(Alliance News) - Prairie Mining Ltd on Wednesday said it has filed a claim with a treaty tribunal for GBP806 million in compensation from the government of Poland for "lost profits and damages" at its Jan Karski and Debiensko coal mines.
The Perth, Australia-based mining company began formal proceedings against Poland in September last year under the Energy Charter Treaty and Australia-Poland Bilateral Investment Treaty.
Prairie Mining claims that, by blocking development of the mines in southern Poland, the Warsaw "breached its obligations" under the two treaties.
The company claims that it was deprived of the total value of its Polish investments. Prairie Mining said the figure of GBP806 million represents "lost profits and damages" from these mines plus interest. Litigation expenses will be covered by a USD12.3 million litigation funding agreement that Prairie Mining has put in place. Litigation funding firms support legal claims in return for a portion of any award.
Prairie Mining noted a pattern of international arbitration claims in the energy and mining sectors brought since the 2015 change of government in Poland. The company cites claims worth from USD120 million to more than USD1.3 billion, involving companies such as gas company Bluegas NRG Holding, precious metals miner Lumina Copper and wind farm operator InvEnergy.
Prairie Mining's recent interim results showed that in the second half of 2020 its loss narrowed to USD242,094 from USD2.3 million a year prior. In the same period, revenue was reduced year-on-year to USD166,442 from USD234,563. In April the company noted that Covid-19 restrictions had limited its mining activity in Poland.
Prairie Mining shares were trading up 53% at 19.93 pence each in London on Wednesday morning. Prairie also is listed in Warsaw, where it was up 35% to PLN1.00, about 19.30p.
By Scarlett Butler; scarlettbutler@alliancenews.com
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