Coal

The Group’s coal mining activity in 2012 was performed by five coal mines. The Borynia-Zofiówka and Pniówek mines produce good quality coking coal mainly for the production of blast furnace coke. The Jas-Mos mine (On 1 January 2013, the Parent Company merged the Borynia-Zofiówka mine with the Jas-Mos mine into the three-section Borynia-Zofiówka-Jastrzębie mine.) produces coking coal with very low phosphorus content and low volatile matter content, used successfully in the production of foundry coke. The Budryk and Krupiński Mines currently produce primarily steam coal used by power plants to generate electricity. The share of coking coal and steam coal in total net coal production in 2012 was 70.4% and 29.6%, respectively.

In 2012, the quality parameters of individual shipments of commercial coal, in particular type 35 (hard) coal from the Borynia-Zofiówka, Pniówek mines and the Jas-Mos mine (with low volatile matter coal – LVM) and type 34 (semi-soft) from the Budryk and Krupiński mines and steam coal produced in the Borynia-Zofiówka, Budryk and Krupiński mines fitted within the limits set forth in the commercial agreements.

The coal production volume in 2012 was at the level of 13.5 million tons, i.e. 0.9 million tons more than in 2011 and 0.2 million tons more than planned for 2012. The total sales of coal produced by the Group, comprising intra-group and external deliveries, were realized at 12.7 million tons, i.e. 0.3 million tons more than in 2011. In 2012, compared to the same period of the previous year, total sales of coking coal increased by 0.5 million tons. However, supplies of steam coal in 2012 decreased by 0.2 million tons compared to 2011. It is noteworthy that the share of internal and external sales of the best quality type 35 (hard) coal that attracts the highest prices in the Group’s total deliveries keeps increasing (2010: 55.9%, 2011: 57.8%, 2012: 60.4%).
Coal production and sales broken down into intra-group sales and external sales.
 

	2012	2011	Growth
Production (in millions of tons)	13.5	12.6	107.1%
- Coking coal (in millions of tons)(1)	9.5	8.8	108.0%
- Steam coal (in millions of tons)	4	3.8	105.3%
Total volume of JSW S.A.’s sales (in millions of tons)(2)	12.7	12.4	102.4%
- Coking coal (in millions of tons)	9.1	8.6	105.8%
- Steam coal (in millions of tons)	3.6	3.8	94.7%
Volume of intra-group sales (in millions of tons)(2)	4.5	4	112.5%
- Coking coal (in millions of tons)	4.2	3.7	113.5%
- Steam coal (in millions of tons)	0.3	0.3	100.0%
External sales volume (in millions of tons)(2)	8.2	8.4	97.6%
- Coking coal (in millions of tons)	4.9	4.9	100.0%
- Steam coal (in millions of tons)	3.3	3.5	94.3%
Sales revenues (in PLN millions)(3)	7,040.9	8,036.3	87.6%
Intrasegment sales revenues (in PLN millions)	2,906.0	3,093.0	94.0%
Revenues on sales to external buyers (in PLN millions)	4,134.9	4,943.3	83.6%

(1) The share of hard coal in the total coal production in 2012 and 2011 was 57.5% and 58.2%, respectively.
(2) The volume of sales of coal produced by the Group.
(3) The figure presented includes the Group’s revenues on sales of coal produced by other entities in 2012 and 2011 in the amount of PLN 304.2 million and PLN 186.7 million, respectively.

download table

In 2012, sales of steam coal to external customers decreased by 0.2 million tons compared to 2011 and by 0.7 million tons compared to 2010, primarily a result of lower domestic demand from utility companies for coal used in the production of electricity. In the domestic structure of energy production, the share of cheaper lignite increased at the expense of coal.

In external sales of coking coal, type 35 coal produced by the Group accounted for 86.4% (2011: 89.1%). The remaining 13.6% was type 34 coal (2011: 10.9%). By the same token, sales of type 35 coking coal produced by the Group accounted for 80.5% (2011: 75.5%) and sales of type 34 coal – 19.5% of intra-group sales (2011: 24.5%).

In 2012, external coal deliveries to local buyers accounted for 79.9% (by volume) and 75.8% (by revenues). The remainder were deliveries to foreign customers. In 2011, external coal deliveries to local buyers accounted for 83.0% (by volume) and 78.4% (by revenues).

In 2012, revenues on sales of coal to external customers reached PLN 4,134.9 million and were lower by PLN 808.4 million (16.4%) than those generated in the same period of the previous year, which is primarily a consequence of the ongoing economic slowdown and a decrease in the prices of coking coal in the global markets.