WARSAW – Australia's Prairie Mining has launched international arbitration proceedings against Poland arguing that Warsaw breached bilateral treaties by blocking Prairie's investment in two coal mines.

Prairie Mining, which has been developing the Jan Karski and Debiensko mines in Poland, said last year that it had notified the Polish government about an investment dispute.

In July the company secured around $12-million for litigation funding.

"The Company remains open to resolving the dispute with the Polish government amicably. However, as of the date of this announcement, the Polish government has declined to participate in discussions related to the dispute," Prairie said in a statement.

It said that it was not able to comment on the potential size of its claims.

It said that they may include the value of its expenditures related to developing the mines, lost profits and damages and the arbitration costs.

Polish media have reported that Prairie could seek as much as 10-billion zlotys ($2.64-billion) in compensation.

The accusations relate to licensing issues that delayed the development of the mines.

For example, Prairie filed a lawsuit against environment ministry over its refusal to extend the company's exclusive rights for Jan Karski.

The mines contain coking coal as well as thermal coal. Thermal coal, used for power, is struggling to attract investment because of concerns about the environment, but coking coal, used in steelmaking, is still viewed as a strategic mineral.

Prairie also noted "international media widely reporting that the political environment and investment climate in Poland has deteriorated since the change in government in 2015," referring to the Law and Justice party's win in a general election five years ago.

Poland's ministry responsible for state assets, mining and energy was not immediately available for comment.