Coal explorer Prairie Mining says it may turn to international authorities to settle a legal ruckus it is having with the Polish government over its Debiensko project.

Prairie today responded to media speculation regarding potential international legal proceedings against the government.

“Prairie has formally notified the Polish government that there exists an investment dispute between Prairie and the government,” the company told investors.

Investors seemed to admire the company’s tenacity, pushing shares up over 27 per cent to an intra-day high of 35c.

“The dispute arises out of certain measures taken by Poland in breach of the Energy Charter Treaty, the UK-Poland Bilateral Investment Treaty and the Australia-Poland Bilateral Investment Treaty.”

In December 2016, following the acquisition of the Debiensko coking coal mine, Prairie applied to the Ministry of Environment for an extension to the time stipulated in the mining concession for first production of coal from 2018 to 2025.

But the request was denied by the government.

Prairie Mining (ASX:PDZ) shares over the past year.
Prairie Mining (ASX:PDZ) shares over the past year.

Prairie is now under pressure to resolve the issue before the government limits or confiscates the Debiensko concession from the company.

Prairie said last month that the Ministry of Environment had taken over two years to finalise the concession amendment proceedings, including seven months to issue a second instance decision.

But under Polish administrative law there is a maximum statutory deadline of two months for the Ministry to issue such decisions, the company said.

Prairie has called for “prompt negotiations with the government to amicably resolve the dispute”.

If the matter can’t be resolved, Prairie says it has the right to submit the dispute to international arbitration.

This isn’t the first time the company has been caught up in a drawn-out legal battle with the Polish government.

Prairie announced it was taking the government to court last April because of its dilly dallying in granting environment approval for the company’s Jan Karski mine so it could apply for a mining licence.

Nine months later, in mid-January this year, Prairie revealed that the Supreme Administrative Court had ruled in its favour, ordering the Ministry of Environment to approve the resource estimate for the K-6-7 deposit.