22nd Apr 2014 12:35
LONDON (Alliance News) - New World Resources Tuesday said its subsidiary OKD has 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.
The mining company 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.
The company 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.
New World Resources said OKD 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.
The company said the proposal is expected to be discussed by the Czech government by the end of April and it has to pass through the European Commission in order to be ratified.
New World Resources said last year that it would close the site at the end of 2014.
Earlier in the month, the company's subsidiary OKD signed an extension of the memorandum of understanding on the closure of its Paskov Mine until April 30.
New World Resources shares were up 6.4% to 41.5 pence Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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