29th Apr 2014 12:38
LONDON (Alliance News) - New World Resources PLC Tuesday said that that the Czech Republic government has approved the financial support terms of the agreement regarding the closure of its Paskov Mine in the country, owned by its subsidiary OKD.
Last week, the mining company said its subsidiary OKD had reached an agreement with "certain members" of the Czech government on a proposal to be submitted regarding financial support for the closure of its Paskov Mine in the country.
New World Resources said the main elements of the deal are that OKD extends the operation of the mine until the end of December 2017 and the state will provide CZK600 million to cover the social costs of the closure.
It also said that, as part of the deal, if coking coal prices drop below USD110 per tonne for three consecutive quarters in the period between July 1, 2014 and the end of December 2017, the agreement becomes invalid and both parties will renegotiate the deal.
Under the terms of the deal, OKD also retains the flexibility to continue mining at Paskov after 2017 should it decide to and the agreement also becomes invalid if the net result of the Paskov mine is positive for at least four consecutive quarters.
New World Resources said Tuesday that the Czech government agreed all the terms of financial report, and the official signing of the agreement will take place in the coming weeks.
It said the agreement is further subject to notification and approval by the European Commission.
New World Resources shares were down 1.3% at 39.00 pence per share Tuesday afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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