Australia-based Prairie Mining is seeking £806 million (€934 million, 4.2 billion zloty) compensation from Poland, which it says blocked the development of two coal mines by the firm.
In an announcement today, Prairie said that it had filed the claim under the Australia-Poland Bilateral Investment Treaty. It accuses Poland of violating both that treaty and the Energy Charter Treaty.
Following today’s news, Prairie’s London-listed shares jumped by 53% and its Warsaw ones rose 35%, reports Alliance News.
The firm claims Poland prevented development of its Jan Karski and Dębieńsko mines. That “deprived Prairie of the entire value of its investments” in the country, it says, and the £806 million figure represents the value of lost profits and damages as well as interest accrued on them.
“The claim is proceeding at pace, with the company now having submitted its Statement of Claim in the BIT arbitration, which included a valuation of damages prepared by external quantum experts,” said Prairie’s CEO, Ben Stoikovich.
The firm began legal action against Poland’s environment ministry in 2018, after it was not granted the right to operate the Jan Karski mine, reports TVN24. It notified the government of an investment dispute in February 2019, but says Warsaw has declined to participate in discussions. It then formally commenced its claim in September 2020.
In its statement, Prairie claims that its “investment dispute with the Republic of Poland is not unique” and that “a significant number” of other arbitration claims have been made against the country after “the political environment and investment climate deteriorated since the change in government in 2015”.
Prairie Mining cited other disputes over sums of up to $1.3 billion brought by companies including Bluegas NRG Holding, Lumina Copper and InvEnergy.
In response to today’s announcement, Poland’s climate ministry released a statement saying that, in the case of the Dębieńsko mine, Prairie had sought to change the original terms of its concession to delay the commencement of operations. That request had been refused.
With regard to the Jan Karski mine, “as a result of administrative proceedings, the concession…became impossible to be economically justified”, said the ministry’s statement, quoted by TVN24. The ministry told the Polish Press Agency (PAP) that it now has five months to decide its position and respond to Prairie.
Last year, after Prairie commenced its claim, Poland’s deputy minister for state assets, Artur Soboń, told PAP that “this is a really sad story, which in a sense shows that, when it comes to investment in the energy or mining sectors, we need to consider our state assets in the first place and not private investors”.
According to TVN24, state-owned firm Jastrzębska Spółka Węglowa (JSW) has expressed an interest in taking over the two mines.
Main image credit: MEDIA WNET/Flickr (under CC BY-SA 2.0)
Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.
