August 25, 2015 / 1:50 PM / 4 years ago

Poland unions warn of strikes over mine rescue as elections loom

KATOWICE, Poland, Aug 25 (Reuters) - Poland’s mining trade unions have threatened possible strikes from October if the government fails to find investors for coal producer Kompania Weglowa, a major trade union representative said on Tuesday.

In an agreement signed in January, the government promised miners that by the end of September it would find investors to safeguard Kompania Weglowa’s survival.

The agreement followed a series of miners’ protests which forced the government to back away from a plan to shut down some mines.

“We demand that the government’s commitments are kept in respect to the mines and also the region,” Dominik Kolorz, regional head of Solidarity union, told a news conference.

He said unions would be ready to go on strike at any time from the beginning of October at all mines in the southern industrial region Silesia.

Kolorz said not only Kompania Weglowa faced difficulties but also coking coal producer JSW and KHW.

“September salaries may be the last ones that JSW and KHW workers will receive,” Kolorz said.

The government had hoped to persuade power producers PGE , Enea and Energa, to inject money into Kompania Weglowa, but that has not worked out.

They have proved reluctant to invest, as have other blue-chip companies.

“The government’s intention is to continue the restructuring process at Kompania Weglowa, and to meet the conditions of the agreement. We expect the same approach from all the sides of the agreement,” Emil Gorecki, spokesman at treasury ministry said.

In the January agreement the trade unions pledged they will refrain from protests in the time when the restructuring plan for Kompania Weglowa is carried out.

Analysts say the government is keen to aid Kompania Weglowa to avert possible protests ahead of parliamentary elections set for October.

“The Prime Minister wants to avoid social unrest at all costs,” said one person familiar with the situation.

The government, facing a tough re-election battle, cannot afford to let the miners go on strike because it depends on votes from Silesia. Kompania Weglowa employs around 49,000 people, accounting for around half of the country’s mining sector.

Kompania Weglowa is cutting costs and selling its coal reserves at below-cost prices, a practice criticised by competitors.

Bogdanka, Poland’s only private listed miner, has said Kompania Weglowa is luring away clients with its cheap coal. Major client Enea this month announced it was terminating a long-term coal supply contract with Bogdanka. (Reporting by Wojciech Zurawski in Katowice and Agnieszka Barteczko in Warsaw; editing by Jason Neely and Susan Thomas)

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