JOHANNESBURG (miningweekly.com) – The outlook for increased coking coal demand from Europe’s steel producers, coupled with reducing European supply is creating a “perfect storm” for ASX-listed Prairie to become the go-to supplier of the critical raw material, its CEO Ben Stoikovich said on Wednesday.

In a statement to shareholders, he noted that Europe’s steel producers, which supply the vast automobile industry, were now noting the potential increase in demand for steel owing to the move towards vehicle electrification over the coming decades. “We are well positioned to supply the required coking coal to produce the steel from the heart of Europe’s steel-making industry,” he highlighted.

Coking coal continues to enjoy a strong market and spot price environment with hard coking coal prices above $200/t free-on-board Australia.

The European Commission has also confirmed coking coal’s status as a critical raw material in its 2017 list, which features 27 raw materials and updates the 2014 list.

The primary purpose of the list is to identify the raw materials with a high supply-risk and a high economic importance to which reliable and unhindered access is a concern for European industry and value chains.

Following an objective methodology, the list provides a factual tool for trade, innovation and industrial policy measures to strengthen the competitiveness of European industry in line with the renewed industrial strategy for Europe.

The list identifies investment needs which can help alleviate Europe's reliance on imports of raw materials; guides support to innovation on raw materials supply under the EU’s Horizon 2020 research and innovation programme and draws attention to the importance of critical raw materials for the transition to a low-carbon, resource-efficient and more circular economy.

“Importantly for both of Prairie’s projects, it is expected that the list will incentivise the European production of critical raw materials through facilitating the launching of new mining activities,” the company said.

Further, with the Polish government strongly supporting the development of new, modernised coal mines to meet future demand, the company would also see further growth.

A key independent adviser to the Polish government, the Polish Academy of Sciences, recently published a report confirming Prairie’s Jan Karski and Debiensko mines as obvious sources of future coking coal supply for the steel industry.

“Both domestic and European demand for coking coal is also expected to increase. However, the supply of this raw material is low – 85% of coking coal used in the EU in 2016 was imported.

“Therefore, Polish authorities are interested in promoting both the material and domestic steel industry, in order to secure a bigger share of European market to Poland – especially in Central Europe. It is necessary to open new seams at existing mines, or building new mines, to guarantee the energy security of the country and to ensure sufficient supply of material for the steel industry,” the report suggested.