28 Coal International • May June 2015 Coal International • May June 2015 29
Key factors that drive the
Czech Republic coal industry
ince the beginning
of 19th century
there has been
extensively
coal mining in
the country,
and it is still an
important part of the nation’s economy.
Coal was the key driver for the country’s
industrial revolution and helped develop
not only of the country, but also the
rest of the Austrian-Hungarian Empire.
In fact, when the Empire dissolved,
90% of its bituminous coal production,
as well as 84% sub-bituminous coal
production were located within the Czech
boundary: this had a massive impact
upon the Empire’s economy. During the
socialist era, coal was the key source of
domestic energy production. Production
peaked in the late-1980s when around
130Mt/y of coal was produced. This
tremendous level of production has
dropped significantly over recent
decades, compounded in no small part
by environmental issues. In addition,
the country´s deposits are becoming
depleted, and as a result the industry
has had to develop in a way that aims to
maximise its profitability.
COAL IN THE CZECH REPUBLIC
Coal fired power plants, a crucial part
of the energy sector for the Czech
Republic, have an installed power
capacity of 10,819MW. Thermal
power plants (powered by brown coal,
bituminous coal, biomass and light fuel
oil) in the Czech Republic provided
44,737GWh of electricity in 2013, which
is 51.4 % of the total gross electricity
produced. (see Energeticky regulacni
urad, 2014, p. 4, 11)
	 It is important to appreciate that the
coal sector in the Czech Republic is
basically divided into two parts: brown
coal and bituminous coal. Both of these
sectors have their own energy security
issues and energy mix diversification
influences. From the Czech energy
security point of view, it is the brown coal
sub-sector that is the most significant.
	 The chart (below) shows all the
150+ MW power plants in the Czech
Republic including life expectancy,
which is one of the most crucial aspect
of the Czech coal industry. As seen
in the chart, the life expectancy of the
power plants is short, with electricity
production from coal having two peaks:
S
CZECH COAL INDUSTRY CZECH COAL INDUSTRY
The coal industry of the Czech Republic has a long and distinguished history. Tomáš Vlček and
Martin Jirušek, both of the Energy Security Program, Department of International Relations and
European Studies, Faculty of Social Studies, Masaryk University, Brno, Czech Republic, examine
the key factors of an industry that has spanned three centuries and yet still continues to supply
the country with the majority of its power requirements.
the first is likely to be around 2025, and
the second around 2040.
	 It is generally accepted that coal
accounts for between 50 and 66% of the
overall operational costs of the country’s
coal fired power plants, which as a result
is very sensitive to price fluctuations.
Figure 1 shows 13 years of historical
prices of coal in the world market.
	 The fluctuation caused by the world
economic crisis of 2008 is obvious (see
above). Unfortunately a potential ‘return’
to normal, was adversely impacted by
an overall economic stagnation leading
to flat industrial production. Since the
market has not yet fully recovered, the
demand, and therefore the price of
coal is still low. In addition, fixed costs
have continued to rise due to tighter
environmental laws and associated
regulations. However, following a
temporary slowdown in growth in 2009
in the wake of the global financial and
economic crisis (see OECD & IEA,
2012, p. II.21), investment in coal mining
resumed its upward path in 2010. It is
anticipated that the coal market will fully
recover in the near future.
	 In the Czech Republic, only those
entities with a permit from the relevant
District Mining Authority can mine coal.
These companies are obliged to pay
mining royalties. All mined materials
within the Czech territory are state
owned at the point of their extraction,
with the state permitting extraction and
trade of such mineral upon payment of
the relevant fees. Extracted coal then
becomes the property of that particular
company. The monies raised in fees are
directed into a special account for mine
remediation and restoration purposes.
BITUMINOUS COAL SUB-SECTOR
Shortly after the fall of communism, the
Czech Republic started restructuring its
bituminous coal production, taking into
account changes in energy consumption.
Within the industrial sector, shifting
from a planned economy to a market
economy, led to a significant drop in
energy demand. The restructuring
process is clearly seen by comparing
what happened in 1993 (when 73 black
coal deposits existed, of which 26 were
mined) to 2014 (when 62 deposits
existed, of which only 4 were mined).
(See Ministerstvo hospodarstvi Ceske
republiky & Ceska geologicka sluzba –
Geofond, 1993, pp. 65-66; Ministerstvo
zivotniho prostredi & Ceska geologicka
sluzba – Geofond, 2013, pp. 147-148)
	 Currently, the bituminous coal sector
has been negatively impacted by
world markets. The low prices of coal
(especially that of bituminous quality)
means low mining profits. Mining
bituminous coal is much more costly than
that associated with extracting brown
coal. Czech bituminous coal is mined in
deep underground shafts in the Silesian
region, unlike the brown coal that is
Tab. 1: Coal Power Plants in the Czech Republic with more than 150 MW of Installed Capacity
Power Plant Owner Installed Capacity Connected to the Grid Fired on Life Expectancy*
Detmarovice CEZ, a. s. 800 MW 1975 - 1976 Bituminous coal 2020-2030
Chvaletice Severni energeticka a.s. 800 MW 1977 - 1978 Brown coal 2020-2029
Kladno Alpiq Generation (CZ),
s. r. o.
299.1 MW 1976, 1999 Bituminous coal,
brown coal
2045-2050
Komorany United Energy pravni
nastupce, a. s.
239 MW 1959, 1978, 1986, 1994,
1997, 1998
Brown coal** 2025
Ledvice II CEZ, a. s. 220 MW 1966-1968 Brown coal 2015
Ledvice III CEZ, a. s. 110 MW 1998 Brown coal 2040-2055
Ledvice IV CEZ, a. s. 660 MW 2014 - 2015 Brown coal 2055
Melnik (II) CEZ, a. s. 220 MW 1971 Brown coal 2015-2020
Melnik (III) CEZ, a. s. 500 MW 1981 Brown coal 2015-2020
Melnik (I) Energotrans, a. s. 352 MW 1961, 1994 - 1995 Brown coal ?
Opatovice Elektrarny Opatovice,
a. s.
378 MW 1979, 1987, 1995 - 1997 Brown coal 2020-2030
Pocerady CEZ, a. s. 1,000 MW 1970 - 1977 Brown coal 2029+
Porici CEZ, a. s. 165 MW 1957 Brown coal ?
Prunerov II CEZ, a. s. 1,050 MW 1981 - 1982 Brown coal 2015-2023
(2040***)
Prunerov I CEZ, a. s. 440 MW 1967 - 1968 Brown coal 2015-2023
(2040***)
Tisova I CEZ, a. s. 183.8 MW 1959 - 1961 Brown coal 2020+
Tisova II CEZ, a. s. 112 MW 1959 - 1961 Brown coal ** 2020+
Trebovice Dalkia Ceska
Republika, a. s.
174 MW 1961, 1998 Bituminous coal,
light fuel oil
2015-2020
Tusimice II CEZ, a. s. 800 MW 1974 - 1975 Brown coal 2035
* According to public open sources.
** The Komorany power plant is also partially fired on natural gas. One 55 MW block of the Porici power plant and one 57 MW
block of the Tisova power plant employ a biomass combustion.
*** After completion of the modernization process that is due in 2015.
Source: Energeticky regulacni urad, 2010, p. 88, 92; Energeticky regulacni urad, 2012, p. 24. Livelong expectancy and overall
adjustments by T. Vlcek.
30 Coal International • May June 2015 Coal International • May June 2015 31
CZECH COAL INDUSTRY CZECH COAL INDUSTRY
mined in large open pits in northern
Bohemia. Price fluctuations impact
bituminous coal production more than
that of brown coal production.
	 The production costs in 2013 were
approximately $77 per mined tonne
of bituminous coal. Averaged yearly
prices for 2013 amounted to $111/t for
coking coal and $62.4/t for energy coal.
(See Moniova & Stalmach, 2014; New
World Resources). At current long-term
coal price assumptions, production of
bituminous coal beyond 2023 is not
expected to exceed 2Mtpy. (See New
World Resources, 2014, p. 29)
	 OKD (which prior to January 1991,
was known as Ostravsko-Karvinske
Doly,) is the country’s only miner of
bituminous coal. OKD is fully owned
by the Dutch company, New World
Resources N.V (NWR).
	 OKD leads the mining works in the
Darkov, CSM, Karvina (former KarvinaLazy
and Karvina-CSA mines) and
Paskov underground mines. There is
also the Frenstat mine, built in the 1980s,
but never put into production despite
reserves estimated at 1.6 billion tonnes.
Since the estimates were 30 years old, in
September 2011 NWR announced that it
would undertake some 4 years of surveys
for data clarification, (See Raska, 2012)
after which the future of the mine would
be decided. As the mine is in vicinity of
the Beskydy Protected Landscape Area,
strong local opposition against the mining
already exists, and will no doubt play a
part in any future endeavors.
	 OKD also plans to continue mining in
the Karvina region for another 20 years.
In addition, the company has decided to
try to extract coal from the Polish side
of the border through an underground
route from the CSM Mine. The mine
in question, Morcinek, is owned by the
Polish company Jastrzebska Spolka
Weglowa S.A., and was shut down
approximately 11 years ago, although
it was not mined to its full capacity.
In 2007, agreements with the Polish
government, as well as a Letter-of-Intent
with Jastrzebska Spolka Weglowa were
signed, leading to a feasibility study.
	 The Morcinek project involves two
sub-sites: Morcinek 1 and Zebrzydowice
1. In 2003, NWR received a 12-year
exploration license for Morcinek 1 subsite,
and in 2008 a 6-year exploration
license for the Zebrzydowice 1 site to
map and document the reserves. After
the geological work was completed
on Morcinek 1, in November 2012,
the Polish Ministry of Environment
approved the request for the inclusion
of the reserves found into the official
list of the country’s coal reserves.
This classification is necessary for the
preparation of development plans, and
in particular represents a major step
forward in obtaining a mining license.
	 Meanwhile, the company continues
its preparations at the CSM mine
for possible future mining activities.
Completion of this process should take
a few years, but it is still cheaper that
sinking a new $454m shaft at Morcinek.
(See Vlcek & Cernoch, 2012, p. 122;
Cinert, 2014; New World Resources;
“NWR: Sloucime tezbu”, 2014)
	 On the subject of international trade:
more than 74% of OKD’s production
is destined for domestic markets and
goes to the most significant consumers:
ArcelorMittal Ostrava, Trinecke
Zelezarny, Group–Moravia Steel, OKK
Koksovny, Dalkia Ceska Republika,
and CEZ. The remainder is exported,
specifically to Austria, Slovakia, Germany,
Poland and Hungary (See OKD). The
trade balance in 2012 amounted to 3,390
million tonnes of clear exports (See
table 5). Black coal is among the most
important items of the country’s foreign
trade. Table 6 shows historical imports
and exports of bituminous coal and
metallurgical coke.
	 When speaking about the territorial
directions of the coal export and import,
in 2013 the top three recipient countries
of Czech bituminous coal exports were
Austria ($160m), Poland ($140m) and
Slovakia ($11m) followed to a lesser
extent by Germany, Hungary and
Sweden. The top three importers of
bituminous coal to the Czech Republic
in 2013 were Poland ($18.0m), USA
($10.0m) and the Russian Federation
($3.0m) followed by negligible amounts
from Australia, Germany and Slovakia.
(see Cesky statisticky urad) The territorial
directions of the coal export and import
to and from neighboring countries are
shown in table 7.
	 In the Czech Republic, the price
of coking coal of OKD dropped from
$208.9 per tonne in 2011 to $103.3 per
tonne in 2014, and that of thermal coal
dropped from $84.0 per tonne in 2012
to $61.3 per tonne in 2014. (See New
World Resources, 2014, p. 47). As a
result the low profit from bituminous coal
mining eventually led to the plan to close
down one of the four bituminous coal
mines, (the least competitive, Paskov
mine). This led to social problems in the
affected area. Fortunately, OKD, the sole
producer of bituminous coal in the Czech
Republic, employs only 3,003 employers
in the affected Paskov mine. (See OKD,
2014, p. 9) Furthermore, the Czech
government promised to contribute
$24.5m on social programs for the
miners from the affected Paskov mine, if
the company extended the operation until
2017.
	 The negative effects on the country’s
energy profile were limited by the fact
that only about half of the coal is used
for energy production. This coal is used
in the country’s only fully bituminous coal
power plant (800 MW Detmarovice),
as well as a few bituminous coal cogeneration
units (28 MW Kladno I-B3
and 174 MW Trebovice). The current
domestic bituminous coal production
takes into account the demand of these
Source: Edison Investment Research Fig. 1: Historical Coal Prices
Tab. 2: Cash mining costs ($ per tonne)
2010 2011 2012 2013
80.6* 93* 80.6 88.5
* All costs incurred in coal mining including administrative and non-cash costs.
Note: Cash mining costs per tonne reflect the operating costs incurred in
production of both coking and thermal coal.
Source: New World Resources, 2014, pp. 2, 41
Tab. 3: Key Indicators of the OKD Company
Indicator Units 2013 2012
Mines - 4 4
Production
tonnage
tonnes 8,610,000 10,796,000
Sales tonnage tonnes 9,709,600 10,245,000
Profit before tax $m -976 63
Profit after tax $m -804 49
Operating profit/
loss
$m -895 89
Net operating
cashflow*
$m -48 266
Total asset
value
$m 904 1767
* before tax, changes to working capital and extraordinary items
Source: OKD, 2014, p. 2
32 Coal International • May June 2015 Coal International • May June 2015 33
CZECH COAL INDUSTRY CZECH COAL INDUSTRY
facilities, as well as their life expectancy.
The rest of the mined coal is high-quality,
and is intended for use in metallurgical
coke production. The mine with the
highest life expectancy is CSM, which
produces coal for energy production.
Currently, it is relatively easy to find
clients for thermal coal, compared to that
for metallurgical coke following the recent
economic slowdown and lower demand
for metallurgical coke by the steel
industry.
	 The current state of world market
and the drop in demand for coal, has
obviously led to financial problems. For
example, OKD has undergone general
restructuring since 2013 that started
shortly after New World Resources (the
owners of OKD) presented the economic
results for Q1 2013. This process will
take a few more years to complete and
has several aims. Firstly, $114m savings
in 2013 followed by more savings in the
years to come; secondly, dropping the
production costs to $68 per tonne; thirdly,
250 administrative employees to be laidoff
followed by further lay-offs in supply.
companies and elsewhere; fourthly,
closure of the high-cost Paskov mine.
(See CBU & ZSDNP-ST, 2014, p. 13)
It was also intended that between 500
and 600 employees will be laid-off on an
annual basis from 2014 onwards. (See
“NWR: Sloucime Doly”, 2014) This is not
a full list of its aims.
	 Still, the problems are by-and-large
local in nature, mostly due to the fact
that the Czech Republic enjoys a well
diversified energy mix. The negative
effects of a highly volatile resource sector
(particularly in terms of coal) are obvious.
BROWN COAL SUB-SECTOR
In Table 8, the exploitable reserves
of brown coal are shown. One can
clearly see the life expectancy of the
two above-mentioned power plants
expectancy peaks, i.e. the current
electricity production from coal until
the end of production. It is thus
understandable that the only new
coal fired power plant, Ledvice is to
be constructed in the vicinity of the
coal mine that has the same portfolio
as the CEZ Group power plant. This
logic will be expanded upon later.
	 There are three companies active
in the extraction of brown coal in the
Czech Republic: Severoceske, Czech
Coal Group, Sokolovska Uhelna and
Pravni Nastupce. Severoceske Doly
holds almost 50% of the Czech brown
coal market and is fully owned by
the CEZ Group. Czech Coal Group
is owned by Indoverse Czech Coal
Investments Ltd. (50 %) and Czech
Coal N.V. (50 %), and holds almost
one third of the Czech brown coal
market. Sokolovska Uhelna holds the
balance of the country’s brown coal
market. Total brown coal amounted
to 846Mt in 2012. (See Ministerstvo
zivotniho prostredi & Ceska
geologicka sluzba – Geofond, 2013,
p. 152).
	 Following the charts 1 and 7, it is
unsurprising that the key topic in the
Czech coal sector in the last decade
is the issue of territorial ecological
limits on brown coal mining guided
by the Government’s Resolution No.
444/1991 in the North Bohemian
Basin of October 1991. This
resolution specified the final lines of
mining and landfill in the following
mines: Merkur, Brezno, Libous,
Sverma, Vrsany, CSA, Lezaky,
Bilina and Chabarovice, as well as
in the Ruzodolska and Radovesicka
landfills. In addition, it set out the
limitation values of air pollution in
the regions Chomutov, Most, Teplice,
Usti nad Labem and Louny basins.
(See Vlada Ceske republiky, 1991)
The idea behind these limits was
to provide the regions with some
sort of governmental guarantee
that the city environment would not
deteriorate further, and provide the
inhabitants with a stable datum upon
which to base local investments,
reconstructions, etc. The topic of
territorial ecological limits on brown
coal mining, has been on the political
agenda for several years now.
However, a degree of urgency arises
as to how these limits will impact
upon privately-run coal companies as
they approach their end-of-life. The
companies are going to mine out the
deposits, resulting in the local coal
fired power plants losing a rather
cheap sources of coal. That is the
reason why since 2003 they have
started emphasising (sometimes
fervently) the increasing risk of an
energy crisis, huge blackouts and the
collapse of both electrical and heat
supply grids. (See Vlcek & Cernoch,
2013b, p. 81)
	 However, the problem with the
Czech coal sector does not lies
primarily with the territorial ecological
limits of brown coal mining, but
with the market’s unpreparedness,
including that of its heating plants.
Their dilemma is based on uncertain
coal prices and, as a result, how
mining companies will react, which
up to now have been relatively
predictable. As coal supply dwindles,
so a rise in its price due the large
volumes of coal needed to operate a
power plant which necessitated inland
transportation over larger distances.
Indeed, although the approval of the
limits were passed 24 years ago, this
was insufficient for the majority of
heating plants/and or power plants to
replace their fuel bases. That means
that these same plants must (and
will) buy coal, which leaves them at
the mercy of the mining companies.
(See Vlcek & Cernoch, 2013b, p. 82-
83). The majority of the coal supply
contacts expire between 2013 and
2015, and the mining companies can
either track their prices to the stock
market on a short-term basis (in small
volumes) or at higher prices on longTab.
4: Exploitable Reserves of Bituminous Coal
Mine Exploitable
Reserves
Production* Life Expectancy** Number of Employers***
Karvina**** 23,975 2,621 6.7 4,422
Darkov 12,216 2,651 4.1 3,264
CSM 29,200 2,475 10.7 3,494
Paskov 850 863 - 3,003
Total 66,241 8,610 - 14,183
* As of 2013
**Calculated as Exploitable Reserves divided by 3-year average production, both coke and energy coal included
*** As of 2013; including supply companies
**** Created by joining former mines CSA and Lazy in 2008
Note: figures in thousands of tons; Exploitable Reserves as of Ministry of Environment of the Czech Republic geological
statistics; Life Expectancy in years. Mines Karvina and Darkov will be connected in one mine from 2015. The expected
year of definitive end of bituminous coal production is 2040 according to Ministry of Industry and Trade.
Source: OKD, 2014, p. 7-11; OKD, a.s.; calculations of life expectancy by T. Vlcek.
Tab. 5: Czech Foreign Trade of Bituminous Coal, Briquettes and Similar Solid
Fuels Manufactured from Bituminous Coal
Indicator Units 2011 2012
Import thousand tonnes 2,398 1,979
Export thousand tonnes 6,257 5,369
Average import price $ per tone 163.1 142.1
Average export price $ per tone 154.7 135.9
Note: as prices of black coal are considered confidential in the Czech coal
industry, these are qualified estimates.
Source: Ministerstvo zivotniho prostredi & Ceska geologicka sluzba –
Geofond, 2013, pp. 148-149. Calculations to EUR by T. Vlcek using Czech
National Bank yearly average exchange rates.
Tab. 6: Import/Export of Bituminous Coal and Metallurgical Coke in History
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
BC Import 1,203 1,217 1,281 1,568 1,220 1,997 2,508 2,241 1,903 1,982
BC Export 5,713 5,689 5,669 5,576 5,254 6,517 6,805 6,082 6,516 6,271
MC Import 0,868 0,946 0,944 0,756 0,510 0,705 0,735 0,519 0,536 0,885
MC Export 0,527 0,523 0,700 0,958 0,913 0,956 0,807 0,830 0,562 0,875
Note: figures in thousand tones
Source: Cesky statisticky urad
34 Coal International • May June 2015 Coal International • May June 2015 35
CZECH COAL INDUSTRY CZECH COAL INDUSTRY
term contracts.
	 The policy not to prolong contracts
with heating/power plants originated
from the Czech Coal Group. The
company extracts coal from the
CSA mine, where the greatest
volume of coal behind the limits is
to be found. Should the limits be
maintained, the Czech Coal Group
will be left with no coal in its CSA
mine by 2021, and in its Vrsany
mine by 2058. Alternatively, should
the limits be breached, the mining
in the CSA mine will be prolonged
(in the first stage) until 2068, until
2115 in the second and until 2145
in the third phase. (See Skupina
Czech Coal). The other companies,
Severoceske Doly, Sokolovska Uhelna
and Pravni Nastupce, extract coal
and simultaneously operate (through
their daughters or shareholders) their
own coal fired electricity and heat
power plants. On one hand, they have
assured sales of coal, but on the other
are not capable of supplying surplus
coal to the market. (See Vlcek &
Cernoch, 2013b, p. 83)
	 Czech Coal Group struggled to
acquire its own coal fired electricity
or heat power plant in order to
increase the value of its coal. The
biggest dispute took place between
Czech Coal Group and CEZ Group
for the Pocerady power plant (5x 200
MW). Czech Coal Group, originally
Mostecka Uhelna, terminated a “socalled”
contract with CEZ Group
to provide it with coal for the next
decade. This started a “war for coal”
as CEZ Group unsuccessfully sued
the Czech Coal Group for $410m in
damages arising from the impossibility
of realisation of the investment project
for the renovation of its coal portfolio
in Pocerady due to termination
of the contract. (See Horacek &
Klimova, 2010). At the same time, the
termination of this contract led CEZ
Group to change its investment plan
in Pocerady from the coal-fired power
plant to a combined gas-and-steamcycle
power plant of 840 MW, installed
capacity in March 2011. One of the
first solutions to this market dispute
was the potential swap of coal fired
power plant Pocerady for the brown
coal mine CSA of the Czech Coal
Group’s portfolio. This transaction was
interrupted in 2009 by EC inspection
investigating this transaction
suspected market manipulation. (See
Vlcek & Cernoch, 2013a, p. 466).
	 The estimated life expectancy of the
four units of the power plant between
2012 and 2015 was associated with
the original (and logical) replacement
of these outdated coal units by a new
coal investment project. The power
plant could then be supplied with
coal from the company Severoceske
Doly (which is fully owned by the CEZ
Group). The negotiations on the new
contract for the supply of brown coal
were simultaneously complemented
by negotiations on the price of coal
and also on the sale of a coal-fired
power plant from the CEZ portfolio.
An agreement was finally reached in
2012, when the original contract was
nearing its end and the Czech Coal
Group still had not secured sufficient
sales of mined coal. (See Vlcek &
Cernoch, 2013a, p. 466.) The Czech
Coal Group and CEZ Group agreed
in December 2012 on a 40-year
contract (ie until the mining out of the
Vrsany mine). Shortly after the deal
was signed, the Chvaletice power
plant from CEZ’s portfolio was sold
to the Czech Coal Group. Also, the
EC investigation was curtained after
an agreement was secured that CEZ
would sell one 800+ MW power plants.
	 The Chvaletice power plant was sold
for $170m (plus 90% of the market
price of CO2 allowances allocated free
of charge of $18.5m) to the company
Litvinovska uhelna, daughter of the
Czech Coal Group. (See Tesar, 2013).
Officially, this sale was presented
as independent of the coal contract.
Within the agreement with the EC, a
tender for the sale of the bituminous
coal Detmarovice power plant was
opened, however, the tender was
unsuccessful because the low market
price of electricity discouraged
potential investors.
	 The outcome of the “war for coal” is
a good example of the current trend in
the coal sector of the Czech Republic.
Both sides are now in control of the
whole coal fuel chain. The mining
company Czech Coal Group now
operates its own power plant, where
the fuel demand is securely covered
from its own mine, CSA, for the rest
of the life expectancy of the power
plant. Meanwhile, the CEZ Group has
secured a long-term coal supplies until
2060 for its Pocerady power plant that
will not only cover the rest of the life
expectancy of the power plant, but
also creates an option for investments
into prolonging the life of the power
plant. Similar situations occur involving
other players in the Czech coal
market, e.g. in the dispute over Melnik
power plant between Energotrans
and the Czech Coal Group, or in the
dispute over Opatovice power plant
between Energeticky and Prumyslovy
holding and the Czech Coal Group.
SUMMARY
The Czech bituminous coal sub-sector
is widely affected by the fluctuations
in world price levels. The fluctuations
caused by economic crisis are clearly
a key factor driving the current
changes and restructuring of the
bituminous coal sub-sector. This sector
is becoming extremely sensitive to
market development and the closure of
the Paskov mine may be the first step
in the collapse of the sector. This would
definitely lead to more significant social
problems than that caused by the
laying-off of 3,003 employers.
	 Fortunately, the negative effects
are limited due to the existence of
domestic consumers as the price of
coal rises with increased distance
from the mine. Also, as the bituminous
coal producers´ reserves cover the
energy bituminous coal consumers, the
market actors are minded to make as
much profit as possible before the total
loss of their business. This notion is
especially true in the brown coal sub-
sector.
	 Another key reason limiting the
negative effects within the coal industry
is the fact that the Czech Republic
enjoys a diversified energy mix (as
seen in table 9).
	 The brown coal market within the
Czech Republic behaves in a similar
fashion. Against the background of
the end of the coal industry they are
making efforts to maximize their profits
by coupling the coal production with
the coal consumer (i.e. the power
plants). Mining companies buy coal
fired electricity or heat power plants,
while the operators of such power
plants are trying to buy their own
mines or to secure long-term contracts.
The latter two unresolved disputes,
discussed previously, are amongst the
last disputes in an otherwise (now)
stabilised Czech brown coal sub-
sector.
	 The primary factor driving the Czech
Republic’s brown coal industry is the
‘territorial ecological limits’ on brown
coal mining. This overarches all the
activities of players within the coal
market, and leads them to secure the
whole coal chain to maximise their
profits in the last years or decades of
their coal sector. The ownership of the
whole fuel chain (even though through
daughters) seems to be the primary
target that the key coal market subjects
are aiming for.
	 The negative aspects (especially that
associated with bituminous coal) are
connected to expensive coal mining,
low market prices of electricity and the
high variable costs of the electricity
production from coal fired power
plants.
	 The coal industry also attracts
strong competition with other sources,
especially nuclear energy with very
low variable costs but enormous fixed
costs, which is essentially the reason
the tender for two new nuclear units at
the Temelin site was cancelled. Finally,
one have to stress that the greatest
negative impact of the total dissolution
of the bituminous coal sub-sector
would not be in the field of energy
security, but in the sphere of export.
This is due to the well diversified
energy mix as well as the specific
use of this coal (metallurgical coke
and export in the first place, domestic
combustion in the second).
SOURCES
Cesky bansky urad, &
Zamestnavatelsky svaz dulniho a
naftoveho prumyslu - Spolecenstvo
tezaru. (2014). Hornicka rocenka
2013. Ostrava: Montanex a.s.
Cesky statisticky urad. Retrieved from
http://vdb.czso.cz/
Cinert, V. (2014, September 11).
NWR od noveho roku slouci doly
Karvina a Darkov a uvazuje o
nove metode tezby. Fio banka a.s.
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zpravodajstvi/zpravy-z-burzy/152186-
nwr-od-noveho-roku-slouci-doly-
karvina-a-darkov-a-uvazuje-o-nove-
metode-tezby
Energeticky regulacni urad. (2010).
Rocni zprava o provozu ES CR
2009. Praha: Oddeleni statistik ERU.
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elektrina/statistika-a-sledovani-kvality/
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Energeticky regulacni urad. (2012).
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elektrina/statistika-a-sledovani-kvality/
rocni-zpravy-o-provozu
Energeticky regulacni urad. (2013).
Rocni zprava o provozu ES CR
2012. Praha: Oddeleni statistik ERU.
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user_data/files/statistika_elektro/
rocni_zprava/2012/RZ_elektro_2012_
v1.pdf
Energeticky regulacni urad. (2014).
Rocni zprava o provozu ES CR
2013. Praha: Oddeleni statistik ERU.
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elektrina/statistika-a-sledovani-kvality/
rocni-zpravy-o-provozu
Energostat. Retrieved from http://
energostat.cz/
Horacek, F. & Klimova, J. (2010,
October 20). CEZ zazaloval Czech
Coal. Pozaduje 10 miliard korun.
iDNES.cz. Retrieved from http://
Tab. 7: Territorial Export/Import of Bituminous Coal, Brown Coal and Lignite
to/from Neighboring Countries
Q1 2012 Q2 2012 Q3 2012 Q4 2012 2012
Poland 45.6/60.7 54.5/53.0 44.5/45.0 35.0/40.2 178.5/200.0
Slovakia 66.9/0.3 611/0.4 61.4/0.3 55.1/0.4 244.6/1.4
Austria 51.7/ 0 67.2/0 68.0/0 30.6/0 217.4/0
Germany 1.0/1.0 2.2/3.0 3.5/2.3 4.0/2.5 10.7/8.8
Q1 2013 Q2 2013 Q3 2013 Q4 2013 2013
Poland 42.7/46.4 44.0/46.4 35.1/41.8 42.4/50.1 164.2/1820.3
Slovakia 32.9/04 34.9/0.3 33.4/0.4 39.0/0.2 140.1/1.3
Austria 38.4/0 47.5/0 43.1/0 32.1/0 161.0/0
Germany 9.3/0.3 8.5/2.0 10.1/1.6 15.6/0.6 43.5/4.5
Note: figures in million $
Source: Cesky statisticky urad
Tab. 8: Exploitable Reserves of Brown Coal
Basin Company Mine Exploitable Reserves
North Bohemian
Basin
As of Jan 2013 Life Expectancy
Czech Coal Group
CSA 41.3 2017 (4.5) 2021 (3)
Vrsany, Sverma 259.7 2044 (8) 2055 (7)
Centrum 1.3 - In
total 302.3 - Severoceskedoly,
a. s.
Tusimice 227.2 2030 (13) 2035 (10)
Bilina 154.4 2031 (9.5) 2036 (7)
In total 381.6 - -
Sokolovska
Sokolovska uhelna,
pravni nastupce, a. s.
Jiri
142.9
2023 (5to6) 2034 (4)
Druzhba 2030 (4) 2034 (4)
In total 142.9 - The
Czech Republic in total 826.8 - Note:
Exploitable Reserves in millions of tons. Life Expectancy in years, possible annual production in millions of tons in
brackets.
Source: Energostat
36 Coal International • May June 2015 Coal International • May June 2015 37
ekonomika.idnes.cz/
Ministerstvo hospodarstvi Ceske
republiky, & Ceska geologicka sluzba
– Geofond. (1993). Surovinove
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zdroje
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republiky – Nerostne suroviny 2013
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zdroje
Moniova, E. & Stalmach, D. (2014,
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New World Resources. Retrieved
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eu/
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NWR: Sloucime doly a zkusime
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trhu/2014/9/11/vykonny-sef-okd-v-
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Kopacka, L. (1980). Energeticka
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okd.cz/
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cz/cs/o-nas/vyrocni-zpravy
Organization for Economic Cooperation
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Raska, J. (2012, June 22). Analyzy
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cz/analyzy/100153-nwr-potvrzene-
doporuceni-koupit/
Tesar, M. (2013, March 19). CEZ
proda chvaletickou elektrarnu
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www.patria.cz/
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cz/usneseni/usneseni_webtest.nsf/We
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Vlcek, T. & Cernoch, F. (2012).
Energeticky sector Ceske republiky.
Brno: Masarykova univerzita.
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Vlcek, T. & Cernoch, F. (2013b).
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Masarykova univerzita.
ACKNOWLEDGMENTS
The feature was prepared within
Masaryk University’s “Europe in
changing international environment”
project, and with the support from the
Polish Adam Smith Centre in Warsaw.
Tab. 9: Installed Capacity in the Czech Electricity Grid on 31 December 2012
Type of Power Station Installed Capacity (MW) Percentage (%)
Thermal Power Station 10644 51.9
Gas Combined Cycle
Power Station
521 2.5
Gas Fired Power
Station
750 3.7
Hydroelectricity 1069 5.2
Pumped-storage
Hydroelectricity
1147 5.6
Nuclear Power Station 4040 19.7
Wind Power 263 1.3
Solar Power 2086 10.2
Geothermal Power 0 0
Total 20520 100
Source: Energeticky regulacni urad, 2013, s. 11.
CZECH COAL INDUSTRY
Tomas Vlcek is a researcher at the International
Institute of Political Science and lecturer at the
Energy Security Program, International Relations
and Energy Security and Center for Energy
Studies at the Masaryk University in the Czech
Republic. His scholarly interests include energy
security of the Czech Republic and the CEE
region, especially the electricity utility sector and
nuclear sector.
Martin Jirusek is a lecturer at the Energy Security
Program, International Relations and Energy
Security and Center for Energy Studies at the
Masaryk University in the Czech Republic. Martin
is professionally focused primarily on theoretical
approaches to energy security and the oil policy
of the United States.
EQUIPMENT
S
iemens has widened its
portfolio of planetary gear units.
The Planurex 3 is available
in ten sizes, with a torque range
from 1,700 to 5,450kNm. This raises
the highest torque in the standard
modular system from the previous
2,600kNm up to 5,450kNm. The size
grading is harmonised to reduce
the jump in power ratings between
different sizes. This makes a suitable
torque and a suitable transmission
ratio available for almost every
application.
	 The gear units also have the highest
efficiency in their class. This has been
achieved by increasing the torque
density (Nm/kg) by an average of
17.2% in comparison to the previous
series. A compact design enables
space-saving, high transmission ratios
to be achieved. This not only reduces
the weight, but also the stress on the
gear unit and application.
	 Planurex 3 is part of an integrated
drive system (IDS), which is available
as a complete solution, comprising
motor, gear unit and coupling,
combined with an oil supply system.
The integrated drive system facilitates
economic, efficient plant operation, as
the components are perfectly matched
to one another.
	 The technologically further
developed Planurex series 3 replaces
the Planurex 2 planetary gear unit
series, initially in the XL range up
to 5,450kNm. The harmonized size
grading across the entire torque range
allows better dimensioning of the gear
units. Thanks to their ruggedness, all
sizes of the new planetary gear unit
can absorb peak loads up to twice
their rated torque. Siemens has also
extended the warranty on the Planurex
3, and shortened its delivery times.
	 Planetary gear units are primarily
installed where high output ranges
are required in limited space. They
are typically used as roller press and
central drives for mills in mines.
	 For further information see www.
siemens.com/Planurex3
Siemens offers new series of planetary gear
I
n the ever-evolving world of mining,
ensuring up-to-date communication
is vital to aspects of exploration and
production. Dangerous conditions often
contribute to volatile situations and the
SATcase, a revolutionary new device,
can help to improve the safety of all
involved on a project by enabling reliable
communication.
	 Because most potential and
operational mine sites are in areas where
mobile phone service is poor or even
unavailable, the simplest, most costeffective
solution has previously been
to employ the use of a satellite phone.
However, satellite phones can be bulky
and users are often frustrated by the
need to carry multiple devices to take
care of different tasks.
	 However, the state-of-the-art SATcase
combines the functionality of the common
smartphone with the capabilities of
a satellite phone into one compact
and durable unit, creating the perfect
communications tool for both managers
and workers. Working in conjunction
with an app, the ruggedised case makes
calls simple and seamless. It has also
been designed to stand up to the tough
working conditions found at exploration
sites.
	 Information can be securely relayed
the second conditions erupt that may
have long-term consequences, and
this enables companies to respond in
ways that can save invaluable time and
money. Additionally, in the event of a
disaster, the device is equipped with
multiple emergency functions that can
facilitate rescue by land, air or sea. This
includes an SOS button, two way rescue
communications, online track and trace
for live monitoring, silent alarms and
infrared strobes.
	 HSE personnel will find
that this tool is vital to
maintaining communication
and to facilitating
the tracking
of lone and
remote
workers who
are often
endangered.
These
capabilities
remove any
uncertainty,
helping
search-andrescue
teams
to save lives
more efficiently
and reducing
the financial
costs often
incurred during an operation.
	 Since those using the SATcase
have access to their own smartphone,
they can use the device with certified
company apps enabled through the
satellite system. Users can eliminate the
need to carry multiple devices, because
the device has multiple functions. As a
bonus, it’s also compact enough to fit
into a jacket pocket.
	 Jim Thomson, founder and CEO
of SATcase, commented: “We feel
confident that those in…industry will
find our device essential to their daily
routines. We’ve used cutting-edge
technology to develop a piece of
equipment that will stand up to the
impact of extreme outdoor conditions,
yet also be capable of exhibiting
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	 The SATcase includes a smart mix of
rescue and personal security features,
enabling workers and individuals to
remain in constant communications
via voice, text and email, whilst being
monitored and tracked outside of mobile
phone coverage. A global communicator,
powerful work tool and life-saving device
in one, the SATcase provides a unique
set of services for adventurers, mariners,
aviators, remote/lone and tele-medicine
workers and more. For more information,
please visit www.satcase.com
SATcase maintains vital communication for the industry