Czech Republic Mining Report 2009

In 2008 uranium mining was attracting more attention and investment for expansion. With oil resources diminishing and coal contributing to environmental concerns, there is growing interest in nuclear power.

Uranium prices have been rising because of this and also because developing countries are exporting less raw materials in favour of using them domestically. As of May 2008 440 nuclear reactors existed in the world with a further 30 being built over the next 10 years in China alone. In the Czech Republic this growing interest in expansion has split opinion between the Ministry of Environment and the Ministry of Industry and Trade over environmental concerns. At the Diamo-owned mine in Stráž pod Ralskem there are approximately 115,000 tonnes of resources out of reach since the mine closed since 1996.These deposits are expected to remain untouchable as long as there is opposition from environmentally-focused government parties.

Meanwhile, in a bid to expand the extraction of indigenous energy resources, in April 2009 Euracoal released a report stating that the Ministry for Trade and Industry had submitted a proposal for a new national energy policy which means only partially keeping the geographical mining limits for lignite as outlined in the Government Resolution of 1991. Because of this, mining at the Bilina site, owned by Severoceske doly Chomutov, is now set to continue until 2037.

The Government Resolution of 1991 outlined geographical limits restricting mining areas for ecological reasons. The mining companies were state-owned when the resolution was passed and since privatisation many companies question the relevance of the limits in the current mining industry. These limits can be highly restrictive and impede the extraction of valuable deposits like the 750 tonnes out of bounds in the CSA mining district. There has been occasion where the limits have been lifted and in 2008 the Bilina mine owned by Severoceske doly Chomutov was granted an extension to its limits allowing extraction to continue until 2037. It is uncertain whether limits will be extended in other locations as the original limits were to protect inhabited area and the land surrounding the Bilina mine is uninhabited.

Expansion was also seen in Poland, when in August 2008 an agreement between the Czech Republic and Poland was signed allowing open exploration of deposits along the Czech – Polish border for coal companies. Coal company OKD will gain even more access through this agreement to deposits across the border. It complements the agreement already in place between owner of OKD New World Resources (NWR) and Jastrzebska Spolka Weglowa to explore deposits in this region.

The report forecasts that the Czech mining industry will contract in 2009 in real terms due to collapsing metals prices and a fall in global demand. Although growth will return in 2010 it will stay marginal for the rest of the forecast period. BMI has factored in an evident fall in output of all major commodities, including coal, and gold. The one bright area we see is uranium, as more countries invest in nuclear power. The industry value is likely to be around US$2.18bn in 2013.