WARSAW/LONDON (Reuters) - Poland's JSW <JSW.WA> is considering a bid for control of Prairie Mining <PDZ.AX> to tighten its grip as the EU's biggest coking coal miner, two sources familiar with the situation said.
Coking coal is on the European Commission's list of critical raw materials of economic importance with the price of Chinese coking coal futures <DJMcv1> tripling since 2015.
State-run JSW and Australia's Prairie, which is developing mines in Poland, have been in cooperation talks for much of this year but JSW wants control, according to the sources.
"JSW is considering a takeover of Prairie," a source familiar with the situation told Reuters on condition of anonymity. Another person, who also could not be identified, also said he expected a takeover bid.
Poland's prime minister and energy ministry have provisionally approved the plan, one source said.
The state-run company's plan comes as the country faces nationwide local elections in October and reflects the ruling Law and Justice (PiS) party's pledge to create jobs. The party also wants strategic assets returned to state ownership.
Prairie Mining has been developing coking coal at the Jan Karski mine in southeast Poland and the Debiensko mine in Silesia, Poland's industrial heartland in the south.
A JSW spokeswoman declined to comment on the takeover plan but said the miner was assessing Prairie's projects and may release more information by mid-September.
Prairie Mining declined to comment.
Highly polluting thermal coal, used to generate power, is increasingly difficult to mine in Europe as banks refuse to fund it. Coking coal, used in steel-making, is considered to have a better future.
"If Poland develops quickly, then we will need more steel and coking coal. In the case of JSW, it is obvious that the company is looking for more deposits," Energy Minister Krzysztof Tchorzewski said this week.
The energy ministry was not available for immediate comment on the JSW takeover plan.
A handful of foreign investors are keen on mining Poland's coking coal.
The sources said they expected the Polish government to reject a project by private British firm Tamar Resources, which wants to mine coking coal at a Silesian mine previously operated by JSW as a thermal coal mine.
Tamar CEO George Rogers told Reuters he will keep fighting to run the project, which he said would provide at least 2,000 jobs.
The Solidarity trade union has asked the government to hold a tender seeking an investor to revive the mine and the union will back whoever wins, said Dominik Kolorz, head of the union's Silesian branch.
"If Tamar wins, we would back Tamar," he said, adding the ministry had yet to reply to the request for a tender.
(Additional reporting by Wojciech Zurawski; editing by Jason Neely)
