Business model

JSW Group's organisation and management are segment-based and take into account the type of offered goods and the type of manufacturing activity. Efficient mining of high-quality coal is the first stage of production in the business model, closely linked to subsequent stages. Some of the mined coking coal is sold to subsidiary JSW KOKS to produce coke, carbon-related products and coke oven gas. Coal for energy-generation purposes as well as coking coal that is not used by JSW KOKS are sold to external customers.

The second stage is the production of coke using the coking coal extracted from JSW's mines.

The final stage is the sale of JSW Group's products. Each of these stages is additionally driven by a range of technical, market and internal factors.

JSW Group also includes companies that perform support functions, such as IT, research, development and innovations, repair services, security, insurance, training and laboratory services. Keeping in mind new challenges and the resulting need to adapt the Group to a changing environment, the role of subsidiaries is considerably growing from the viewpoint of building JSW Group's value. Impactful relations and interactions between each company and its stakeholders constitute a shared, important element in JSW Group's value chain.

Hard coal mining takes place at JSW’s separate organisational units – mines. The coal segment, which includes five mines, extracted 14.4 million tonnes of coal in 2020 (coking coal accounted for 76.9% of total output). Implementing the key investments in the mining area will raise the share of coking coal in total output to 85% from 2021.

In October 2020, the Management Board of JSW S.A. set up a team with the task of developing an operational model for JSW S.A. that focuses primarily on coking coal. In its work, the team analysed the coal resource base and technological lines at processing facilities to assess the feasibility of the objective – coking coal accounting for 100% of production. It was assumed that after the change in operational model and implementation of replacement and development investments at each mine’s mechanical coal processing facility, JSW S.A. will be able to produce primarily coking coal from 2031.

Thermal coal – this is secondary coal mined along with coking coal – it is mainly used for electricity and heat generation. It is sold to energy companies, industrial users and individual customers, with approx. 95% being sold to power plants and heat-and-power plants.

The mines, which are some of the largest employers in the region, employ more than 22 000 people in total, and their annual output reaches nearly 15 million tonnes of coal. JSW is implementing considerable investments in the mining area in order to ensure the appropriate quality parameters of coal and to develop alternative methods for the use of this raw material and products that accompany the production of coal and coke. Approx. 40% of the coking coal produced by JSW Group is processed into coke at the Group’s coking plants.

The coal mined at our mines features a low content of ash, low moisture, low sulphur and phosphorus, along with high sinterability and plasticity. Thanks to these parameters, this coal is used as the main raw material in producing metallurgical coke of the highest quality, which features low reactivity to CO2 and high mechanical strength.

Coking coal – coal with specific quality parameters and characteristics, intended for the industrial production of coke. JSW Group’s mines produce semi-soft gas-coking (type 34) and hard orthocoking (type 35) coals.

Coke is produced at standalone, non-integrated coking plants owned by JSW KOKS. The coke segment consists of three coking plants, which in 2020 produced 3.3 million tonnes of coke. Coke is produced from type 34 and type 35 coal extracted from JSW's mines. The level and structure of production at each of the coking plants in the coke production area are adapted to market demand. JSW also produces carbon-related products (tar, benzol, sulphur, ammonium sulphate). The Company plans to maintain production at a steady level in the coming years.

Coke, and thus also coking coal, is the key commodity, aside from iron one, in steel-making. JSW KOKS's coking plants produce blast furnace, metallurgical, foundry, industrial and heating coke. The use of a given type of coal mainly depends on the requirements of the technological process in which is it used and on the associated required parameters: gradation, strength, abrasion resistance, ballast content: moisture and ash. Coke, and thus also coking coal, is the key commodity, aside from iron one, in steel-making.

Coke - fuel that is derived in a coking process, which consists of heating up a mixture of special types of coals without access to air at a temperature of around 1000°C. In the coking process, the volatile parts of coal are released in the form of gases, leaving clean coke with high coal content - a high-calorific and slow-burning product.

The steel industry is the largest and crucial customer for coke, where it is mainly used to produce pig iron in a blast furnace process, while finer types are used to produce agglomerates from iron ore that are then used in the production of ferro-alloys. Foundries that use high-quality foundry coke are also in this customer group.

Two delivery options are available:

• road forwarding and transport - coke and carbon-related products - shipments to customers are handled by subsidiaries JSW Logistics sp. z o.o. and BTS sp. z o.o.
• maritime forwarding and transport - shipments to customers are handled by storage sites in ports with the intermediation of subsidiary JSW SHIPPING sp. z o.o.

The Group places emphasis on partnership-, transparency- and market-based negotiations of quantity and price terms, focusing on product quality and responding to each comment or complaint from customers, flexibly responding to changes and withdrawing from planned volumes in the light of unexpected problems or failures at customers' facilities and on ensuring the timeliness of delivery and jointly resolving any logistics problems. Maintaining a trust-based partnership with our customers and counterparties is equally important to us. We protect the privacy of all our customers. In 2020, JSW Group did not identify any complaints related to customer privacy violations or data loss.

Approx. 40% of the coking coal produced by JSW Group is processed at the Group's coking plants into coke, which aside from iron ore is the key element in steel-making. Coal for energy-generation purposes is mainly used to generate electricity and heat. It is sold to energy companies, industrial users and individual customers. Approx. 95% is sold to power plants and heat-and-power plants.