Prairie stock falls as Debiensko concession amendment is denied

The Polish Ministry of Environment (MoE) has denied Australian miner Prairie Mining’s application to extend the production starting date of its Debiensko hard coking coal mine, a decision which Prairie said on Tuesday it would appeal.

In terms of the mining concession that the MoE issued in 2008, Prairie was to start production at Debiensko by January 1, 2018, but the company has applied to have that date extended to 2025.

The company maintains, however, that not meeting the production timeframe stipulated in the concession does not infringe on the validity and expiry date of the mining concession, which is June 2058.

Prairie said that it would appeal the MoE’s decision, but cautioned investors that should its appeal be unsuccessful, it might lead to the MoE limiting or withdrawing the Debiensko concession.

Prairie’s shares took a beating on Tuesday, falling significantly on the three exchanges where it is listed. In Sydney, the stock traded 8.51% lower and in Warsaw, shares fell by nearly 14%. On the LSE, the company’s stock plunged 31%.

The coal junior, which also owns the Jan Karski mine in Poland, said in a statement that the MoE’s Debiensko decision was “further evidence of discriminatory treatment” as a foreign investor in Poland.

“Prairie has always conducted its business in Poland in accordance with the Polish law and continues to pioneer the application of international standards for development and feasibility work in Poland necessary to ensure the value of its tier-one coking coal projects are maximised for all stakeholders, meet the rigorous requirements for international financing and can ensure the production of high-quality coking coal product to regional European steelmakers,” it stated.

The miner recently took the MoE to court to secure its rights at the Jan Karski mine, after it failed to secure a mining usufruct agreement, while it awaits the environmental consent required to apply for a mining concession. The Polish Civil Court has ruled in its favour.

Prairie said that it reserved the right to make future claims against the Polish state under a 1991 bilateral investment treaty between Poland and Australia.

 

Source:www.miningweekly.com