(Adds quotes, minister’s comments on bondholders)
PRAGUE, Jan 5 (Reuters) - Hard coal mines in eastern Czech Republic will close by 2022 and the government wants the hard coal industry to gradually wind down, led by cash-strapped miner New World Resources , Industry Minister Jan Mladek said on Tuesday.
A sharp drop in global coal prices has hit coal producers, and NWR has said it may run out of cash later this year unless it secures new financing. It has already said it would have to close at least one but possibly more mines.
The government has promised to help people who lose jobs but ministers have repeatedly rejected any aid that would benefit the company.
The coal miner’s representatives and the government are due to meet on Jan. 14.
“The future of the whole OKD (NWR’s production unit) is not clear and what we would like to see is some kind of soft landing, gradual closing of the mines,” Mladek told reporters.
“The region must prepare itself for life after coal. (Which) will happen probably in 2022 at the latest,” he said.
Mladek said NWR’s Paskov mine would almost certainly close by the end of this year, earlier than previously agreed. Paskov is one of the group’s four mining locations.
The company predicts the loss of Paskov and Lazy mine, which it says is also at risk of closure, could cost thousands of jobs. The firm has about 13,000 employees.
NWR has said the costs of mine closures and layoffs will be 85-100 million euros ($91-107 million). It has asked government for an unspecified amount of assistance. A union chief has said NWR had asked for nearly 150 million euros in government aid.
Mladek said the government’s relations with the firm could possibly improve if bondholders took greater control of the firm.
The government and unions have long had poor relations with Zdenek Bakala, who together with other investors has controlled the firm for over a decade.
$1 = 0.9334 euros Reporting by Jan Lopatka, Editing by Michael Kahn and Katharine Houreld