Czech Coal says current contract prices of coal for municipal heating companies in the Czech Republic are too low and it wants a larger share of profits. Meanwhile, the heating companies charge that the miner is abusing its monopoly position, consumers will face considerably higher bills, and the rise in prices will threaten the viability of the industry.
Under current contracts, municipal heating plants pay between Kč 40 and Kč 45 per gigajoule. The current contracts between the mining company and the municipal heaters are gradually expiring. Czech Coal announced on Wednesday that it will offer new contracts for coal supplies for the period 2012–2022 but at a considerably higher price.
“The new price could be around Kč 70 per gigajoule,” Czech Coal spokeswoman Gabriela Benešová said. At the same time, she denied that the mining company, majority owned by Pavel Tykač, is planning a blanket 50 percent price rise. “Each contract will be done individually, and the prices will depend on this,” Benešová said.
Czech Coal claims there is now a shortage in coal, that prices are rising, and the heating companies must adapt to lower profit margins. “The problem is the heating companies are used to high profits and we want a share of those margins. But we will supply coal to all heating units, it’s just a question of price,” the vice chairman of the Czech Coal executive board, Jan Dienstal, said before Wednesday’s announcement.
Director of the association of heating companies, Tomáš Drapěla, dismiss Czech Coal’s claim that prices under the current contracts are too low. “All [coal] mining companies are prospering well with the current prices,” he told the Czech New Agency (ČTK). ‘This would dramatically raise the price of heat and lead to the total destruction of the system of central supply of heat.’
A major player on the Czech heating market, Enegetický průmyslový holding (EPH) — 40 percent owned by Petr Kellner’s PPF Group, 40 percent by J&T Group, and 20 percent by the entrepreneur Daniel Křetínský — says the planned price rise amounts to Czech Coal abusing its dominant position on the market and could threaten the very existence of the heating industry.
“That price is simply unacceptable because it would considerably raise the heating companies’ costs for producing heat, and, at the same time, they would have to completely stop producing electricity for economic reasons. This would dramatically raise the price of heat and lead to the total destruction of the system of central supply of heat,” EPH spokesman Martin Maňák told ČTK.
