Prairie Mining (ASX:PDZ) has announced it has started to work on a pre-feasibility study to determine the viability of the company’s Lublin coal project in Poland. The pre-feasibility study will be supported by additional drilling to increase the confidence in the currently known resources of 1.6 billion tonnes of premium thermal and semi-soft coking coal.
As the scoping study on the Lublin project indicated this project could have a very low cost per tonne, we are looking forward to see the findings of the PFS. Whilst we don’t expect serious difficulties on the operational side, we think the geopolitical situation in the European Union will be Prairie’s biggest enemy. As the EU is trying to push ‘clean energy’, the question is how hard it will push its members to abandon coal-fired power plants. If that would be the case, Prairie Mining would either have to ship its coal to the east and southeast of Europe or ship it overseas which would obviously reduce the economics of the project.
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Disclosure: The author holds no position in Prairie Mining at this moment. Please see our disclaimer for current positions.
