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New Licence for JSW

|   Investors Relations - common

On 21 June 2012 the Minister of Environment granted to Jastrzębska Spółka Węglowa S.A. licence No. 3/2012 to extract hard coal and methane as an accompanying mineral from the “Pawłowice 1” deposit. The licence was given until 31 December 2051. The “Pawłowice 1” deposit is located on the area of the communes ofPszczyna, Pawłowice, and Suszec, and to a small extent under the town of Żory.

The “Pawłowice 1” deposit, with an area of 15.83 km2, is situated in the direct vicinity of the operating Pniówek mine.

In the deposit development plan, covering the exploitation of the “Pawłowice 1” deposit until 2051, the industrial resources made available due to mining works to the depth of 1,140 m were determined at 79.99 million tonnes, whereas extractable resources were estimated at 54.3 million tonnes. The plans also include the possibility to access and use resources of the “Pawłowice 1” deposit at the depth range of 1,140-1,300 m. The total estimated volume of extractable resources up to the depth of 1,300 m for “Pawłowice 1” deposit is 90.6million tonnes.

The volume of methane industrial resources in “Pawłowice 1” deposit up to the depth of 1,140 m covered by the deposit development plan is 659.23 million m3.

The entire industrial resources consist of coke coal. A decided majority is the high quality ortho-coking coal type 35 sought after on the market, which represents approximately 78% of the industrial resources. The remaining 22% is coke type 34.The resources of the “Pawłowice 1” deposit will be accessible from excavation of the operating Pniówek mine.

The first extraction, from the Western part of the “Pawłowice 1” deposit, directly adjacent to the Eastern border of the mining area of the Pniówek mine, is planned for 2014.

The plans for 2012-2019 include works related to accessing the remaining part of the depositas well as sinking a new shaft VI, together with building the shaft infrastructure. The completion of the shaft construction will enable access to a part ofthe “Pawłowice 1”deposit lying at the depth range of 1,000-1,140 m.

In the process of accessing and exploiting the resources of the “Pawłowice 1” deposit, the technical infrastructure of the Pniówek mine will be employed with respect to ventilation of excavations, output delivery system, output vertical transportation system, coal mechanical processing system, and the dehydration system. Such a model of accessing the “Pawłowice 1” deposit enables significant reduction of investment outlays; additionally it is possible to reduce risk by introducing phases of the investment process.

The exploitation of the “Pawłowice 1” deposit will be conducted considering environment protection requirements included in the decision on environmental conditions of conducting the investments and the requirements covered by the licence to mine hard coal and methane as an accompanying mineral from the “Pawłowice 1” deposit.

The process of accessing and exploiting resources of the “Pawłowice 1” deposit up to the depth of 1140m will contribute to extending the lifetime of the Pniówek mine by approximately 25 years.  On the other hand, accessing resources deposited at the depth range of 1,140-1,300m will extend the mine’s lifetime by subsequent years.