Prairie Mining takes Poland to arbitration court over coal mines

The Jan Karski coal mine in southeastern Poland. (Screenshot from Mining Prairie Ltd. YouTube channel)

Australia’s Prairie Mining has launched international arbitration proceedings against Poland arguing that Warsaw breached bilateral treaties by blocking Prairie’s investment in two coal mines.

Prairie Mining, which has been developing the Jan Karski and Debiensko mines in Poland, said last year that it had notified the Polish government about an investment dispute.

In July the company secured around $12 million for litigation funding.

Polish media have reported that Prairie could seek as much as $2.64 billion in compensation

“The Company remains open to resolving the dispute with the Polish Government amicably. However, as of the date of this announcement, the Polish Government has declined to participate in discussions related to the dispute,” Prairie said in a statement.

It said that it was not able to comment on the potential size of its claims.

It said that they may include the value of its expenditures related to developing the mines, lost profits and damages and the arbitration costs.

Polish media have reported that Prairie could seek as much as 10 billion zlotys ($2.64 billion) in compensation.

The accusations relate to licensing issues that delayed the development of the mines.

“There were so many declarations, announcements and different types of visions, and it ended as we see,” Deputy Assets Minister Artur Sobon was quoted by state news agency PAP as saying regarding Prairie’s arbitration move.

“This is a really sad story, which in a sense shows that when it comes to investment in the energy or mining sectors, we need to consider our state assets in the first place and not private investors,” Sobon said.

Prairie’s mining projects contain coking coal as well as thermal coal. Thermal coal, used for power, is struggling to attract investment because of concerns about the environment, but coking coal, used in steelmaking, is still viewed as a strategic mineral.

Prairie also noted “international media widely reporting that the political environment and investment climate in Poland has deteriorated since the change in Government in 2015,” referring to the Law and Justice party’s win in a general election five years ago.

($1 = 3.7832 zlotys)

(By Agnieszka Barteczko; Editing by Jason Neely)

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