December 17, 2014 / 3:13 PM / 3 years ago

Poland's KGHM has talks with Canadian rival over permit dispute

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WARSAW, Dec 17 (Reuters) - Europe's second largest copper producer KGHM has held talks with Canadian-owned rival Miedzi Copper about two disputed Polish concessions which are the subject of a legal battle, KGHM said on Wednesday.

Miedzi Copper filed a case in a Polish court against the government after two copper permits it had been awarded were withdrawn by the government following a challenge from KGHM, which itself wanted to develop the concessions.

"KGHM management met with Miedzi Copper management," KGHM spokesman Dariusz Wyborski said. "We're aiming at a solution that's best for us, Miedzi Copper and the region."

He said further geological studies on the concessions would be carried out "to accurately reflect on the possibilities sketched out at the meeting." He did not elaborate.

Miedzi Copper declined to comment.

KGHM, part state owned and the only miner producing copper in Poland, has previously said it challenged the award of the permits to Miedzi copper because it had spent time and money researching the permits, adjacent to areas it is already mining.

The government said the permits were withdrawn because of shortcomings in the way the bidding process was administered.

The rows over concessions could rattle foreign investors at a time when Poland's resource sector, struggling with low prices, needs investment.

In a separate dispute, British firm Darley Energy is challenging the government's decision to allocate to KGHM a potash mining concession.

Last week, Darley lodged a complaint against Poland with the European Commission.

"Europe needs to know what is going on in its member countries," Philip Jeffcock, whose family founded Darley, told Reuters. "Poland wants to be treated seriously, but Poland needs to treat investors seriously too."

Jeffcock said that Darley was also open for talks and had requested a meeting with KGHM, but to no avail.

Darley says it should have been granted access to the concession by May last year. But it said the process was delayed, allowing KGHM to enter the race later and win.

The government denied any wrongdoing in the award of the concession, saying KGHM's bid was superior. It said it was not biased in KGHM's favour. KGHM has declined to comment on Darley's allegations.

Reporting by Adrian Krajewski; Additional reporting by Anna Koper; editing by Keith Weir

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