Polish coking coal producer JSW set for $494m mine purchase deal
Polish coking coal miner Jastrzebska Spólka Weglowa (JSW) has signed a preliminary agreement to buy the Knurow-Szczyglowice coal mine from ailing state-owned producer Kompania Weglowa.
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The boards of JSW and Kompania Weglowa signed the deal, worth 1.49 billion zloty ($494 million), on April 10, the latter said in a release published on the company’s website on Friday April 11.
Completing the deal will require approval from Poland’s Office of Competition & Consumer Protection, among other conditions that have to be fulfilled by July 31 this year.
The Knurow-Szczyglowice mine in southern Poland has production capacity for 3.8 million tpy of coal, of which 40% is coking coal. It has 119.7 million tonnes of current coal resources.
Funds from the sale of the mine are seen as a key to continuing operations at Kompania Weglowa, the miner said in a January press release. It has been struggling with profitability amid falling coal prices.
In February, it signed with trade unions a company restructuring agreement, involving job cuts, in a bid to make a total of 1.2 billion zloty ($398 million) in savings by 2020.
Warsaw-listed JSW is a major European coking coal and coke producer, and also mines steam coal. It presented a net positive result of 82.2 million zloty ($27.25 million) and sold 14.4 million tonnes of coal in 2013.
JSW did not respond to requests for comment at the time of publication.