PPC ups pressure on Ahlada mine operator for better lignite supply terms

The main power utility PPC is increasing its pressure on the operator of northern Greece’s Ahlada lignite mine, feeding the utility’s nearby Meliti power facility, for improved supply terms.

The existing contract, which does not secure price and quantity stability, was seen as a drawback by participants of PPC’s failed sale of lignite units, relaunched today. The Meliti unit is included in the bailout-required sale’s package.

PPC will pursue measures, including loss of earnings charges, against the Rozas family, operating the Ahlada mine, if the existing agreement’s supply terms are not improved, Manolis Panagiotakis, the power utility’s boss, has warned.

Late in 2018, the Greek State extended state-controlled PPC’s agreement with the Ahlada mine’s operator until 2023 with an option for a further five-year extension.

However, Panagiotakis has condemned the operator for under-producing and not fully utilizing the Ahlada mine’s potential, which, he supports, is prompting price instability.

The mine’s operator has supplied PPC’s Meliti facility at price levels ranging between 19 and 23 euros per ton, but these can be reduced to 18 euros per ton, leading to annual savings of 12.5 million euros, the PPC chief noted.

Panagiotakis claims flawed mining practices are being applied at Ahlada as the operator is avoiding expropriation costs concerning three settlements in the region. As a result, potential for better-quality lignite is not being realized, the PPC boss said. Expropriation costs are estimated at between 25 and 30 million euros.

“The operator can choose between the roads of understanding and conflict. Opting for the latter will lead to defeat,” Panagiotakis warned, adding successful negotiations would offer the operator an opportunity to sell considerably greater lignite amounts to Meliti’s prospective new owner.