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Prarie Mining (PDZ) – Concessions Update
JAN KARSKI – POSITIVE RULINGS IN SUPREME ADMINISTRATIVE COURT
Poland’s Supreme Administrative Court has finally and fully rejected Lubelski Węgiel BOGDANKA S.A.’s (“Bogdanka”) administrative complaints against Poland’s Ministry of Environment (“MoE”) regarding the refusal of Bogdanka’s 2013 application for a mining concession over the K-6-7 deposit at the Jan Karski Mine (“Jan Karski”).
This Supreme Administrative Court decision is final, cannot be appealed and has upheld the 2016 Regional Administrative Court decision that confirms the original 2015 decision, which denied Bogdanka’s mining concession application. It has been concluded that granting a mining concession to Bogdanka would be a serious violation of the provisions of Poland’s Geological and Mining Law (2011) (“GML”), and would be contrary to the rule of law as embodied in the Polish constitution.
In a second ruling, the Supreme Administrative Court has upheld the 2016 Regional Administrative Court decision that obliged the MoE to approve Prairie Mining Limited’s (“Prairie” or “Company”) submitted Addendum No.3 for the K-6-7 deposit. Addendum No.3 is a detailed resource estimate for the K-6-7 deposit according to Polish geological reporting standards and is based on the results of Prairie’s exploration program at the deposit. This complaint was bought against the MoE by Prairie in 2015.
The Court’s ruling will now be passed back to the MoE, and the MoE is obliged to promptly reassess the original decision taking into account the court’s verdict i.e., to issue a positive decision approving Addendum No.3. The significance of this Supreme Administrative Court decision is that Bogdanka’s 2018 application for a mining concession over K-6-7 is now entirely inadmissible under Polish law (Bogdanka’s application was suspended following an injunction awarded in Prairie’s favour (see news release dated 26 April 2018)) and requires the MoE to reject Bogdanka’s mining concession application.
The Supreme Administrative Court’s rulings re-affirm, beyond doubt, that Bogdanka’s claims over K-6-7 are without merit and inadmissible. The Board notes that Bogdanka’s claims have been consistently and vigorously rejected by the Polish courts in multiple rulings. Furthermore, the Court’s decision obliging the MoE to approve Addendum No.3 demonstrates that the MoE has acted illegally and failed to correctly implement Poland’s own mining laws.
DEBIENSKO – UPDATE ON CONCESSION AMENDMENT APPLICATION
In December 2016, following the acquisition of the Debiensko Hard Coking Coal Mine (“Debiensko”), Prairie applied to the MoE to amend the 50-year Debiensko mining concession.
The purpose of the concession amendment was to extend the time stipulated in the mining concession for first production of coal from 2018 to 2025. Prairie has now received a final “second instance” decision from the MoE that has denied the Company’s amendment application. Not meeting the production timeframe stipulated in the concession does not automatically infringe on the validity and expiry date of the Debiensko mining concession, which is June 2058. Prairie also holds a valid environmental consent decision enabling mine construction and continues to have valid tenure and ownership of land at Debiensko. However, the concession authority now has the right to request the concession holder to remove any infringements related to non-compliance with the conditions of the mining concession and determine a reasonable date for removal of the infringements. In accordance with Polish law, the concession authority is required to provide an achievable and reasonable timeframe to remedy any non-compliance taking into account the nature of the non-compliance. Nevertheless, the second instance decision may result in the commencement of proceedings by the MoE to limit or withdraw the Debiensko concession.
The MoE has taken over 24 months to finalise the concession amendment proceedings, including seven months to issue a second instance decision, whereas under Polish administrative law there is a maximum statutory deadline of two months for the MoE to issue such decisions.
Prairie will strongly defend its position and continue to take relevant actions to pursue its legal rights regarding the Debiensko concession, including filing an appeal. Preliminary legal advice obtained by Prairie indicates that the MoE’s decision is fundamentally flawed, fails to comply with Polish, EU and international law, and demonstrates yet further evidence of the discriminatory treatment faced by Prairie as a foreign investor in Poland.
The Company will consider any other actions necessary to ensure its concession rights are preserved, which may result in the Company taking further action against the MoE including invoking the protection afforded to the Company under any relevant bi-lateral or multi-lateral investment treaties or such other actions as the Company may consider appropriate at the relevant time.
Prairie will continue to update the market in relation to this matter as required.
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 steel makers.
Australia and Poland are signatories to the 1991 Promotion and Protection of Investment Agreement (a Bilateral Investment Treaty) which provides reciprocal protections for investments made by residents and entities of both countries, including licences for exploration and mining of natural resources. Prairie reserves the right to make future claims against the Polish state under the 1991 Promotion and Protection of Investment Agreement.
For further information, please contact:
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Prairie Mining Limited |
Tel: +44 207 478 3900 |
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Ben Stoikovich, Chief Executive Officer |
Email: info@pdz.com.au |
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Sapan Ghai, Head of Corporate Development |
New Mine in the Lublin province. Will it be built by JSW?
Jastrzębska Spółka Węglowa is interested in Lublin coal. The Silesians are negotiating with the Australian company Prairie Mining Limited the conditions for taking over the rights to the fields located between Siedliszcze and Cyców. It is in this region, specifically in the village of Kulik, that the mine Jan Karski would be created.
– The Polish government is very interested in the creation of the mine in Chełmszczyzna. This is one of the tasks that I supported from the beginning, also supported by the Prime Minister and Minister of Energy Krzysztof Tchórzewski. That is why we organized a meeting with the president of JSW, who will present plans for the Lublin Basin – said Beata Mazurek, deputy speaker of the Sejm during the Friday conference in Chełm.
Daniel Ozon, CEO of JSW, also took part in the meeting in the Chełm Delegation of the Provincial Office. He confirmed interest in coking coal deposits in the Lublin Coal Basin. The technical dialogue on the possible takeover of deposits, JSW and Prairie have been running for six months. – Chełmszczyzna has large reserves of coking coal, which would allow us to increase extraction and reduce production costs. The deposits that interest us are located in the central and south-eastern part of the Lublin province. There are 200 million tons of coal in the area of 151 sq m. The cost of building a mine is estimated at approx. PLN 2.5 billion – Daniel Ozon explained. Prime Minister Mateusz Morawiecki also spoke about the construction of the mine during his short visit to Chełm.
JSW European tycoon
JSW is currently the largest producer of coking coal in Europe. The company estimates that it will extract approx. 5 million tonnes of gas per year. About 2,300 people would find employment in the mine. In the case of works related to the investment and subsequent mining and transport, the number of jobs could increase fivefold.
– After finalising the negotiations, JSW decided that Chełmszczyzna, in which the Jan Karski mine will be established, will be the headquarters of the JSW Wschód Company. We also intend to submit preliminary documents to the Ministry of the Environment in the coming days to apply for the right to geological information about the Pawłów fields, which are located south of the Jan Karski area – declared Daniel Ozon.
As JSW explains, its plans will not affect the operations of “Bogdanka” located in the area of Lubelski Węgiel, which extracts steam coal used in power plants. – There will be no conflict of interest because a different kind of raw material is extracted in “Bogdanka”. I even think that if our project is finalised, we can think about broadly understood cooperation – says JSW president.
The authorities of Prairie and its Polish daughter company PD Co confirm that advanced negotiations are underway with JSW regarding the mine. However, they do not want to reveal details. – Further information will be provided in the form of stock market announcements, in accordance with the regulations – said Ben Stoikovich, president of PD Co.
He has been talking about plans to build a new Prairie mine since at least 2012. In October last year, the company filed with the Regional Directorate for Environmental Protection a request for environmental decision and other documents. Since then, they have been evaluated by RDOŚ.
GPW: Common position on establishing potential cooperation between Prairie Mining and JSW
The Management Board of Jastrzębska Spółka Węglowa S.A. _ “JSW”, “Company” _ informs that on October 10, 2018, JSW continued its discussion with Prairie Mining Limited “Prairie” regarding potential cooperation or transactions regarding Prairie coal projects in Poland. The conversations take place after the six-month stage of technical information exchange – which the Company informed in the current report No. 11 / 2018_.
As a result of the project study, Jan Karski confirmed that part of the “Lublin” deposit contains 
type 34 (semi-soft) gas-coking coal, which can potentially be used by JSW. The study also confirmed the technical possibilities and potential synergies associated with the availability of coal seams from the Dębieńsko deposit using the infrastructure of the neighboring Knurów-Szczygłowice mine. The use of these synergies would involve the necessity to modify the technical conditions of the undertaking and obtain the necessary changes in administrative decisions, including concession decisions. According to JSW, the Szczygłowice Movement infrastructure potentially enables coal mining from the Dębieńsko deposit to 500,000. tons of 35 type ortho-coke coal per year, within 18 months of obtaining the required administrative decisions and changing the concession.
There is no certainty that the talks will lead to the conclusion of any contract, nor is there any certainty as to the form of any transactions.
It should be emphasized that the potential transaction or transactions, if it occurs, may depend on meeting a number of standard conditions, including: obtaining positive assessments and expert opinions, necessary corporate approvals, approvals and approvals regarding financing, consents of the Competition Office and _UOKiK_ Consumers, if they are required, and fulfillment of any other requirements related to the strategy, objectives and regulations applicable to each issuer.
The companies will comply with their obligations to provide the required information to the markets.
Joint Update Statement Regarding Possible Co-Operation between Prairie Mining #PDZ and JSW
Discussions remain ongoing between Prairie Mining Limited (” Prairie “) and Jastrzębska Spółka Węglowa SA (” JSW “) regarding the potential for co-operation and the implementation of the next six weeks months.
The Due Diligence process at Jan Karski project has confirmed that part of the “Lublin” deposit contains a semi-soft coking coal (type 34), which can be potentially utilised by JSW. The JSW’s adjacent Knurów-Szczygłowice mine. Exploiting those synergies would require modifications. JSW estimates that access via the Szczygłowice mine potentially enables the implementation of legal permits and concession amendments are granted.
There can be no surety transaction (s) or co-operation will be agreed, or the co-operation.
It is underlined that any potential transaction (s), should not occur, is required for funding, Consents and Consents. Protection (UOKiK) if required, and any other requirements that may relate to the strategy, objectives and regulatory regimes.
The companies will continue to comply with the relevant markets, as required.
Common position on establishing potential cooperation between Prairie Mining and JSW
Prairie Mining Limited (” Prairie “) and Jastrzębska Spółka Węglowa SA (” JSW “) are continuing the discussion on potential cooperation or transactions regarding Prairie coal projects in Poland. The talks follow the six-month stage of technical information exchange.
As a result of the project study, Jan Karski confirmed that part of the “Lublin” deposit contains type 34 (semi-soft) gas-coking coal, which could potentially be used by JSW. The study also confirmed the technical possibilities and potential synergies associated with the availability of coal seams from the Dębieńsko deposit using the infrastructure of the neighboring Knurów-Szczygłowice mine. The use of these synergies would involve the necessity to modify the technical conditions of the undertaking and obtain the necessary changes in administrative decisions, including concession decisions. According to JSW, the Szczygłowice Movement infrastructure potentially enables the extraction of type 35 ortho-coke coal from the Dębieńsko deposit seams within 18 months of obtaining the required administrative decisions and changing the concession.
There is no certainty that the talks will lead to the conclusion of any contract (s), and there is no certainty as to the form of any transaction (s).
It should be emphasised that the potential transaction or transactions, if it occurs, may depend on meeting a number of standard conditions, including: obtaining positive assessments and expert opinions, necessary corporate approvals, approvals and approvals regarding financing, consents of the Competition Office and Consumers (UOKiK), if they are required, and fulfilment of any other requirements related to the strategy, objectives and regulations applicable to each issuer.
The companies will comply with their obligations to provide the required information to the markets
Prairie Mining #PDZ see shares rise on WSE as the chance of JSW asset purchase and resolution of MoE dispute looks increasingly likely
Coal mine (photo: Jakub Orzechowski / Agencja Gazeta)
Even by over 18 percent. On Tuesday, shares of the Australian company Prairie Mining on the Polish stock exchange were ticking. The situation from the end of March is repeated. And then, today, the minds of stock market players lit up the news about the sale of assets of Prairie Mining Jastrzębska Spółka Węglowa (JSW).
The sharp rise in pricing of the Prairie Mining stock seems to be connected with the statements of Daniel Ozone, President of JSW, published on Monday evening. In an interview with PAP Biznes, he spoke about his company’s intentions regarding Prairie Mining’s assets.
– We analyze all Prairie assets in Poland, although assets in the Lublin region are more distant, complicated. I would like us to be able to make certain decisions in July. Various options are possible: theoretically, there is an option to take over the entire Prairie, as well as individual assets, because each concession is in a subsidiary – Daniel Ozon explained.
These words, together with the additional explanations of the president who told PAP how he wants to finance the purchase of assets from Australians and that the decision to buy JSW would like to take place in July, caused the Prairie Mining course to start on Tuesday. A few moments after the start of the session, the shares of the Australian company cost over 18 percent. more than on Monday at closing. Moments later, they were a bit cheaper, but they still gain a lot.
What does JSW want to buy from Prairie Mining?
Jastrzębska Spółka Węglowa (JSW) wants to buy from Prairie Mining above all the Karbonia company, which has a mining license for the closed Dębieńsko mine located south of Gliwice. Australians have it since 2016 – they bought it for 2 million euros from the bankruptcy of NWR.
The Dębieńsko mine was established in 1898 and operated until 2000. In 2006, it was bought by the Czech coal concern NWR, which two years later received a 50-year mining license. Since October 2016 , design work in Dębieńsk has been carried out by Prairie Mining.
– The new Dębieńsko mine will extract high quality type 35 coal. The evaluation study published in March 2017 showed an average operating cost of $ 47 / ton with a stable production of 2.6 million tonnes. This will be the lowest production cost of coking coal delivered to markets in Central Europe, according to Prairie Mining’s press release from February.
The Dębieńsko mine is ideally suited to the JSW portfolio. Let us recall the coal company that specializes in the extraction of coking coal used in metallurgy. He also wants to significantly increase his extraction. It will be difficult to do without a new mine.
Prairie Mining also wanted to build a coal mine Jan Karski in the province Lublin. The facility was to be built near the place where the mine is being led by the Bogdanka mine and extracting steam coal.
Prairie Mining in a dispute with the Ministry of the Environment
Importantly, Prairie Mining shares grow after strong declines at the end of May – this is clearly seen in the chart below.
Quotes Prairie Mining Stooq.pl
The shares of the Australian company were then cheap because of the information that the Ministry of Environment (Ministry of Environment) rejected the request of Prairie Mining Limited for changes in the concession for the Dębieńsko project. The resort does not agree that the Australians will postpone the deadline for starting production in the mine for 2025. Earlier, Prairie Mining was to launch it in January this year.
-. Prairie is convinced that the reasons for the decision are flawed and do not take into account legal requirements, public interest, company facts and change requests, which provides further evidence of discriminatory treatment of Prairie as a foreign investor in Poland – we read in a company statement from the end of May .
In addition, the company added that the ministry needed 17 months to issue a decision, while it was legally obliged to respond to the request within two months.
The Ministry of the Environment also has doubts about signing an agreement with the Australians on the so-called mining use in the case of the Jan Karski mine. Without it, the construction of a new facility is impossible. At the beginning of April, Prairie reported that it had begun court action against the Ministry of the Environment due to the failure to grant mining rights in the area covered by the law, including the planned mine, Jan Karski.
All this suggests that our government is not sympathetic to Prairie Mining’s investments in Poland. It seems that it is trying to force the company to sell assets controlled by the JSW state. Risky game – it can end with another expensive process and compensation for a foreign investor.
The text comes from the blog PortalTechnologiczny.pl .
Prairie Mining #PDZ – Align Research comment re legal proceedings in Poland
In recent weeks shares in Prairie Mining have been experiencing a bit of a rough ride on concerns about licence issues for their key coal asset in Poland. When we initiated coverage on Prairie in September 2017 we did point out that the company was a potential world-class hard coking coal supplier with two low cost projects in Poland to supply Europe’s leading steel makers. Additionally, we saw the company as a likely acquisition target.
In July 2015, Prairie Mining was granted the exclusive right to apply for the Mining Concession at Jan Karski until 2 April 2018. The Deposit Development Plan and the Spatial Development Plan were approved in May and August 2017 respectively. On 30 November 2017, Prairie submitted the Environmental and Social Impact Assessment (ESIA) which independent consultants confirmed met all the necessary requirements. As yet, the company has not received the necessary Environmental Consent decision and so has been unable to apply for a Mining Concession at Jan Karski.
On 03 April 2018, the company provided an update on the Jan Karski concession. Basically, Prairie has been waiting some while for the required Environmental Consent decision. The approval of Prairie’s Geological Documentation in 2015 also gave the company the legal right to apply for a Mining Usufruct Agreement over Jan Karski for an additional 12-month period beyond April 2018. This serves to stop any other parties being granted any licence over all or part of the Jan Karski concessions. Under Polish law, the Ministry of Environment (MoE) is strictly obligated, within three months of Prairie making an application for a Mining Usufruct Agreement, to grant the agreement. Legal advice provided to Prairie concludes that failure of the MoE to grant the company the Mining Usufruct Agreement is a breach of Polish law. As a consequence of this failure the company has now commenced legal proceedings against the MoE through the Polish courts in order to protect the company’s security of tenure over the Jan Karski concessions.
The feeling on the ground is that the delays of the MoE might be just down to inefficiency in a government department. As true world-class assets, these coal projects are important to Poland and so there is big local support for the jobs that they will provide along with the potential benefits to the local and national economies. The legal action very neatly brings these delays to the attention of the Polish people as well as the politicians.This latest news came just days after it was announced that the company disclosed a co-operation agreement with Jastrzębska Spółka Węglowa SA (JSW) concerning Prairie’s Jan Karski and Debiensko projects. Interestingly enough JSW which has a market cap in excess of £2 billion is 55% owned by the Polish Government.
Truth is that this latest event seems to be par for the course in being involved in high profile projects in Poland and such an event seems to pop up every couple of years and company has been here before. In September 2014, Prairie was advised that the Polish Ministry of the Environment had officially rejected an application from Lubelski Wegiel BOGDANKA S.A. for a mining concession over the company’s K-6-7 coal concession in Poland. The main point is that Prairie has successfully legally dealt with such an issue before.
We this believe that the current weakness could serve to provide a good buying opportunity once further clarification occurs.
Link here to view the article on the Align Research website
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