RPT-E.ON to hook up with Czech miner for power plant

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PRAGUE, July 18 (Reuters) - Germany's E.ON said on Wednesday it will join forces with Czech Coal to build a coal-fired power plant in the Czech Republic.

E.ON spokesman Vladimir Bacha confirmed the decision, but gave no further details. The news Web site iDnes (www.idnes.cz) quoted E.ON chief Wulf Bernotat as saying the plant would cost 2 billion euros ($2.76 billion).

Czech Coal, a closely held energy trader, controls Mostecka Uhelna, the country's second-largest lignite mining firm by output, announced on Monday it was giving up on an intended alliance with power utility CEZ to build the plant.

The move to sideline CEZ and find a foreign partner for a new power source undermines CEZ's own plan to build a 1,300 MW power station, which analysts say would represent about 9 percent of CEZ's existing capacity.

E.ON, the second largest Czech power supplier after CEZ with nearly one quarter of the market, has said it was interested in participating in the plant.

CEZ, which is central Europe's biggest company by market capitalisation, took Czech Coal to court last month to try to ensure long-term coal deliveries.

CEZ says Czech Coal refuses to follow up on a preliminary agreement and sign a final deal on coal supplies until 2055. Czech Coal says CEZ's lawsuit was unfounded and the two firms simply failed to agree on a long-term deal.

E.ON currently buys from CEZ 80 percent of the power it needs for the distribution companies E.ON operates in the Czech Republic.