New JSW Strategy

“The updated strategy is different from the strategies presented so far. What is so unique about it? Well, for the first time ever, the business part is integrated with the environmental part. This way, we have developed a consistent document that shows explicitly that we are launching the European Green Deal at JSW,” said Tomasz Cudny, President of JSW SA.

According to the strategic objectives adopted for mining operations, the JSW Group will make efforts to increase annual production of coal from approx. 13.8 million tons in 2021 to about 16.1 million tons in 2030. JSW will strive to boost the share of coking coal in the production mix to over 90 percent, which will contribute to higher profitability of mining operations. The JSW Group also assumes a sustainable level of coke production and sales, which should stabilize at the average of about 3.6 million tons annually.

“As we planned our operations, we placed the biggest emphasis on the evaluation of those risks that are inherent in mining operations conducted by mining companies. We have respect for nature, which has thwarted mining plans more than once in the past. In the Strategy, we have set goals that are achievable rather than goals that require luck for their achievement.  The JSW Strategy for 2022-2030 is a document that sets out our directions and tasks. If we implement its assumptions then I feel good about the future of JSW,” President Cudny said. 

In order to increase coal production to approx. 16.1 million tons per year, it is also necessary to open access to increasingly deeper seams. For this purpose, the company plans to deepen the existing shafts and build new mining levels. In order to satisfy the mining targets, it is necessary to, among others, carry out an appropriate level of roadway and heading work. Every year until 2030, the Company will execute an average of 77 thousand running meters of workings annually.

Improved efficiency and investments
JSW also wants to improve efficiency of its production. Currently, the productivity is about 620 tons of coal per miner in the company (JSW+SiG). It should increase to approx. 790 tons by 2030. At the same time, the Strategy assumes that average headcount in the JSW Group will be optimized, from the current 30 thousand FTEs to approx. 29 thousand FTEs by 2030. 

The strategy for 2022-2030 envisages the JSW Group to incur capital expenditures in the total amount of about PLN 22.4 billion. Capital expenditures in the coal segment will represent approx. 80% of the JSW Group’s total capital expenditures.

Financial buffer and stabilization fund
The Company has planned to ensure a stable financing structure by striving to have equity achieve and maintain a level of at least 50% of equity and liabilities, and cover non-current assets with fixed capital, too, The key financial assumption of the strategy is to achieve the average EBITDA margin of at least 25% in 2022-2030. The Company also wants to enlarge its cash buffer to ensure that the key liabilities may be covered, including in particular liabilities for salaries, to the state budget and to business partners. The buffer will be used in periods of dramatic decreases in proceeds from sales. The FIZ stabilization fund is the safety measure, which should protect the Company from the loss of liquidity in times of economic downturn on the coal market. The Strategy also emphasizes efforts to obtain dedicated funds to finance JSW’s green transformation as well as long- and short-term instruments to finance development and current activities.

Environmental Strategy
Environmental protection is an extremely important element of the JSW Group Strategy. The document assumes that the carbon footprint would be reduced by 30% by 2030 and that carbon neutrality would be achieved in 2050. The goals are to be achieved mainly by reducing methane emissions, which account for 74 percent of JSW’s carbon footprint. Since 2018, JSW Group has been running a program named “Economic Utilization of Methane” aimed at reducing methane emissions into the atmosphere and utilizing it for energy production.  The other program planned for reducing methane emissions is “Reduction of Methane Emissions”, which aims to increase methane capture to 50% and methane utilization to 95%. The increased volumes of captured methane will be redirected to newly-installed co-generation gas engines fired with mine gas (methane) and will boost power production to 60 MWe starting in 2025. JSW KOKS also executes an investment project, which will result in a significant reduction of coke oven gas emissions.  In the Radlin Coking Plant, a 28 MWe co-generation unit fired with coke oven gas is under construction. The Strategy also provides for the construction of photovoltaic farms with the combined capacity of 110 MWp by 2028.  The JSW Group will also continue the pursuit of its current environmental protection priorities in the area of protection of water resources, waste management and protection of biodiversity, taking into account the needs of its stakeholders and local communities.