WARSAW/LONDON (Reuters) - A British private equity firm has written to the Polish prime minister complaining about the energy minister’s refusal to back a project to open a coking coal mine, a move it said would create 2,000 jobs.
Poland has said it welcomes foreign investment and is keen to create jobs, especially in mining. But its ruling Law and Justice (PiS) party, with an eye on local elections in October, is also working to return strategic assets to state ownership.
Tamar Resources, one of a handful of international firms trying to get a foothold in Poland’s coking coal, wants to reopen the state-owned Krupinski mine in Silesia as a coking coal mine.
Coking coal, used in steel-making, is on the European Commission’s list of critical raw materials of economic importance. The price of benchmark Chinese coking coal futures DJMcv1 has risen four-fold from its 2015 lows.
The Krupinski mine was previously operated by Poland’s JSW (JSW.WA) as a thermal coal mine, but was transferred to state mining restructuring firm SRK for closure in 2017 following financial losses.
SRK has announced a tender to seal the shafts, which would mean the coking coal at the site could not be exploited.
“This would be a scandal,” Tamar’s chief executive George Rogers said in a covering note to the prime minister’s office, with a copy of his letter to the energy minister.
“This is a great opportunity for Poland,” Rogers added in the documents seen by Reuters. “It cannot be wasted, simply because the (energy) minister does not want to admit that perhaps he should not have closed the mine.”
The energy ministry, which is in charge of the mining industry, declined to comment on Monday. The prime minister’s office was not available for comment.
The Energy Minister Krzysztof Tchorzewski was quoted as saying in July there was no reason for Poland to sell Krupinski to an investor.
Tchorzewski and Poland’s Prime Minister Mateusz Morawiecki have disagreed before. In June, Morawiecki seized control of state-run oil refiners PKN Orlen (PKN.WA) and Lotos (LTSP.WA) from the energy minister, a step analysts attributed to differences between the two politicians.
While foreign investors mostly refuse to fund energy coal, the most polluting form of fossil fuel, coking coal, which has yielded strong profit margins, is more tempting.
Rogers said British mining private equity group Greenstone Resources has agreed to invest $90 million of the Krupinski project’s estimated funding requirement of $180 million. Tamar still needs to find the other $90 million.
Reporting by Agnieszka Barteczko and Barbara Lewis; Editing by Jan Harvey