The beginning of 2026 was surprisingly favorable for the mining sector in Poland.
Geopolitics and frost, i.e. the last breath of coal demand
It is not about a return of love for coal, but a combination of specific and exceptional circumstances that do not signal a trend change.
Poland faced the coldest January‑February period since 2014. The average temperature at -2,4°C forced the energy system to run at maximum capacity.
Additionally, the war in Iran acted as a fuel for raw materials. The sudden rise in gas prices caused the power sector to compensate with coal.
"Due to these positive demand factors, coal‑based power generation rose by 7,3% year‑over‑year in the first quarter of 2026, and further growth is expected in April 2026 (the coldest April in Poland in 4 years)", said Tomasz Duda from BM Bank Pekao.
"Moreover, the war in Iran affected international coal prices, leading to an increase in the discount of the Polish energy coal price relative to the ARA price by up to 25% in April 2026 from 11% in the fourth quarter of 2025 and compared to the long‑term average of 22%. These positive factors resulted in a drop in coal stocks to 8.5 million tonnes (end of February 2026), i.e. 21% year‑over‑year and 15% below the multi‑year average," added he.
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Bogdanka’s financial results under scrutiny. Why is EBITDA disappointing?
It might seem that with such a favorable macro environment, LW Bogdanka should deliver record results.
Unfortunately, reality is disappointing for investors. EBITDA profit in the first quarter of 2026 was only 25 million PLN. If the company cannot generate solid cash during peak coal demand and extreme frosts, what will happen when the spring‑summer season arrives?
The biggest problem for Bogdanka is not the coal demand itself, but the brutal investment expenditure mathematics (CAPEX). The company is currently at a point where maintaining extraction requires investments far exceeding generated profits.
That, in turn, means forecast negative cash flows (FCF) of over 300 million PLN in 2026 and over 200 million PLN in 2027.
This is a classic value trap because the company burns cash to stay in place.
Analysts from BM Bank Pekao predict drastic cuts in investments (even up to 30%), which may leave dividend‑seeking investors very disappointed.
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Analysts’ verdict? 28% downside potential. "The last dance of coal"
The fundamental analysis leaves no illusion and makes optimism difficult. Demand in Q2 is usually 23% lower than in Q1.
Subsequent months will bring less pressure on stocks, ruling out arguments for a price increase.
Analyst Tomasz Duda from BM Bank Pekao writes in the report directly:
Because we currently consider the probability of coal price renegotiation too low, we maintain the SELL recommendation for LW Bogdanka and set a 12‑month target price at PLN 18.12, which gives a 28% downside potential.
The stock price on the day of the recommendation (April 30) was 25.25 PLN.
Current trading is around 25,35 PLN. For shareholders who expected that the geopolitical turmoil in the Middle East would permanently rescue Polish coal, this is a minor news. Remember that market sentiment costs the most.
Chart. LW Bogdanka share price
Source: TradingView
Read also: Coal is again a "premium" commodity. Some grades cost over 3,000 PLN per ton. What is the coal price?
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