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Prairie Mining #PDZ: Poland’s JSW seeks tighter grip on coking coal with possible Prairie bid – Via Reuters

Via Reuters – Agnieszka Barteczko, Barbara Lewis

WARSAW/LONDON (Reuters) – Poland’s JSW (JSW.WA) is considering a bid for control of Prairie Mining (PDZ.AX) to tighten its grip as the EU’s biggest coking coal miner, two sources familiar with the situation said.

FILE PHOTO: A miner walks outside the JSW mine where coal miners are missing underground after a strong quake hit the mine on Saturday in Jastrzebie Zdroj, Poland May 7, 2018. Agencja Gazeta/Dominik Gajda via REUTERS/File Photo
Coking coal is on the European Commission’s list of critical raw materials of economic importance with the price of Chinese coking coal futures DJMcv1 tripling since 2015.

State-run JSW and Australia’s Prairie, which is developing mines in Poland, have been in cooperation talks for much of this year but JSW wants control, according to the sources.

“JSW is considering a takeover of Prairie,” a source familiar with the situation told Reuters on condition of anonymity. Another person, who also could not be identified, also said he expected a takeover bid.

Poland’s prime minister and energy ministry have provisionally approved the plan, one source said.

The state-run company’s plan comes as the country faces nationwide local elections in October and reflects the ruling Law and Justice (PiS) party’s pledge to create jobs. The party also wants strategic assets returned to state ownership.

Prairie Mining has been developing coking coal at the Jan Karski mine in southeast Poland and the Debiensko mine in Silesia, Poland’s industrial heartland in the south.

A JSW spokeswoman declined to comment on the takeover plan but said the miner was assessing Prairie’s projects and may release more information by mid-September.

Prairie Mining declined to comment.

Highly polluting thermal coal, used to generate power, is increasingly difficult to mine in Europe as banks refuse to fund it. Coking coal, used in steel-making, is considered to have a better future.

“If Poland develops quickly, then we will need more steel and coking coal. In the case of JSW, it is obvious that the company is looking for more deposits,” Energy Minister Krzysztof Tchorzewski said this week.

The energy ministry was not available for immediate comment on the JSW takeover plan.

A handful of foreign investors are keen on mining Poland’s coking coal.

The sources said they expected the Polish government to reject a project by private British firm Tamar Resources, which wants to mine coking coal at a Silesian mine previously operated by JSW as a thermal coal mine

Tamar CEO George Rogers told Reuters he will keep fighting to run the project, which he said would provide at least 2,000 jobs.

The Solidarity trade union has asked the government to hold a tender seeking an investor to revive the mine and the union will back whoever wins, said Dominik Kolorz, head of the union’s Silesian branch.

“If Tamar wins, we would back Tamar,” he said, adding the ministry had yet to reply to the request for a tender.

Additional reporting by Wojciech Zurawski; editing by Jason Neely

ShareProphets – Prairie Enters a Legal Tussle. But Have its Shares Been Oversold?

By Malcom Stacey

Hello, Share Wallowers. In recent months I’ve featured Prairie Mining (PDZ). It has an interest in two projects in Poland where the company hopes to produce coal suitable for turning into coke.

The latter stuff is vital for the making of steel. And steel is becoming more and more needed to feed the growth of infrastructure in developing countries, not to mention more established areas of industry. I bought the shares for about 30p and saw them rise to more than 50p, partly I suspect because two big investment institutions came on board. Then came a whammy. There is now a legal tussle with the Polish government.

When the news came the share retreated to my original buying price in a shake of a donkey’s tail. But I think the selling may well be overdone and the result might be a second chance to buy the shares cheaply.

As usual, with mining matters, the situation is complex. But as far as I can gather, the Polish government has not confirmed an environmental consent within a three month required time-frame. So Prairie has launched a legal case against the Polish Dept of the Environment to secure its position.

Now, whenever court action is mentioned a lot of investors take fright and drop the shares. But there is talk that a Polish administrative department has simply not dealt with things within a time limit. Polish politicians will, after all, want the local jobs that Prairie will bring to coal mining. And Prairie reckons that its legal action will bring the possibility of a lost opportunity to the attention of local residents who may not be pleased by the delay.

We can’t predict the end of any legal case, where we don’t know all the facts. And taking on a government is rather daunting. But I will certainly not sell my shares until we know the outcome.

And now the Punter’s Return is open.

Link here to view the article on ShareProphets

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