Run down, dilapidated administrative buildings, abandoned shafts and pithead buildings are to regain their former glory thanks to the decision by New World Resources to press ahead with the development of the new Dębieńsko mine in Czerwionka-Leszczyny, not far from the city of Rybnik in Southern Poland.
On June 20th, NWR’s Board announced its final approval of the Dębieńsko project. This announcement, which was anticipated by the market, was made after reviewing the results of the Detailed Feasibility Study and an in-depth analysis of the project. NWR is planning to break ground at Dębieńsko before the end of this year. According to the Detailed Feasibility Study, the hard coal reserves in the area of Dębieńsko are estimated at 190 million tonnes. NWR estimates that the average annual production will amount to two million tonnes, with the first tonne of coal hauled to the surface in six years from now, in 2017, and full production following shortly thereafter. Dębieńsko will mine both thermal and coking coal.
NWR is planning to invest EUR 411 million euro in the development of the new mine. This sum primarily consists of detailed engineering works, the purchase of land and necessary infrastructure, thorough reconstruction of the existing infrastructure and the start of construction of the first inclined slope. In addition, capital expenditure costs linked with the modernisation and maintenance of the existing infrastructure are estimated by NWR at EUR 133 million.
“The decision of the NWR Board is a breakthrough because it mentions specific assets that will be used for developing the investment. After all it is obvious that maintaining shafts and the acquired infrastructure, ventilation system, etc. will be costly. As I have mentioned many times, we are basically ready to start developing the mine today, and the decision of our Board confirms our readiness for the project,” said Jerzy (George?) Klinowski, vice-chairman and executive director of NWR Karbonia, which will manage the project’s development.
Mike Salamon, NWR Executive Chairman, said: “After completing a rigorous stage of working on the project’s development we have reached the point where we can press the ‘start’ button. This reflects our trust in the quality of the resources and the solid strength of the coking coal market. It is an extremely important moment in the history of NWR’s growth and development, it shows our commitment to invest in the growth of our activity in Poland,” he said. (Mike will need to check this. – shall I write to him?)
NWR has a 50-year license for extracting coal in the area of Dębieńsko, granted in 2008. By the terms of this license the Company may immediately begin extraction, but it is waiting for significant documents from the Ministries of Treasury and Economy. They will help hasten the procedures linked with the purchase of land for the development of the new mine.
“This is because we cannot begin the investment without acquiring lands from the owner of the former Dębieńsko mine, Kompania Węglowa S.A. and the Spółka Restrukturyzacji Kopalń S.A. What is most important for us at the moment is to acquire land from these two state companies. If we are able to obtain permits from both ministries allowing the purchase of lands belonging to the Kompania Węglowa, we will be able to start digging the first tunnel in late autumn this year. We will have to wait a bit longer for progress in the negotiations with Spółka Restrukturyzacji Kopalń,” said Klinowski.
NWR has satisfied all the formal requirements for commencing extraction. In 2010, the Company submitted a proposal for an amendment to the license from 2008, which will allow extraction from additional deposits. The relevant authorities are expected to implement the amendment to the licence in the middle of 2012, after completing works on the environmental impact report.
Opening such a mine as Dębieńsko it is a serious investment. The Company intends to purchase all the mining equipment necessary to launch full production, and before starting production it also intends to spend appropriate funds for the modernisation of existing mining shafts – the remains of the closed mine – and for the modernisation and maintenance of the electricity infrastructure, the water pumping and ventilation systems. It is extremely important that NWR Karbonia cares strongly about preserving the beautiful, old architecture – the remains of the former mine, which currently lay in ruins. In collaboration with the Provincial Monument Preservation Office in Katowice, the NWR intends to renovate the building of the old executive offices from the beginning of the 20th Century, and to reconstruct the administrative building, the pithead building and baths.
NWR is planning to fund the Dębieńsko project from its own resources and external financing. The realisation of this investment would not be possible without the involvement of many global and regional experts specialising in mining infrastructure, coal processing, construction of inclined slopes and shafts, as well as mine and railway facility planning. Their work went into the research for the Detailed Feasibility Study, which formed the basis of the Board’s decision to give Debiensko the ‘go ahead’.
Tomasz Rozek,
tomasz.rozek@cook-comm.com