Bogdanka said in a statement that the 19-year contract was for Ostroleka's planned 1,000 MW block C unit. The company said supplies are expected to start in 2016.
Bogdanka said it may terminate the contract if financing and a design, order and construction contract for the new unit have not been secured by the end of June 2012.
Last month, Ostroleka's owner, Energa, said it had applied for a construction permit to build the unit, which will cost an estimated Zloty 6 billion. Previously, Energa had said it was scheduled to be commissioned in 2017.
It will burn around 2,400 mt/year of hard coal and 200,000 mt/year of biomass and will have an efficiency of more than 45%. It will produce around 7,500 GWh of electricity annually.
Bogdanka said the price of coal under the contract would be determined quarterly on the basis of world market coal prices.
Bogdanka, located near Lublin, in southeast Poland, sells its coal for between Zloty 300/mt ($106/mt) net to Zloty 470/mt ($167/mt) net at present. The company produced 5.24 million mt in 2009. It mined 2.8 million mt in the first half of this year.
Elektrownia Ostroleka, consists of Ostroleka B, which was commissioned in 1972, and its three blocks have combined installed capacity of 647 MW electrical capacity. Ostroleka A, commissioned in 1956, has installed capacity of 93 MW electrical and 456 MW thermal.
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