Coke and coal derivatives

The main product of the coke segment is blast furnace coke produced in Koksownia Przyjaźń and Koksownia Radlin forming part of KK Zabrze, accounting for 64% of the total amount of coke produced in 2012. Foundry coke produced in WZK Victoria accounted for 10% of the Group’s total coke production. The remaining production of the coke plants consisted of: industrial coke (nut I and II, pea coke, fine coke, broken coke and low-phosphorus coke), metallurgical coke and heating coke, whose share in the Group’s total production of coke was 19%, 3% and 4%, respectively.

In addition to coke, the coking plants produce coal derivatives: coking tar, benzene, liquid sulfur, ammonium sulfate and coking gas. Benzene and tar have regular customers in the European market. Cooperation with these customers has been conducted for years under long-term contracts. Sulfur and ammonium sulfate are sold in the domestic market. Surplus coking gas is sold to consumers directly by the coking plants.

In comparison to 2011, the Group’s coke production in 2012 increased by 22.6% and sales volume increased by 26.7%. 2012 is the first full period in which the production and sale of coke covers all coking plants currently owned by the Group. KK Zabrze has been subject to consolidation since 29 June 2011 and WZK Victoria since 9 December 2011. The two annual reporting periods take account of the acquisitions in accordance with their dates. Revenues on sales of coke and coal derivatives in the period under analysis reached PLN 4,307.9 million and were 2.1% higher than in 2011.

Production and sales of coke and revenues from coke and coal derivatives.

	2012	2011(3)	Growth
Production (in millions of tons)(1)	3.8	3.1	122.6%
External sales volume (in millions of tons)(2)	3.8	3	126.7%
Revenues on sales to external buyers (in PLN millions)(3)	4,307.9	4,220.0	102.1%

(1) Coke production from the coking plants belonging to the Group in individual periods.
(2) Volume of sales of the coke produced by the Group.
(3) Sales revenues in the Coke segment comprise revenues generated from sales of coke and coal derivatives both produced by the Group and the revenues from trading in coke and coal derivatives produced by external entities.

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