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Czech Government may buy divested coal assets from NWR

World Coal,

Czech coal miner, New World Resources (NWR), has suggested it will divest Czech and Polish coal mining units, OKD and Karbonia, unless the company receives significant support from investors.

Following this announcement, the Czech Government has signaled that it may consider purchasing OKD, the NWR subsidiary, as it takes measures to safeguard around 14 000 jobs.

Industry and Trade Minister of the Czech Republic, Jan Mladek, said that the government would prefer OKD to be acquired by a strategic investor engaged in coal mining. However, the government remains prepared to step in, if necessary.

OKD currently operates four coal mines in the Czech Republic, including the Karviná mine, the CSM mine, the Darkov mine, and the Paskov mine.

In 2013, OKD produced 8.8 million t of coal and accounted for majority of NWR's € 850 million revenues. For Q1 2014, NWR reported a loss of € 26.9 million, compared with € 110.2 million a year ago.

The company has an outstanding debt of € 825 million, as it has been hit by dropping coal prices globally.

Edited from various sources by Sam Dodson

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