Polish coal explorer Prairie Mining is facing difficulties locking in a mining licence for its Jan Karski mine in eastern Poland.

News that the company has now launched legal action against the Polish government sent shares down 24 per cent to 66c on Tuesday morning. The shares were trading at 67.5c just before 11am AEST.

Prairie (ASX:PDZ) is still waiting on environmental approval from the government for the Jan Karski project before it can apply for a mining licence.

The company told investors it also had the “legal right” to apply for a Mining Usufruct Agreement over Jan Karski for an additional 12 months from April 2018.

“Under Polish law, the [Ministry of Environment] is strictly obligated, within three months of Prairie making an application for a Mining Usufruct Agreement, to grant the agreement,” Prairie noted.

PDZ shares over the past six months.
PDZ shares over the past six months.

Prairie applied for the Mining Usufruct Agreement in late December last year but has not yet received notification that it has been granted the agreement.

The Polish civil court has the power to enforce the Mining Usufruct Agreement and, while the matter is before the court, prevent the government from granting the licence to any other party, according to Prairie.

> Bookmark this link for small cap breaking news
> Discuss small cap news in our Facebook group
Follow us on Facebook or Twitter
Subscribe to our daily newsletter