The Idiot’s Guide to Running a Country’s Coal Industry … into the Ground

Our case study of worst practices involves two-state owned businesses, Hunedoara Energy Complex and Oltenia Energy Complex. They are both nearly insolvent, while the Government continues to pump money into their rescue, without, however, any real assurance that the effort will be worth it.

Romania extracts coal from two regions, both in the South of the country. Pit coal, with a caloric power of 3,650 kcal/kg, is produced in the Jiu River Valley, in seven mines. Three of them – Petrila, Paroșeni and Uricani – have been nominated for closure by 2018. This will be done by a specially designated company, tediously called The National Company for Closing Down Jiu River Mines.

The remaining four mines (Lonea, Livezeni, Lupeni and Vulcan), along with two thermoelectric power plants in the vicinity (Electrocentrale Paroșeni and Electrocentrale Deva), have been grouped together under the umbrella of the Hunedoara Energy Complex (CEH) under a 2012 governmental decision. CEH, responsible for around 5% of the country’s electricity production, employs over 7,000 people and produces the most expensive electricity in the country at Lei 270/MWh (€60.5/MWh), while electricity is currently being traded at an average of Lei 170/MWh (€38/MWh) on the Romanian energy exchange. However, this is the least of its worries, as CEH has been struggling to survive for some years now, with little respite.

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