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Past Projects - Bogdanka Coal Mine

  • Year: 2001
  • Country: Poland
  • Client: Bogdanka Coal Mine
  • Client type: Mining Company
  • Commodity: Coal
  • Work type: Due Diligence

Description

CMA performed a detailed due diligence evaluation of one of the largest and most modern mines in Poland, Bogdanka Mine, on behalf of a major international investment bank.

Bogdanka operates four shafts (depths 960 – 1004 m), one of which is for skip-winding and draws some 6.1 Mta of run-of-mine production. The mine operates three longwall faces and operations are concentrated on two seams.Transfer of men and materials is by a combination of locomotive and monorail systems. The run-of-mine production is processed in a coal preparation plant using dry-screening, dense-medium bath, jig and hydrocyclone technologies.

A vend of 70% is achieved and of the annual saleable product of 4.3 Mt (2000), some 95% is destined for the power generation market in Poland and, to a lesser extent, for export to Ukraine. The mine had 2,874 employees. As part of the privatisation strategy, the Bogdanka company had developed a business plan that aimed to achieve a major increase in run-of-mine production from 6.1 Mta to 10 Mta, requiring major investment in a fourth longwall set, a doubling of winding capacity with a second skip-winding system and an increase in coal preparation plant capacity. Linked to this were plans for recommissioning of two currently flooded shafts. The expansion programme was estimated to require investment of US$ 120 million.

CMA was instructed to review current operations and identify where improvements could be achieved in terms of optimal level of production, the productivity of operations and costs of production. The objectives and robustness of the business plan for expanded capacity were reviewed. Also commercial risks were reviewed in terms of subsidence, social and health liabilities, health and safety performance and reduction of the workforce. CMA concluded, on available information, that this could be a robust and profitable coal-mining operation that could be considered an attractive target for investment.

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