Body of the Report:

The Management Board of Jastrzębska Spółka Węglowa S.A. (“Company”, “JSW”) hereby reports that on 12 February 2020 the Company’s Supervisory Board approved the Strategy for JSW and the Subsidiaries of the JSW Group for 2020-2030 (“Strategy”), which is an update of the currently pursued Strategy of the JSW Group, about which the Company reported in Current Report No. 38/2017.

The Strategy for 2020-2030 set new directions and undertakings, which support the JSW Group’s efforts to increase the shareholder value of the company and the entire Group. Strategic objectives have been set, which are parameterized in accordance with the current and forecast market standing of the company.

According to the accepted Strategy, the mission and the vission of the JSW Group are as follows:

Mission – Strengthening our position as the leading producer and supplier of coking coal and coke in Europe in a manner that ensures growth in the Company's value taking into account Stakeholder expectations.

Vision –  Supplier of the strategic chemical raw material indispensable in the production of steel, which is the foundation for sustainable development and transformation towards the low-emission economy.

JSW Group’s strategic goals for the years 2020-2030 are as follows:

• Achieve the average EBITDA margin of at least 25% in the 2020-2030 period.
• Develop the coking coal resource base through development investments enabling the Group to open up new deposits and new mining levels.
• Increase the percentage of coking coal with stable and desirable quality parameters to above 85% from 2021.  
• Safe JSW – further increase our high safety standards.
• Efficient JSW:

        - Work intensity ratio at the level of at least 4.5 running meters/thous. ton per year.

        - Optimize the structure and level of costs by applying innovative solutions.

        - Ensure efficient use of hydrocarbons and strive to achieve energy self-sufficiency.

The supporting objectives will include:

• Learning organization – knowledge management and continuous improvement.
• Curtailing our impact on the environment.
• Stable employer developing employee competence.
• Flexible Organization 4.0 – growth through innovation.

The key development plans will be based, among others, on:

• Optimization efforts in the mining and coking area and activities improving integration between the two operating areas.
• Ensuring energy self-sufficiency of JSW through the development of production capacities based on the Group’s own base of raw materials (methane, coke oven gas)
• Implementation of the Quality program – modeling production and deposit schedules, ongoing monitoring and supervision over the quality of JSW Group’s product, introduction of innovative exploration techniques.
• Solutions mitigating our impact on the natural environment will be implemented in all the activities pursued by the JSW Group. The strategy sets out the main directions of activities in the environmental protection area, including climate impact, carbon footprint and other emissions.
• Implementation of innovative solutions.

Regarding the operational assumptions:

• In the 2020-2030 period coal production is planned to increase from about 14.8 million tons in 2019 to roughly 18 million tons in 2030. The strategy assumes that the output will be ultimately increased through investments in the development of new production levels and launching production in the Bzie Dębina area. The structure of the planned production level assumes an increase in the percentage of coking coal from 71% in 2019 to over 85% from 2021, while steam coal production levels are to decrease from 29% in 2019 to 12% in 2030.
• The average annual roadway excavation works in JSW in the 2020-2030 period should amount to over 80 thousand running meters.
• During the term of the Strategy, JSW assumes an increase in efficiency (productivity) per employee, from roughly 700 tons to about 850 tons of coal per person in 2030, assuming the average annual headcount of about 21.4 thousand FTEs in 2020-2030.

At the same time, the Strategy assumes that average headcount in the JSW Group will increase from the current 30 thousand FTEs to approximately 31 thousand FTSs by 2030.

• Sustainable volume of coke production and sales at a stable level of about 3.5 million tons.
• The strategy for 2020-2030 envisages the JSW Group to incur capital expenditures in the total amount of about PLN 24.5 billion. Capital expenditures in the coal segment will represent approx. 84% of the JSW Group’s total capital expenditures.

The major objectives of the Company’s financing strategy include:

• Ensuring a stable financing structure, by achieving and maintaining at least 50% of the share in equity in the structure of equity and liabilities, and covering the value of non-current assets with fixed capitals.
• Taking actions to ensure the amount of financing which allows for maintaining continuity of operating and investing activity processes at the assumed levels.

Legal basis: Article 17 Section 1 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse and Repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.