Business model

JSW Group is organised and managed on a segment basis, taking into account the type of goods and the type of production activity. Efficient extraction of high-quality coal is the first stage of production in the adopted business model, which determines further stages. A portion of the extracted coking coal is sold to subsidiary JSW KOKS for the manufacture of coke, coal derivatives and coke oven gas. The remaining coal (which does not meet coking criteria – thermal coal) and coking coal not used by JSW KOKS is sold to external customers.

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

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

JSW Group also has companies that perform important auxiliary functions, such as specialised mining and engineering work, IT support, research, development, repair services, security, insurance, training or laboratory services. Keeping in mind new challenges and the accompanying need to adapt JSW Group to the changing environment, the role of subsidiaries is significantly growing from the viewpoint of building the Group's value. Strong impact and interactions between the companies and stakeholders constitute an important element in JSW Group's value creation chain.

Hard coal mining takes place at JSW's separate organisational units - mines. The coal segment, which includes five mines, extracted 14.1 mt of coal in 2022. Delivering flagship investments in the mining area will increase the share of coking coal in overall coal output to 90% from 2026.

Thermal coal - a by-product of coking coal extraction - is mainly used to generate electricity and heat. It is sold to energy companies, industrial users and individual customers,

JSW deploys major funding for investments in the mining area in order to provide our customers with coal that meets specific quality parameters and to develop alternative methods for use of this raw material and the products that accompany the production of coal and coke. The extraction of coal is accompanied by the release of significant quantities of methane. Thanks to the programs and projects that have been implemented, the mines are carrying out a number of initiatives to reduce emissions by installing methane engines, which are used to generate electricity and heat.

The coal extracted at our mines features low ash content, low moisture, low sulphur and phosphorous content, as well as high coking ability and plasticity. These parameters mean that our coal is used as the key raw material in the manufacture of the highest-quality foundry coke, which features low CO₂ reactivity and high mechanical strength.

Coking coal - a coal with specific quality parameters and characteristics used for the industrial production of coke. Semi-soft (type-34) and hard (type-35) coking coals are produced at JSW Group's mines.

The production of coke takes place at standalone, non-integrated coking plants owned by JSW KOKS. The coke segment consists of three coking plants, with overall output reaching 3.2 mt of coke in 2022. The coke is produced from type-34 and 35 coals extracted from JSW's mines.  Coke production operations assume adjustment of the production level and structure within individual coking plants depending on market demand. JSW expects the production of coal derivatives (tar, benzol, sulphur, ammonium sulphate) to remain at a constant level in subsequent years, generating additional revenue.

Along with iron ore, coke and coking coal are the basic raw materials for the metallurgical industry. JSW KOKS S.A.'s coking plants produce blast-furnace, metallurgical, foundry, industrial and heating coke. The use of each type of coke is mainly determined by requirements of the technological process in which it will be used and the accompanying required parameters: granulation, mechanical strength, abrasion, ballast content: moisture and ash.

Coke is a fuel derived in the coking process, which consists of heating up a mixture of special types of coals without access to air at a temperature of approx. 1000°C. During the coking process, volatile matter is driven off in the form of gases, leaving pure coke with a high coal content - a high-calorific and slow-burning product. The gas obtained in the coking process is captured and used to produce electric and thermal energy. As a result of this process, negative impact on the environment is substantially reduced.

Sales and customer service

The iron and 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.

Sales are conducted in two ways:

- forwarding and transport by road - coke and coal derivatives - shipments to customers are performed by subsidiaries JSW Logistics sp. z o.o. and BTS sp. z o.o., among others

- forwarding and transport by sea - shipments to customers from storage sites in ports

JSW Group places an emphasis on partner-like, transparent, market-based negotiations concerning quantity and price terms, care about product quality and respond to every objection or complaint from our customers, flexibly responding to changes and divergences from ordered volumes in the case of unexpected problems or failures at our customers' plants, and ensuring that deliveries are on time and any logistics problems are solved together. No less important to us is maintaining a trust-based partnership with our customers and counterparties. We care about the privacy of all our customers.

The iron and 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.

Sales are conducted in two ways:

• forwarding and transport by road - coke and coal derivatives - shipments to customers are performed by subsidiaries JSW Logistics sp. z o.o. and BTS sp. z o.o., among others
• forwarding and transport by sea - shipments to customers from storage sites in ports

JSW Group places an emphasis on partner-like, transparent, market-based negotiations concerning quantity and price terms, care about product quality and respond to every objection or complaint from our customers, flexibly responding to changes and divergences from ordered volumes in the case of unexpected problems or failures at our customers' plants, and ensuring that deliveries are on time and any logistics problems are solved together. No less important to us is maintaining a trust-based partnership with our customers and counterparties. We care about the privacy of all our customers.

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.