1. Most Discussed
  2. Gainers & Losers

Prairie Mining says near deal with Chinese banks to fund Polish mine

Bookmark and Share
  1. LONDON, Oct 12 (Reuters) - London-listed Prairie Mining PDZP.L is in advanced talks with Chinese lenders to finance its coking coal mine project in Poland, its chief executive said.

    Prairie, which is also listed in Australia (PDZ) , is developing the Jan Karski mine in south eastern Poland and bought the Debiensko mine last year with a view to becoming a supplier of cheap coking coal in Europe where most steelmakers import their coal.

    Upfront capital costs for the development of the Jan Karski mine totals $630 million with Chinese lenders expected to financing 85 percent of it, Chief Executive Ben Stoikovich told Reuters.

    The company signed a deal with state-owned China Coal No. 5 Construction Ltd in November last year for the construction of the mine and to help secure Chinese funding.

    "We want their technology, we want their expertise and that is why we have partnered with them," Stoikovich said, adding that China Coal had a good track record of developing mines quickly and at competitive costs.

    Chinese coking coal futures DJMcv1 jumped over 160 percent in 2016 as years of oversupply came to an end but prices are mostly flat this year.

    Prairie's London-listed shares PDZP.L are up about 50 percent this year, adding to gains of around 200 percent in 2016. The price was unchanged at 33 pence on Thursday.

    The company is also embarking on a drilling programme to inform its redevelopment plan for the newly acquired Debiensko mine. The mine, which was mothballed in 2000, will be modernised to make it a low cost producer at a cost of about $500 million.

    "The mine tended to use old fashioned mining methods," Stoikovich said. "We are going in with a very Australian view - how do we automate this as much as possible."

    In addition to tapping Chinese banks for funding, Prairie could look at raising cash from London investors for further development in future, Stoikovich said.

    Discuss this via PDZ

Before making any financial decisions based on what you read, always consult an advisor or expert.

The aim of HotCopper News is to report and comment on news in the financial and investment markets. HotCopper provides no advice on dealing in securities and is not a financial advisor. Professional advice should be sought before making any investment decisions.

Contact editor: [email protected]

To read reuters' full disclaimer click here

Thank you for visiting HotCopper

We have detected that you are running ad blocking software.

HotCopper relies on revenue generated from advertisers. Kindly disable your ad blocking software to return to the HotCopper website.

I understand, I have disabled my ad blocker. Let me in!

Need help? Click here for support.