Innovation management

Using modern IT tools to obtain better knowledge, optimise production costs and increase safety is JSW Group's response to the emergence and development of industry 4.0 in global mining.

We are certain that using the latest technologies is the right direction that will not only ensure JSW Group's optimal development but also set trends for the entire mining industry. Rationally introduced innovative solutions will help us in developing our core business.

Aside from the ever stricter requirements from the competitive, social and legal environment, changes in JSW Group's innovations policy are driven by Poland's innovation support ecosystem. Numerous incentives and tools supporting investments in the R+D+I area are being introduced through actions such as the "Plan for Responsible Development," developed by the Council of Ministers. One of the Plan's five pillars is "Re-industrialisation," which also covers our Group's business, helping to implement our R+D+I strategy and offering massive support via the innovations ecosystem that is being developed in Poland.

JSW Innowacje, a JSW Group company formed in 2017, is dedicated to development projects. The company's vision and mission is to become a leading innovation centre on the European market for mining and the development of technologies and systems increasing the potential and capabilities of the Polish extractive industry. JSW Innowacje is implementing projects based on the R+D+I Strategy, adopted in mid-2018, which comprehensively describes our approach to innovations, deployments, implementation of innovative ideas and projects with an embedded research component. Works on developing a Strategic Research Agenda for 2020 were carried out in 2019, taking into account R+D+I initiatives. The Agenda will be updated every year in order to optimally implement on-going and planned projects, evaluate new initiatives and minimise the risk of on-going or planned projects failing. Initiatives will be classified and evaluated with the help of the Scientific Council, which was established in 2019. As an advisory body, the Scientific Council supports the development and fine-tuning of JSW Group's strategy in the R+D+I area. It is also intended to assist in outlining the Strategic Research Agenda. The Scientific Council consists of selected experts working at renown universities and institutions such as AGH University of Science and Technology, Silesian University of Technology, State Mining Institute, Institute for Chemical Processing of Coal, the work, know-how and experience of whom are closely correlated to the Group's activities in the R+D+I area.

In accordance with the financial plan included in the strategy, JSW Group will provide annual funding for the R+D+I area's objectives, which will be allocated to projects that are deemed as key for implementing the Innovation Strategy. In 2019, JSW Group spent PLN 65 million on research and development, which is equal to 0.75% of the Group's revenue from sales. To maximise effects and increase scale in the innovation area, the Group is also using external financing from institutions such as: EU funds (Silesian Voivodship's Regional Operational Programme), National Centre for Research and Science Development.

In order to reach maximum effectiveness and quality in our research and development projects, we are implementing them with external partners: scientists, researchers, laboratories, scientific institutions, universities and innovative enterprises from the extractive industry and related sectors. In 2019, JSW Group established cooperation with some of the most prestigious and influential institutions in the world involved in research, development and the latest technological solutions. We established cooperation with Australian Drilling Systems, Microsoft Corporation and IBM, and signed contracts and agreements with:

• Datamine - an Australian provider of mining software - cooperation in the area of applying software for deposit modelling and simulating mine ventilation systems,
• Palaris - an Australian mining services firm - cooperation on a pilot implementation of a roofbolt support system at KWK Pniówek,
• Komatsu Mining Corp. - launch of a Bolter Miner at KWK Budryk,
• LW Bogdanka S.A. and KGHM Polska Miedź S.A. – established closer cooperation between the largest mining firms in Poland as regards development of mining.

Project management is carried out in accordance with the Methodology for Managing R+D+I Projects. The methodology covers implementing R+D+I projects at JSW Group through decision gateways and appropriate reporting for each R+D+I project. The following units are involved in R+D+I project management: JSW's Management Board, JSW's Development Office and subsidiary JSW Innowacje.

The methodology sets out a detailed process for implementing new and existing projects at JSW Group.  It consists of two basic elements making it possible to identify essential tasks related to implementing R+D+I projects - process map and description of tasks and documentation at each stage of the process.

• Gathering and submitting project ideas,
• Preliminary selection of ideas from outside JSW Group,
• Preliminary selection of ideas from within JSW Group,
• Recommendations on project launches issued by project evaluation teams formed at JSW Group companies,
• Formal commencement of projects and appointment of project bodies (Steering Committee, Steering Committee Chairperson, Project Leader),
• Process for preparing financial plans related to R+D+I projects,
• Process for accessing funds for innovative and strategic projects,
• Conducting projects in line with rules and procedures set down in the R+D+I Methodology, taking into account JSW Group's Program and Project Management Methodology,
• Project progress reporting:
  • Within the project process - on-going reporting on project progress by the Project Leader,
  • Collective reporting by JSW Innowacje - quarterly reporting on progress across JSW Innowacje's projects,
• Moving projects through decision gateways.