OKD, a wholly-owned subsidiary of coal producer New World Resources (NWR), has signed a deal with certain members of Czech government to continue operations at its loss-making Paskov hard coking coal mine in the Ostrava region.
The announcement has come following Czech government agreed to provide CZK600m ($30.16m) to cover the social costs associated with the planned closure.
NWR said that the parties have agreed to renegotiate the deal if coking coal prices drop below $110 per tonne for three consecutive quarters between 1 July 2014 and 1 December 2017, adding that the agreement becomes invalid if the net result of the Paskov mine is positive for at least four consecutive quarters.
Expected to be discussed by the Czech government by the end of this month, the proposal is also subject to approval by the European Commission.
The hard coal-mining firm had planned to close the Paskov mine by 2014-end as it suffered losses due to a sharp decline in global coal prices, and is currently in negotiations with bondholders over a capital restructuring plan.