Polish coal miner JSW said it has agreed to cooperate and study the viability of two coking coal projects in Poland under development by Australian Prairie Mining, marking initial steps to potential joint development.
Prairie's Debiensko hard coking coal project, which was owned by bankrupt miner New World Resources, and Jan Karski Mine, the former Lublin Coal Project targeting semi-soft coking coal production, are involved, JSW said.
Prairie said on February 9, in response to media reports, it had met JSW for preliminary discussions.
The move to formalize studies followed a 7.9% reduction in coking coal production by JSW to 10.676 million mt in 2017. JSW has its own coke plants which need supply, as well as external customers for coking coal such as ArcelorMittal.
JSW has entered into a non-disclosure agreement with Prairie to share technical and commercial information on the mines, after Prairie's approached JSW with the idea of potential co-operation, it said.
The process will initially last for six month and was expected to facilitate further discussions regarding potential transaction options that may develop regarding Prairie's Polish projects, JSW said.
JSW said it will conduct an assessment of Debiensko's feasibility and economics, taking JSW's existing infrastructure at the neighboring Knurow-Szczyglowice coal mine into account. It will make a similar study at Jan Karski, including coal quality specification.
Debiensko entails resuming operations at a former mine in the Upper Silesian Coal Basin, near the Czech border, while Jan Karski is in eastern Poland.
The mines, along with coking coal mines owned by JSW, are close to several integrated steel works. ArcelorMittal operates in Dabrowa Gornicza and Krakow in Poland, and nearby are Czech and Slovakian mills located in Ostrava, Trinec and Kosice.
Polish coking coal and coke products are supplied to Austria and Germany, among other markets.
Prairie Mining, based in Perth, Western Australia, is listed on the ASX, and also the London and Warsaw stock exchanges.
