NWR to delay Paskov coal mine closure in Czech Republic

8 April 2014 (Last Updated April 8th, 2014 23:00)

Central European hard coal and coke producer New World Resources (NWR) has expressed its confidence in reaching an agreement with the Czech Republic state by the end of this month, to delay the planned closure of its Paskov hard coal mine.

coal

Central European hard coal and coke producer New World Resources (NWR) has expressed its confidence in reaching an agreement with the Czech Republic state by the end of this month, to delay the planned closure of its Paskov hard coal mine.

Paskov is NWR's only active site in Staric and also the only operational mine in the Ostrava region.

The unprofitable Paskov mine was slated for closure this year, but NWR and the Czech Republic state have been negotiating a deal for the government to fund social programmes for miners who lose their jobs, in exchange for keeping the mine open until the end of 2017.

NWR chairman Gareth Penny recently met with Finance Minister Andrej Babis and Industry Minister Jan Mladek to finalise the deal.

Reuters reported Industry Mladek as saying that the two parties still need to reach an agreement on possible compensation for NWR, if coal prices continue to decline.

"If prices fall, either the compensation would have to rise or the miners' employment period would have to decrease, because it would generate bigger losses." 

"Their position is such that, if prices fall, either the compensation would have to rise or the miners' employment period would have to decrease, because it would generate bigger losses," Mladek said.

New World Resources owns some of the largest hard coal mines in the Czech Republic, and the company reported a net loss of €80.3m during the first quarter of 2013, due to low prices and a weak global demand from steel-making companies.

The company has commenced the process of divesting its coke operations, OKK, as part of its plan to return to profitability.

In the past two years the average contracted price of coking coal has dropped 35%.


Image: NWR plans to close its unprofitable Paskov Coal mine this year. Photo: courtesy of Dan at FreeDigitalPhotos.net.

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