The main power utility PPC has taken extrajudicial action against a family-run enterprise licensed by the utility to operate the Ahlada mine supplying the nearby Meliti lignite-fired power station in northern Greece in an effort to secure improved terms for prospective buyers of the power station. It is included in the utility’s bailout-required disinvestment of lignite assets.
The existing agreement between PPC and the Rozas family enterprise, licensed to operate the mine, does not secure price and quantity stability. Prices vary depending on the yield offered by extracted lignite. Also, PPC believes development at the mine is too reserved. It is anticipated that greater output would lower the price of lignite per ton.
Prospective buyers who took part in PPC’s recently failed first attempt at completing its lignite package sale identified the Ahlada mine’s current supply agreement for Meliti as a disincentive. A team comprising China’s CHN Energy and the Copelouzos group was particularly troubled. The supply agreement will be passed on to Meliti’s prospective owner.
Two other requests forwarded by prospective buyers – staff cuts and the adoption of a profit-and-loss sharing mechanism for the units sold – are in the process of being added to the follow-up sale effort’s new terms.
PPC is currently supplied Ahlada lignite at a price of 23 euros per ton for its Meliti mine but wants the price level reduced by five euros per ton, which would generate annual savings of approximately 12.5 million euros.