In the night from September 26 to 27, 2016 a landslide process began at an internal heap in the Turów lignite mine. The mine temporarily limited coal mining activities what resulted in slight reduction of generation capacity of the Turów power plant. This limitation meant that the amount of surplus sales contracts above production capacities in Turów Power Plant were transferred to other free generating capacity in the PGE Capital Group. Production of electricity from PGE Group entities resulted from a new level of distribution contracting for individual generating units and was realized with accordance with the needs of the National Power System.
A rescue operation intended to secure equipment and infrastructure was completed on October 5, 2016, and the situation around the landslide stabilised. Coal supply to the power plant was continuous, drawing from a coal reserve, which stores fuel inventories, and thanks to the launch of additional mining walls. From October 7, 2016, an overburden removal operation is taking place, removing overburden that is covering lignite deposits. As a consequence of the slide a stacker and part of transportation system and associated infrastructure were destroyed. Due to the above in 2016, the Company recognized costs at the amount of PLN 19 million which comprised impairment losses of damaged assets and net value of liquidated property, plant and equipment.
Current geological-engineering situation around landslide is stable. Till the end of 2016 full supply of coal to adjacent Turów Power Plant was restored, with reception of ash provided and a limited amount of overburden. Numerous design works have been conducted in order to adapt the transporting system of the internal heap and pit mining to the occured situation. The additional expenses related to securing the landslip and recovering the full technical efficiency amounted to PLN 23 million in 2016. Total compensation received in 2016 amounted to PLN 49 million.
Supply of fuel to the Turów Power Plant proceeds without any limitations and the working of power units in Turów Power Plant goes according to the plan and requirements of domestic energy system.
Estimated, as at December 31, 2016 and as at the date of publication of these consolidated financial statements, value of costs and capital expenditures for the years 2017-2019 essential to restore damaged and lost assets due to the landslip amounts to approx. PLN 142 million. The amount comprises mainly expenses related to reconstruction of stacker, construction and reconstruction of conveyor belts and grading of internal heap.