UPDATE 1-Foreign firms sue Poland over access to mine concessions

Fri Nov 21, 2014 4:18am EST
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(Releads to add second miner taking legal action)

* Two firms tangled with KGHM over access to mining permits

* KGHM is one of Poland's biggest companies

* It denies trying to push aside competition

By Adrian Krajewski and Anna Koper

WARSAW, Nov 21 (Reuters) - Two foreign-owned mining firms have filed legal complaints against Polish government over what they see as the unfair allocation of key permits in the country, in favour of state-controlled miner KGHM.

KGHM, Europe's second-largest copper producer and an industrial champion for Poland, wants to boost resources and reserves. It bought Canadian miner Quadra almost three years ago, hoping to boost production with projects like Sierra Gorda in Chile -- but it has also sought to lift output at home.

Poland's environment ministry, which allocates concessions, denied that it gave preferential treatment to KGHM over Canadian Miedzi Copper or British firm Darley Energy. KGHM, 31.8 percent owned by the state, said it did not limit competition.

Whatever the outcome, the cases filed by the two developers could rattle much-needed foreign investment into Poland's ageing mining industry, at a time of weaker demand for copper and coal in particular - among Poland's top commodities.   Continued...