Debiensko mine could deliver low-cost hard coking coal to Europe
Published by Harleigh Hobbs,
A scoping study for Prairie Mining’s fully permitted Debiensko mine has highlighted technical viability and robust economics for it to potentially be a large-scale, low-cost and long-life premium hard coking coal supplier.
Debiensko is a globally significant project with 2.6 million tpy hard coking coal production from a JORC Resource of 301 million t. With this JORC resource, Debiensko has the potential to be a globally significant project.
The scoping study indicated cash costs of approximately US$47 per tonne (steady state average) potentially positions Debiensko as by far amongst the lowest cost suppliers of hard coking coal into Prairie’s key European markets.
Prairie reported in a ASX announcement that the study showed highly favourable market fundamentals as Europe continues to consume 47 million t of hard coking coal annually, 85% of which is imported. It indicated that Debiensko coking coal is expected to enjoy strong demand from steelmakers, with substantial netback pricing advantages given proximity to regional customers.
There is access to well established and already connected regional rail infrastructure with underutilised bulk cargo capacity for low transportation costs within Poland to regional Central European and wider European customers.
According to the company, leveraging off existing infrastructure at the Debiensko mine site potentially results in exceptionally low capital intensity of US$197 per tonne of annual saleable production capacity compared to an industry average of over US$401 per tonne for global hard coking coal mines developed in the last decade.
Prairie’s Polish and international management team with experience in developing, operating and financing world-scale coal projects, will now proceed with formal feasibility and other technical studies.
Ben Stoikovich, Prairie’s CEO, said: “The scoping study results confirm Debiensko’s potential as a Tier 1 premium hard coking coal asset by virtue of the significant potential production scale and resource size, exceptionally low estimated cash costs and low capital intensity of the mine. The study focused on the near-term development of highly profitable coal seams at low capital and operating costs. The mine has the potential to deliver 2.6 million tpy of premium quality hard coking coal at US$47 per tonne placing it right near the bottom of the global cost curve. Blessed with the presence of existing rail, road, power, water and other mine infrastructure the project has one of the potential lowest capital intensities for a new hard coking coal mine and is fully permitted for development. Preliminary analysis confirms that Debiensko hosts premium hard coking coals of comparable quality to internationally traded benchmark hard coking coals and the potential to obtain significant pricing premiums against imported seaborne coals owing to transport advantages (netbacks) of some US$15 per tonne. Our initial marketing studies indicate that Debiensko hard coking coal will likely be in strong demand in the Central European region, given the highly favourable regional supply / demand dynamics.”
He concluded: “It is time to re-affirm Poland’s status as Europe’s premier exporter of hard coking coal, which is so vital for European industry. By introducing international best practise into the Debiensko project, Prairie’s highly experienced management team is well positioned to restart this Tier 1 asset, which will have huge social and economic benefits for regional development.”
Read the article online at: https://www.worldcoal.com/exploration-and-development/16032017/debiensko-mine-could-deliver-low-cost-hard-coking-coal-to-europe/
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