Czech Republic Mining Report 2016

Czech Republic Mining Report 2016

BMI View: The Czech mining sector is set to consolidate further over the next few years due to the gradualwinding down of the country's hard coal mining operations in the east of the country. The country's onlinefunctioning uranium mine is also scheduled for closure in 2017. We note potential expansion in the thermalcoal sector, as the commodity remains an important source of domestic energy generation; however,increasing pressure on the government to comply with EU emissions regulations leaves us to questionwhether this is a viable long-term strategy.

Latest Updates And Structural Trends

Our outlook for Czech coal mining output is increasingly bearish, following growing concernssurrounding the country's hard coal mining sector. We forecast overall coal production to fall by 2.3% in2016 to 53.4mn tonnes (mnt) and to continue declining on an annual basis through to 2020 when it willtotal 52.3mnt.

The outlook for the thermal coal sector looks more positive. In October 2015, the government approved aplan to develop the mining of lignite, which will reportedly allow miners to expand mining of thecommodity beyond the previous environmental limits. The northwest of the Czech Republic is estimatedto contain up to 120mnt of lignite deposits.

As such, Czech mining looks set to find itself solely reliant on thermal coal within the next decade. Thecountry's sole uranium mine, Rožná, is due to close in mid-2017, though there have been reports of apotential uranium mining being launched at Brzkov from 2020.


BMI Industry View
Table: Czech Republic Mining Industry Value Forecast (2015-2020)
SWOT
Industry Forecast
Coal: Mine Closures In Store Amid Deteriorating Operating Environment
Table: Coal Production Forecast (Czech Republic 2013-2020)
Industry Risk Reward Ratings
Czech Republic Risk Reward Index
Rewards
Industry Rewards
Country Rewards
Risks
Industry Risks
Country Risks
Table: Czech Republic - Mine Production & Growth (2013-2020)
Europe: Majority To Be Low Risk-Reward
Table: Europe - Mining Risk/Reward Index
Regulatory Development
Overview
Environmental Issues Increasingly At The Forefront
Tax Regime
Corruption Concerns Increasing
Table: Europe - Mining Regulatory Outlook
Commodities Forecast
Commodities Outlook
Table: BMI Commodities Price Forecasts
Competitive Landscape
Company Profile
Ostravsko-Karvinské doly
Regional Overview
Methodology
Industry Forecast Methodology
Sources
Risk/Reward Index Methodology
Table: Weighting Of Indicators

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