New World Resources to Reconsider Paskov Plan Pending Cost Cuts

New World Resources, the largest Czech producer of steelmaking coal, will consider abandoning a plan to shut its money-losing Paskov mine in 2017 if cost cuts improve prospects of turning a profit.

“We’re not guaranteed to go past 2017, but we are a lot closer to that possibility now,” Chief Financial Officer Marek Jelinek said Tuesday in Ostrava, Czech Republic. “It’s not a certainty that the mine will close.”

New World Resources, contending with dwindling commodity prices, has reduced operational and administrative costs to stem losses at Paskov that reached $80 million in 2012. The Amsterdam-registered company previously said it would close the mine, which employs about 3,000 people, by the end of 2017 because it was losing too much money.

If the site in eastern Czech Republic remains open, New World Resources will aim to keep production costs at 95 euros ($101) to 100 euros a metric ton, according to Jelinek. There are still about 18 million tons of high-quality coking coal in the mine, enough to keep it going for 18 years, he said.

The plan to close Paskov has drawn fire from labor unions and the government. The state pledged to provide 600 million koruna ($24 million) to cover social costs following a shutdown.

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