Polish coal mining company Kompania Weglowa is to cut jobs, close mines and receive financial support from state-owned power utilities following a rescue plan backed by the government.
Businessweek reported that, according to the Economy Ministry, the government plans to gradually phase out operations at the company's four mines.
As part of the plans, one mine will be sold to coal trader Weglokoks and the remaining nine profitable facilities will be moved to a new holding company.
Weglokoks and state-owned power producers are already in discussions over sales of stakes in the new group.
More than 1,000 workers at the mines are said to have commenced strikes in protest against planned job cuts, according to Dominik Kolorz, chairman at one of the industry's unions.
Producing a fourth of the hard coal in the EU, Kompania has struggled to survive as sluggish economic growth lowered demand for the fuel.
Within a one-year period, the company's total output from nine mines is expected to reach around 29 million tonnes.
Weglokoks will pay cash to the company for its four mines and cancel debt owed by the coal group in the initial asset transfers stage. The company later plans to shift the remaining five mines to the new holding group.
The country, which relies on coal for 90% of its electricity production, has been under growing pressure to overhaul the industry after its two biggest producers failed to sell bonds to finance operations in the year 2014.