The Knurów-Szczygłowice Mine produces 3.8 million tons of coal annually. At present, 38% of its output is high quality coking coal in which JSW specializes. It has 1 260 million tons of economically-viable resources of hard coal, which will enable the mine to operate for more than 80 years while considerably strengthening JSW’s position as the leading producer of coking coal in Europe.
“The transaction executed by JSW is a favorable and forward-looking deal. We have been interested in the Knurów-Szczygłowice Mine for many years. This acquisition is well-aligned to our strategy of expanding our coking coal resources and growing production in subsequent years”, said Jarosław Zagórowski, CEO of JSW. “Buying the Knurów-Szczygłowice Mine, which is adjacent to one of JSW’s mines, was a natural direction for our expansion that will deliver measurable synergies and added value to our shareholders”.
The transaction price is PLN 1.49 billion. This price was deemed to be a fair price for JSW from the financial point of view by the analysts of the Citigroup international banking group. To finance this deal JSW will issue bonds denominated in Polish zloty and US dollars, which will be subscribed for by a consortium of banks under the agreed issue program.
The purchase of the „Knurów-Szczygłowice” Hard Coal Mine will reduce the average unit cash cost of coal production across the JSW Capital Group. Lower costs of equipment purchases, lower transportation costs, the convenient location of the acquired mine facilitating access to rich deposits in Knurów-Szczygłowice and the expansion of the product portfolio will, among other factors, contribute to the anticipated synergies, which will materialize in the next few years.
