Coal news and updates

Prairie Mining nabs coal mining concession in Poland

Prairie Mining ticked another box at the start of July with the Polish government granting it the exclusive right to apply for and, consequently, be granted a mining concession for the Lublin coal project.

Lublin is a large-scale premium coal project located in south-east Poland in close proximity to essential infrastructure, enabling easy access to key end markets in mainland Europe. In 2014, the company released the results of a scoping study indicating the potential for a world-class high margin metallurgical and premium coal operation.

Importantly, particularly at a time when it is difficult to predict when a recovery in coal prices will occur, the assumed annual operating costs of US$37 per tonne would place Lublin on the lowest position on the global cost curve for coal delivered into Europe.

While Prairie's shares responded positively to the news, they have slumped some 50 per cent since 2014 and this development could spark a sustained recovery.

SI view: Lublin is expected to produce up to 6 million tonnes per annum of high-quality thermal and semi-soft coking coal.

The granting of a mining concession adds a significant degree of certainty to its eventual development, suggesting investors could revisit a company that delivered a seven-fold share price increase in 2012.

source: http://www.afr.com