Prairie Mining (ASX:PDZ, PDZ.L) seems to be enjoying some renewed attention as the coal market has been bouncing back since the climate agreement in Paris, late last year. On a year-to-date basis, the coal price has increased by approximately 30%, and is expected to continue to gain strength.
Not only is the coal price gaining momentum, the political support for the project is also growing and the Warsaw government is now planning to support the development of modern coal-fired plants. That’s an interesting step and it indicates the government continues to see the need for coal-based power as coal is the main source for approximately 80% of the country’s energy production.
It looks like the Polish government isn’t just talking the talk, but is also prepared to walk the walk as it will try to unlock the Lublin coal basin by developing infrastructure in the region which will allow quicker access to highways and export ports (for the coal that won’t be sold on the domestic market). The further Prairie is advancing the Jan Karski mine, the more interesting it will be for neighbor Bogdanka (which already has three shafts closeby) to acquire the company.
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The author has a long position in Prairie Mining. Please read the disclaimer
