The expected loss for the state-owned Maritsa East Mining Company is projected to surpass BGN 200 million (around 100 million euros) in 2024, an increase from BGN 137.4 million in 2023, Caretaker Energy Minister Vladimir Malinov said during a Parliamentary hearing on Friday. He spoke of the financial status and prospects of the mining company.
Malinov attributed the deteriorating financial condition of the company to halted coal deliveries to Contour Global TPP. Since February, the company has only been supplying raw materials to three thermal power plants in the Maritsa basin. Consequently, the board of directors has revised this year’s coal production forecast down from 17.4 million tonnes to 11.6 million tonnes.
Mini Maritsa Iztok has halted new overburdens.
The financial shortfall has resulted in mines being unable to meet their contractual commitments to suppliers. Accrued liabilities have reached BGN 57.6 million, with obligations under existing contracts surpassing BGN 44 million. This sum includes an outstanding concession fee of BGN 3.1 million owed to the Ministry of Energy. The company’s receivables are inadequate, as detailed in the Minister’s report.
The financial struggles of the state-owned company have led to a hiring freeze and layoff of retirement-eligible employees, in line with the Collective Labour Agreement. Additionally, the company has altered its two-shift work system, halting operations during peak electricity price periods to cut costs. Repair work is now conducted internally instead of by external contractors, further reducing expenses. Fuel expenditures have also been cut.
Malinov confirmed that Mini Maritsa Iztok has settled all payables to its staff and the budget, except for the concession fee to the Ministry. To facilitate this, Malinov authorised a financial arrangement providing BGN 150 million from the Bulgarian Energy Holding (BEH) and various commercial banks to Mini Maritsa Iztok. The package includes a BGN 100 million lending facility from BEH and a BGN 50 million business loan, with BEH as a co-obligor. All expenditures from this loan by the mines require BEH’s approval, BTA reports.
