryk mine encompasses the construction of six cogeneration units with a total capacity of 20 MWe, enabling the production of up to 120,000 MWh of electricity per year. Additionally, infrastructure such as the main switchboard at the VI shaft site, methane drainage pipelines, and other technical facilities have been expanded.
Dominik Bąk, Vice-President of the Management Board of the National Fund for Environmental Protection and Water Management, highlights the significance of this project. He explains that it involves the construction of infrastructure that enables the utilization of methane extracted from the mine for electricity and heat generation by Jastrzębska Spółka Węglowa SA. The project primarily focuses on the utilization of methane from the Budryk mine to meet the energy needs of the mine itself.