History has come full circle. The ministry responsible for mining is once again headquartered in Silesia. Professor Marzena Czarnecka, head of the Department of Energy Transformation at the University of Economics in Katowice, has assumed leadership of the Ministry of Industry – as that is its official name. She has identified her most important task as securing the notification of public aid stipulated in the social agreement regarding the transformation of the hard coal mining sector.
However, the new ministry is responsible not only for mining and coal energy.
The Ministry of Industry was formally established on March 1st, less than two weeks after the relevant regulation was adopted by the Council of Ministers. In practice, Minister Czarnecka had already made her initial actions and personnel decisions earlier.
“The Ministry will be responsible for minerals, meaning mining as such and the energy sector in the field of fossil fuels,” Professor Czarnecka announced at the end of December during her debut media briefing. Comments immediately arose that it wasn’t so much a Ministry of Industry as just two of its (and not necessarily the most promising) branches. However, it soon became clear that this wasn’t yet the full scope of the new ministry’s responsibilities.
“At a consultation conference in the Prime Minister’s Office, it was agreed between the ministries that my ministry would be responsible not only for mining and metallurgy, but also for nuclear energy, oil, and gas. It will be a ministry that will be responsible for energy resources,” journalists heard two months later during another briefing, this time held at the Polish Mining Group building.
It was in the building on Powstańców Street in Katowice that the ministry headed by Professor Czarnecka found its headquarters. One could say that history has come full circle. After all, this building, erected before World War I as the Prince of Pszczyna Mines Directorate, housed the ministry responsible for the mining sector from 1949 to 1987 (it changed its name numerous times during this time, but its primary area of responsibility always remained the coal sector).
“I am very proud that the central administration is returning to Silesia. This will raise the region’s profile not only on the European stage, but also internationally,” emphasized Minister Czarnecka.
Warsaw officials left for work in Silesia
The new ministry is rather small. Initially, its team consisted of just 35 people. Staff for it was provided by the Ministry of State Assets, from which organizational units dealing with mineral deposits management were separated, and by the Ministry of Climate and Environment, from which the Department of Oil and Gas and the Department of Nuclear Energy were taken over. Interestingly, some of the “taken-over” officials decided to relocate from Warsaw to Silesia at this time. The rest will work remotely from the capital.
Although the Ministry of Industry has been given responsibility for, among other things, mining, the Minister of State Assets retained oversight of mining companies, and he will be the key player in managing these companies. The Minister of Industry, on the other hand, oversees the Central Mining Institute – State Research Institute, the Komag Institute of Mining Technology, the Institute of Fuel and Energy Technology, the Poltegor-Institute of Opencast Mining, and the President of the State Mining Authority.
The social contract remains, but the application for its notification requires changes.
“The most urgent task is to approve the notification application for aid for coal companies,” Minister Czarnecka stated as her priority during the first briefing.
It should be recalled that the aforementioned notification application for state aid, “embedded” in the social agreement signed in May 2021 regarding the transformation of the hard coal mining sector, was sent by Poland to the European Commission in March 2022. Since then, it has failed to obtain the green light from Brussels, but this has not prevented the state from providing subsidies to mining companies as subsidies for production reduction. This raised many concerns about the legality of these actions, and the prospect of them being deemed unlawful state aid constantly loomed over the sector, like the sword of Damocles.
A step towards clarifying the problematic situation was taken on February 5th, when Minister Czarnecka, together with Borys Budka, Minister of State Assets, met in Brussels with EU Commissioners Margrethe Vestager and Maroš Šefčovič on the matter.
“During these meetings, we determined that the social agreement is still valid, but the application submitted for the notification of state aid is poorly drafted and requires correction. This concerns formal issues. This application is simply drafted in a way that is impossible to process in Brussels, given the procedures in place at the European Commission,” Minister Czarnecka told journalists upon her return. As she repeatedly emphasized, the content of the agreement itself (i.e., the subsidy mechanism and the timetable for closing Polish mines) will not be subject to change. Only the application itself requires changes.
“Application amendments will be submitted in March and April. We hope to complete the process by June 30,” said Minister Czarnecka.
Company management boards are supposed to look for savings, and the energy sector is supposed to collect coal from mines.
“The mines will operate as long as there are resources in these mines. This is our assurance from the Ministry of Industry,” Professor Czarnecka said during a December briefing when asked about possible changes to the mine closure schedule. However, in February, she noted that adjustments would need to be made to the mines’ operations in connection with conventional energy.
“As for the details, we will establish a new strategy for both mining and energy generation by June 30th,” she announced. She also noted that by the end of June next year, Poland is expected to present its National Energy Policy until 2040, which will include details on the share of individual energy resources in the energy mix.
Referring to the level of subsidies for reducing hard coal mining, Minister Czarnecka noted that the amount specified in the budget-related act is a maximum amount.
“We will strive to reduce these amounts.” We are currently changing the management boards (of the companies – editor’s note), and I think we have tools, similar to the provisions of the Commercial Companies Code, that allow us to reduce this “gap,” she stated.
Borys Budka, Minister of State Assets, also highlighted the need to reduce “unnecessary costs” in companies. During the official inauguration of the Ministry of Industry in Katowice on March 1st, the head of the State Assets Management Board (MAP) also firmly stated that he expects close cooperation between the new management boards of energy companies and the new management boards of coal companies.
“As long as the Polish energy sector uses coal, it should use coal mined in Poland. I can’t imagine it being like it has been in recent years. For coal from Polish mines to be dumped, while simultaneously importing coal from the East. It’s unacceptable for one state-owned company to import coal of questionable quality, while companies here in Silesia are unable to sell their coal,” Minister Borys Budka stated.
Conversations with industry representatives and trade unionists
In early March, Marzena Czarnecka also met with representatives of the country’s largest energy and coal companies. The aim of the talks was to develop an effective model of cooperation between the commercial energy sector and the hard coal mining industry, in order to normalize the situation related to coal collection from mines by power plants and combined heat and power plants. This was the first meeting of this size, bringing together representatives of the energy and mining sectors. A series of talks is planned, with more to follow soon.
The meeting was attended by representatives of Tauron Polska Energia, Enea, Polska Grupa Energetyczna (PGE), and Polskie Sieci Elektroenergetyczne (PSE). On the coal producers and suppliers’ side, representatives of Jastrzębska Spółka Węglowa (JSW), Polskie Grupa Górnicza (PGG), LW Bogdanka, Węglokoks Kraj, and PGE Paliwa were present.
A few days later, Marzena Czarnecka met with the social partners of Polska Grupa Górnicza (PGG). Among the topics discussed were work on normalizing coal collection. The Minister also addressed the matter of the social agreement notification and confirmed that a new application was being drafted and would be submitted to Brussels. Trade unionists inquired, among other things, about the current functioning of the PGG.
Undoubtedly, Minister Marzena Czarnecka could not count on a smooth transition of the ministry; the hard coal mining, energy, and related sectors pose numerous challenges that urgently need to be addressed.
Michał Wroński, journalist for the regional website SlaZag.pl
Dariusz Ciepiela, journalist for the WNP.PL portal and Nowy Przemysł magazine
The economy, and especially the construction sector, requires stability and predictability, which has recently seemed like a pipe dream. After the economic crisis of 2008-2012, which had negative consequences for construction companies as well, the situation remained relatively stable for a relatively short period. Unfortunately, the SARS-CoV-2 pandemic began in 2019, and in February 2022, the Russian Federation attacked Ukraine, triggering a series of negative phenomena, both macroeconomic and microeconomic.
Crisis situations do not foster economic development; in fact, one could even argue that they are inhibiting and destabilizing factors. In this unfavorable environment, public procurement contracts are now being implemented, presenting a significant challenge for both contracting authorities and contractors. Assessing the long-term effects of the war in Ukraine and their impact on the domestic public procurement market will only be possible after the end of the fighting on the frontlines, and the date remains unknown. For now, it seems only sensible to analyze short-term effects, i.e., those observable and experienced over this two-year period.
The answer to the question of how the war in Ukraine affected the Polish public procurement market will be complex due to the breadth of the issue. On the one hand, we have experienced, and continue to experience, an unexpected and massive outflow of manual workers due to the announcement of the general mobilization of Ukrainian citizens, who constituted a significant portion of the labor pool on Polish construction sites. On the other hand, material prices have risen to unprecedented levels (e.g., the prices of steel and other key materials for the construction sector). On the other hand, legal regulations have been introduced to prevent the escalation of negative phenomena, such as economic sanctions against Russia (on a pan-European scale) and national legislative changes.
OUTFLOW OF EMPLOYEES FROM UKRAINE
The uncertain situation surrounding Ukrainian national workers has led to a number of negative consequences for construction companies utilizing this potential. The number of labor crews has decreased day by day, reducing company efficiency and, in the long run, extending project implementation times. Consequently, Polish entrepreneurs have begun to employ workers of other nationalities, including Belarusians and Moldovans. More and more workers are arriving from Central Asia, South Asia, and the Caucasus region. However, it should be noted that language barriers often pose a problem for these workers. It is difficult to explain to an employee who does not speak Polish or English how and when a specific job is to be completed.
Another negative phenomenon is being observed in the construction industry, related to the outflow of workers from Ukraine. The Union of Entrepreneurs and Employers has published a report entitled “World War I over Ukrainian immigrants. Poland is losing,” which shows that Ukrainian citizens are increasingly choosing countries such as Germany and Canada. The reason for this state of affairs is that wealthier countries offer immigrants from Ukraine more favorable conditions of residence (social benefits, higher salaries, etc.). The report concludes with recommendations outlining the actions necessary to reverse the current trend, such as simplifying legal regulations regarding the status of refugees from Ukraine and revising the labor market to facilitate access for immigrants[1].
PRICE INCREASES FOR KEY MATERIALS
According to the World Steel Association (Worldsteel), Russia is the fifth-largest steel producer in the world. In 2021, the value of steel products supplied from Russia to Europe reached approximately €7.4 billion, placing it in second place after Turkey. The fourth round of European Union sanctions against Russia introduced, among other things, a ban on the import of steel products. The reaction of European markets, including steel mills, was immediate.[2]
Polish steel suppliers faced a crisis. Those who had stocked up on supplies were in a favorable position. Unfortunately, the price increases were so drastic and sudden that even a diligent and experienced entity could not have predicted them.
Since the outbreak of the war in Ukraine, prices have risen not only for steel. Prices have skyrocketed for fuel, energy, gas, cement, aggregates, asphalt, aluminum, timber—all key raw materials for the construction sector. This has forced contractors to incur unplanned additional costs. According to data from an industry report prepared by CCM, “The Outbreak of War in Ukraine and the Increase in Construction Investment Costs in Poland,” when asked “by what percentage have the costs of your construction contracts increased since the escalation of the armed conflict in Ukraine?” A staggering 56% of respondents responded “over 20%.”
The increase in the prices of materials crucial to the construction process, and therefore also to the execution of contracts concluded under the Public Procurement Law, led general contractors to begin requesting increases in their contractual fees from contracting authorities, while material suppliers submitted such requests to general contractors. These were either notifications and claims based on the Force Majeure clause (in the case of FIDIC-based contracts) or requests for contract amendments based on public procurement regulations. In the case of contracts containing an indexation clause, these were indexation requests. Unfortunately, experience has shown that the indexation limits in force after the outbreak of the war in Ukraine (1-5%, depending on the contract and the client) proved insufficient to address the costs incurred. Therefore, industry discussions began, opinions and recommendations were developed, and as a result, the new regulations described below were introduced.
NEW REGULATIONS TO HELP
Act on Special Measures to Counteract Support for Aggression against Ukraine and to Protect National Security
The Act stipulates that the Minister of Internal Affairs is responsible for maintaining and updating the list of entities with which cooperation (awarding public contracts) is prohibited. The regulations specify the mandatory exclusion criterion for public procurement procedures, specifying that entities directly or indirectly linked to the Russian Federation’s military aggression against Ukraine are excluded from the procedure or competition conducted under public procurement regulations. Therefore, public contracting authorities are required to include this exclusion criterion in their procurement specifications.
Act on Amending Certain Acts to Simplify Administrative Procedures for Citizens and Entrepreneurs
A new rule has been introduced: in the event of a change in the price of materials or costs related to the execution of the contract, the public procurement contract must include provisions regarding the rules for amending the contractor’s remuneration. This applies to both construction contracts and contracts for supplies or services. However, there is a condition: the contract must be valid for a period longer than 6 months, and the amendment cannot result in an increase in the value of the underlying contract by more than 50%. Also important for the public procurement market and the construction industry is the admissibility of a public procurement contract due to a significant change in the prices of materials or costs related to the performance of the public procurement contract, which the contracting authority, acting with due diligence, could not have foreseen. Such a change can take various forms, including the addition of provisions concerning changes to the contractor’s remuneration, modifications to them, changes to the scope of the contractor’s services, the deadline, or the method of contract performance. Similarly to the above, the aforementioned changes cannot exceed 50% of the original contract value, and the contractor whose remuneration has been changed by the contracting authority in this way is obligated to change the remuneration due to the subcontractor (to the extent that the change in the prices of materials or costs corresponds to the subcontractor’s obligation).
Opinion of the President of the Public Procurement Office entitled “Admissibility of amending a public procurement contract pursuant to Article 455, Section 1, Items 1 and 4, and Article 455, Section 2 of the Public Procurement Act”[3]
The recommendation specifies the possibility of amending public procurement contracts, even after the contractual (original) contract performance deadline has expired. To quote an excerpt from the document: “The armed conflict in Ukraine and its cross-border economic consequences, manifested, for example, by the disruption of the supply chain, the unavailability of materials, the increase in material and labor prices, and the departure of Ukrainian workers from Poland, can be classified as an external phenomenon that could not have been predicted, despite due diligence (…).” The opinion of the President of the Public Procurement Office provided helpful guidance for contractors processing claims for increased wages and, at the same time, provided a basis for contracting authorities to sign financial and time-based annexes.
Opinion of the General Prosecutor’s Office of the Republic of Poland entitled “Amendment of the contract due to an extraordinary price increase (remuneration indexation) – basic issues”
This document confirmed the aforementioned opinion of the President of the Public Procurement Office, namely that it is possible to amend a public procurement contract due to extraordinary price increases in the market caused by Russia’s invasion of Ukraine. It also emphasized that failure to index the contractor’s fee may result in negative consequences not only for the contractor, but also for the contracting authority (which must consider, for example, the contractor’s bankruptcy and the need to conduct a new procedure). The opinion of the Prosecutor’s Office (following the recommendations of the President of the Public Procurement Office) confirmed that “(…) the rapid, significantly outpacing previous market trends, and unpredictable changes in the prices of construction materials and works currently observed in Poland as a result of the war in Ukraine allow for the amendment of the contract (…).”
How to apply the regulations?
The new regulations described above have led to a challenging period for both contractors and contracting authorities. However, the changes to the indexation limits from 5% to 10% have proven to be a “drop in the ocean” for contractors, who were incurring costs they could not have anticipated at the bid submission stage. According to data published in May 2023[4], the 10% indexation limit is insufficient, considering the pace and level of cost increases for ongoing investments. Of the 35 contracts analyzed under the national road construction program, the indexation limit has already been exceeded in 13 cases, or more than one-third, even though project implementation is ongoing and (increased) costs are still being incurred. The average overrun as of May 1, 2023, was 4.22%. According to calculations, if there were no upper limit, the indexation rate at the end of February 2023 should have been 19.89%.
What does this mean in practice? It may turn out that contractors suffering financial losses will file lawsuits seeking a court-ordered change in remuneration (based on Article 3571 or Article 632 of the Civil Code, depending on the type of remuneration). The rebus sic stantibus clause and its application to the current factual situation is an interesting and complex issue, and therefore could be analyzed separately.
The war in Ukraine and its effects meet the criteria for force majeure, defined, for example, in FIDIC as an event: (i) beyond the control of a contracting party, (ii) against which a contracting party could not reasonably have protected itself during the tender process, (iii) which, if it had occurred, could not have been overcome or avoided, and (iv) which cannot be attributed to the other contracting party. In contracts performed under procurement regulations, it is common practice to define the effects of the war in Ukraine as external circumstances, unforeseeable by entities acting with due diligence and beyond their control.
Reality has shown that the current impact of the war in Ukraine on the public procurement market is being painfully felt primarily by contractors, subcontractors, and suppliers. Since the outbreak of the war, these entities have incurred costs exceeding standard contractual risk, which for a significant number has resulted in financial losses. The industry is grappling with the problem of insufficient indexation, which, as a reminder, is significantly lower than the actual increase in material prices and costs associated with construction projects. Furthermore, there are emerging discussions about why the risk associated with the effects of the war is shared equally between the contractor and the contracting authority. The issue of the lack of indexation in design and supervision contracts remains unresolved. The change introducing mandatory indexation in contracts for supplies and services should certainly be considered a positive development.
The above list only highlights some of the effects of the war in Ukraine on the public procurement market. The issue is complex and evolving. A comprehensive analysis, as well as answers to the questions of whether the introduced regulations should be viewed positively and what other conclusions should be drawn from these experiences, will only be possible after the end of hostilities, when the market has relatively stabilized, as mentioned in the introduction. There is one condition: there will be no further crisis, whose impact could be significant for this market. In this context, it is worth noting the position of the Chairman of the Federation of Polish Entrepreneurs, Mr. Marek Kowalski, who, during the expert debate “Opportunities and Threats for the Polish Construction Industry – Are We Facing a Collapse in the Construction Industry and the Specter of Company Bankruptcy,” spoke of the need to amend public procurement regulations by adding a chapter titled “Crisis,” which would define the conditions for the implementation of public procurement contracts in times of sudden changes in market conditions.[5]
Perhaps such a solution is necessary and would have a beneficial impact on the implementation of public procurement contracts? Time will tell what direction the discussions and actions of industry organizations will take and what impact they will have on public procurement.
Anna Sala – lawyer at ZABOROWSKA Law Firm, specialist in construction law, FIDIC, and public procurement
[1] Source: 11.08.2023-I-Wojna-Swiatowa-o-imigrantow-z-Ukrainy.-Polska-przegrywa.pdf (zpp.net.pl)
[2] Source: The war in Ukraine has shaken the steel market. Here’s what awaits us (businessinsider.com.pl)
[3] Admissibility of amendments to public procurement contracts based on Article 455, paragraph 1, points 1 and 4, and Article 455, paragraph 2 of the Public Procurement Act.pdf (uzp.gov.pl)
[4] Every third road contract exceeded the indexation limit – Infrastructure Market
[5] Source: Marek Kowalski: A chapter titled “Crisis” should be added to the Public Procurement Act (portalsamorzadowy.pl)
Madam President, this year marks the 25th anniversary of GZUG’s operation. Few companies in the mining sector and surrounding areas – and we’re talking about large companies and renowned brands – can boast such a long history in the industry. Therefore, in addition to extending well-deserved congratulations on the anniversary, I’d like us to discuss the last quarter-century of GZUG, its current situation, and your plans for the coming years. First, let’s go back to the roots – I’m referring to 1999, when your story began. Under what circumstances was GZUG established?
As a result of the government program “Hard Coal Mining Reform in Poland in 1998-2002,” it became necessary to adapt Gliwicka Spółka Węglowa S.A.’s employment policy and production volumes to its guidelines. The depletion of coal reserves has accelerated the closure date of the Gliwice mine. As it progressed, there was a surplus of employment in the preparatory and liquidation work departments, which quickly became a pressing problem…
Its solution required a completely new formula and instruments… The newly established GZUG was to become a panacea for surplus employment.
That was the idea. The goal was to both solve the difficult problem of reducing employment in the mine being closed and create jobs for miners wishing to continue working in the mining industry, while simultaneously ensuring the necessary access and preparatory work in the mines of Gliwicka Spółka Węglowa S.A. Therefore, the decision was made to create a business entity called Gliwicki Zakład Usług Górniczych (Gliwicki Mining Services Plant). At the time of the company’s inception, the management board consisted of three members, headed by Andrzej Szumny, M.Sc. Eng. Janusz Imiela, M.Sc. Eng., was the Chairman of the Supervisory Board at that time.
At the dawn of the new millennium, the Polish mining industry was at a completely different point in its history than it has been in recent years. Was it easy for the company to gain momentum? What were the biggest challenges and problems you faced?
The beginning of the millennium was a period of profound restructuring in the Polish mining industry. This was, after all, the launch of the mining protection package. At GZUG, many employees took leave from work, and employment fell to 125. In its first year of operation, the company employed 146 people, while its target was to eventually have 500 employees.
Strikes were a problem, effectively blocking the transfer of employees from the restructured mines. Payment backlogs and the resulting very long payment periods for services, reaching up to 100 days, were also a problem! Current fundraising was a crucial factor given the company’s specific nature, where salaries and employee benefits account for 80% of immediately payable funds.
The company’s shaky financial liquidity was compounded by the company’s scarce, even symbolic, capital expenditures. There was even a period when the company had to sell coal it received from its client for mining services to meet its obligations.
In summary, things weren’t rosy at the beginning…
Yet you managed to survive, and shortly thereafter, GZUG’s development gained momentum. What was the turning point?
Let’s remember that during this difficult period – based on experienced teams capable of independently conducting mining operations – the company managed to build strong professional potential, recruit highly qualified management staff, and develop the ability to physically move employees between mines depending on their mobility needs. This, combined with the extraordinary determination of the then management, paid off in subsequent years.
2003 was considered a turning point for GZUG, when Kompania Węglowa S.A. was established, creating new operating conditions for our company. 2004 was also significant, when, through legal succession, KW S.A. acquired all the company’s assets and shares from Gliwicka Spółka Węglowa S.A.
A year later, an exceptional coal boom occurred, leading to price increases. This, of course, provided a favorable foundation for the development of Kompania Węglowa S.A., which translated into improved operating conditions within our company, a wholly-owned subsidiary.
The range of services provided was significantly expanded, and the number of employees increased to 382. At that time, we were able to acquire, through in-kind contributions, used mining machinery such as the AM-50 roadheader and the ŁBS-1200 loader, and also increase the share capital.
Speaking of the services you mentioned, what exactly does your company do?
GZUG currently employs nearly 400 people, and our core business activities continue to include:
● excavation of underground stone, stone-coal, and coal workings,
● reconstruction of mine workings,
● equipping mine workings with technical equipment and dismantling equipment,
● renovation of underground structures,
● underground drilling,
● independent anchor support and ceiling grouting,
● construction and reconstruction of large-scale intersections.
Will this offer stand the test of time? Or do you plan to add new items? I ask because the European Union’s climate policy, which aims—at least at the declarative level—for a zero-emission economy at the expense of decarbonization, is changing the landscape and prospects for the Polish mining and mining-related sector, which inevitably impacts the operations of the industry companies you target with your offer.
We don’t want to rely on the directions taken by other entities. We are a company that understands the mining industry and its surroundings intimately, and is able to respond to changes.
While Poland is slowly moving away from mining, it’s worth considering the guidelines set out in the Social Agreement and the “Fit for 55” package, which aims to reduce greenhouse gas emissions in the EU by 55% compared to 1990 by 2030, and then achieve climate neutrality by 2050. This clearly indicates that our energy policy must be refocused on renewable energy sources, and for us, this is a good time for transformation and development in other areas that align with the guidelines I mentioned.
Speaking of transformation… We’ve seen countless examples of how the changes and shrinking coal sector are also impacting employee outcomes. Is this impact already being felt at GZUG?
The difficult situation in the mining market is naturally reflected in the mood at our company. In search of stability, employees often change jobs, which, I must admit, significantly destabilizes the company’s operations. Therefore, we are adopting a diversification strategy, signing contracts not only with PGG mines but also entering the market with JSW and the current PKW. As for employees, we naturally strive to ensure their benefits are comparable to those received by mine workers. We strive to raise wages, increase the meal allowance, and so on.
I must admit that the social side plays a significant role in employee relations, and here I extend my sincere thanks to the leaders of NSZZ Solidarność and the August 80 Trade Union for their cooperation. Thanks to them, and specifically to their support, this fight for the good of GZUG becomes easier.
I’d like to talk about your role and experiences. You’re a lawyer by training, specializing in civil, commercial, labor, and business law. Currently, you’re the only woman in our country at the helm of a mining company. How do you find this position, which has been dominated by men (like the entire industry), until now?
I admit that managing a mining company isn’t easy. Nevertheless, my legal experience, combined with excellent management and advisory staff, makes us a “team” capable of effectively tackling even complex and complicated problems. I’m also a lecturer at the WSB University in Chorzów. The experience I gained during my many years as a lecturer translates to improved relationships with the staff employed at GZUG.
Most importantly, in Silesia, strong men, and miners are what they are, hold women in exceptional esteem. This, you could say, is ingrained in the genes of our community. In Silesia, it’s generally accepted that men should earn the money, and women should manage it. Personally, I love this Silesian matriarchy, where women often serve as heads of the family—and our company is nothing more than one large Silesian family.
When did you take up your role? What challenges awaited you?
You could say I wasn’t wading into “uncharted waters.” I had previously served on the Supervisory Board of GZUG for two years. I knew the challenges the company was facing. Therefore, the primary goal was to get the company back on track by signing agreements and contracts that would improve its financial condition.
Today, thanks to our enormous determination, our situation is significantly improving. The attitude of our clients is crucial, and their attitude is changing for the better. After all, it is the execution of contracts that allows GZUG to function properly.
What decisions and factors would you consider key to reversing the trend?
Of course, many factors are key. The most important is the attitude of the owner, who plays a significant role in the company’s operations during difficult times, primarily financially.
Another important factor is, of course, the types of contracts signed, the implementation of which improves its financial condition.
Is it already time when we can talk about some stabilization?
The company’s situation appears relatively stable. We are in the process of signing and implementing sound contracts that will secure operations for the near future.
We are constantly adapting our operations to the changing external conditions, both legal and organizational, related to the transformation of the mining industry in Poland.
We are actively participating in the company’s preparations for effective competition and participation in tenders, which are the primary means of securing work fronts. Above all, we are striving to implement the approved recovery plan for 2024.
Is it true that GZUG has undertaken a bold undertaking of cooperation with prisons?
Yes, in recent years, the GZUG Management Board has made a number of decisions related to recruiting new employees. One of these is establishing partnerships with semi-open prisons. Inmates, often inexperienced, can, after appropriate training, be a valuable addition to the company’s staff.
Our cooperation with inmates has been very positive to date. We currently employ nearly 50 inmates.
This is a win-win situation for both parties. We, as a company, are gaining an employee who is so hard to find in today’s market. On the other hand, convicted employees have the opportunity to gain new professional experience, leave prison, and receive a portion of their salary after serving their sentence. It’s worth noting that some of these individuals continue working for our company after serving their sentences.
Although we’ve already touched on this a bit, I can’t resist asking a little more about your future plans. What changes await the company in the coming years?
As I mentioned earlier, the mining situation in the country is changing, and we also intend to adapt our operations to these changes.
We already know that we want to expand into the directional drilling industry, which significantly helps mines increase the amount of methane captured from the rock mass.
We were invited by the city authorities of Ruda Śląska (it’s worth noting that we provide mining services to the Ruda Mine in Halemba) to collaborate on the development of energy and hydrogen technologies. Because the city authorities believe our company has much to offer in this area, they invited us to collaborate on the “Ruda Śląska Energy and Hydrogen Cluster” project.
We are also open to international collaborations and participation in projects abroad, taking into account the conditions of ongoing climate change and the growing energy crisis.
25 years in the market in a competitive, dynamically changing industry demonstrates the company’s strong DNA. What is your recipe for maintaining this tradition in such turbulent and unstable times for our sector?
Our company’s DNA is nothing more than the type of services we provide, for which there is constant market demand.
Our core business remains, of course, the excavation of stone and coal mine workings, the reconstruction of workings, and the construction of intersections – often very complex and large-scale. However, we have also completed contracts related to shaft closure, reinforcement and decommissioning of longwalls, drilling work, and floor extraction.
The contracts we complete form the basis for the tasks performed by the mines, which directly translates into maintaining planned production levels.
We are proud to say that since the inception of GZUG, we have excavated approximately 150 km of workings, of which over 90 km are coal workings for the exploitation of future longwalls. This, after all, involves preparing approximately 40 longwalls, which directly translates into the extraction of 50 million tons of coal.
Regarding the sector’s stability, the provisions of the Social Contract clearly indicate the existence of the Polish mining industry until 2049. I hope that as long as mines continue to extract coal, they will be forced and willing to use the services of, among others, our company.
What can I wish you for the coming years?
We can certainly hope for the company’s growth. Growth must, of course, be influenced by the number and quality of contracts we conclude. We are a company with a long tradition, but also a company with extensive experience that has managed to survive various, often very difficult periods of operation. I think it’s a good time – and this is, I admit, a small dream of mine – for the GZUG logo to be perceived as a showcase for one of the best mining companies in Poland. Another dream, or rather a goal, is a successful transformation that will enable us to operate in the market after we exit coal mining.
The initial assumptions for the company included a target of 500 employees. I believe this number is currently achievable, especially since today, in addition to its core business, the company could serve as a “hub” for employees seeking employment in coal companies, primarily employees of our company, where, after gaining experience and training, they could become fully-fledged mine workers.
Finally, I would like to thank the entire GZUG staff for their commitment and hard work to date. Without their determination in their work, we wouldn’t be celebrating our 25th anniversary today.
I wish you every success in implementing your plans, and thank you for the conversation.
Interview by: Marcin Hylewski
