The Multi-project coal development company, Prairie Mining Limited (ASX: PDZ) today (18 January 2019) provided concession updates on its Debiensko and Jan Karski mines which are located in Poland.
While providing the update on its Jan Karski Mine, the company informed about the positive ruling in Supreme Administrative Court in which the Court has fully rejected the Lubelski W?giel BOGDANKA S.A.’s (Bogdanka) administrative complaints against Poland’s Ministry of Environment (MoE).
Bogdanka’s complaint was regarding the refusal of Bogdanka’s 2013 application for a mining concession over the K-6-7 deposit at the Jan Karski Mine. The court decision is final, and it cannot be appealed. The Court has upheld the 2016 Regional Administrative Court decision that confirms the original 2015 decision, which denied Bogdanka’s mining concession application. The Court has concluded that granting a mining concession to Bogdanka would be a serious violation of the provisions of Poland’s Geological and Mining Law (2011) and it would be contrary to the rule of law as embodied in the Polish constitution.
In a second ruling, the Court has upheld the 2016 Regional Administrative Court decision that obliged the Ministry of Environment to approve Prairie Mining Limited’s submitted Addendum No.3 for the K-6-7 deposit. Addendum No.3 contains the 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. The significance of this ruling is that Bogdanka’s 2018 application for a mining concession over K-6-7 is now entirely inadmissible under Polish law and it requires the MoE to reject Bogdanka’s mining concession application.
The company has also provided an update on its concession amendment application which was sent to Poland's Ministry of Environment in December 2016, to extend the time specified in the mining concession for the first production of coal from 2018 to 2025. As per the announcement, the company has now received a final “second instance” decision from the MoE that has denied the Company’s amendment application. In the announcement, the company has stated its intention to strongly defend its position, and it is going to take necessary actions to pursue its legal rights regarding the Debiensko concession. As per the company’s Preliminary legal advice, the decision of MoE is fundamentally flawed, and it is not complying with Polish, EU and international law. According to the company, MOE’s decision is proof of the discriminatory treatment which the company is facing as a foreign investor in Poland. In its announcement, the company has assured that it has always conducted its business in Poland as per the Polish law. As Australia and Poland are signatories to the 1991 Promotion and Protection of Investment Agreement, this gives Prairie a right to make future claims against the Polish state.
In the last six months, the share price of the company decreased by 10.11 percent as on 16 January 2019. PDZ’s shares traded at $0.365 (-8.75% intraday) with a market capitalization of circa $84.91 million as on 18 January 2019 (AEST 4:00 PM).
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