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Coal segment

Coal Segment

The Group’s coal mining operations are performed by its four coal mines. All these mines do their business within the geographical boundaries of their concession areas for which the concession expiry date, the surface area and the depth are specified.

  • Coal production structure in the Group

    The structure of the Group’s coal production is adapted on an ongoing basis to the rapidly changing market needs, taking into account the supply and demand of the domestic and foreign markets. The share of coking coal and steam coal in total net coal production in 2017 was 72.3% and 27.7%, respectively.

  • Production and sales of coal

    The Group’s coal production volume in 2017 reached 14.8 million tons, i.e. 2.0 million tons less than in 2016, which was partly due to the transfer of the Jastrzębie Section in 2016 and KWK Krupiński in 2017 to SRK.

    In 2017, a total of 14.6 million tons of coal was sold (10.1 million tons to buyers from outside the Group), of which, on account of the intended use of coal, the share of coking coal sales in the Group’s total deliveries was 71.4% with the remaining 28.6% made up of steam coal with a calorific value consistent with the customers’ requirements.

    The Borynia-Zofiówka-Jastrzębie and Pniówek mines offered mainly coking coal characterized by a low content of ash, sulfur and volatile matter. The coal from the Budryk and Knurów-Szczygłowice mines is coking gas coal with a low content of ash and sulfur but a higher content of volatile matter, which is typical for this type of coal.

    Key quality parameters of coal produced by the Group in 2017 (mean values)

    CATEGORYKWK BORYNIA-ZOFIÓWKA-JASTRZĘBIEKWK PNIÓWEKKWK KNURÓW-SZCZYGŁOWICEKWK BUDRYKKWK KRUPIŃSKI
    Section BoryniaSection JastrzębieSection ZofiówkaSection KnurówSection Szczygłowice
    COKING COAL
    Ash content Ad (%)7.05.87.26.77.16.66.58.0
    Humidity Wtr (%)10.58.910.08.56.77.76.77.1
    Sulfur content Std (%)0.60.50.50.60.60.40.70.7
    Volatile matter content (Vdaf %)24.021.020.926.032.929.430.736.9
    Sinterability (RI)79.066.072.083.078.080.083.069.0
    Coke strength after reaction (CSR %)59.447.746.460.742.343.644.826.2
    CO2 coke reactivity index (CRI %)30.641.241.427.239.739.040.346.0
    STEAM COAL
    Ash content Ar (%)--19.012.924.519.225.216.6
    Humidity Wtr (%)--7.83.29.311.09.311.3
    Sulfur content Str (%)--0.40.60.70.50.70.7
    Calorific value (Qir MJ/kg)--24.928.921.823.221.823.7

    The total sales of coal produced by the Group’s mines, comprising intra-group and external deliveries, were 14.6 mt, i.e. 2.6 million tons less than in 2016 (coking coal sales declined by 1.4 mt, while steam coal deliveries edged down by 1.2 mt). The drop in the volume resulted from lower production level.

    In 2017, compared to the corresponding period of the previous year, external sales of coking coal dropped by 0.5 mt (7.8%) and internal sales decreased by 0.9 mt (16.7%). The decline in internal sales was caused to a large extent by the sale of Wałbrzyskie Zakłady Koksownicze “Victoria” S.A. (at present classified to external sales).

    In the period in question, the volume of sales of steam coal to external buyers dropped by 1.1 mt, compared to the previous year, which resulted from the decrease in the production of this product range.

    External coal deliveries to domestic customers were 79.3% (by volume) and 71.3% (by revenues) and 20.7% and 28.7%, respectively, to international customers. For comparison, in 2016 these percentages were as follows: local buyers 73.2% (volume) and 71.4% (revenues); foreign buyers 26.8% (volume) and 28.6% (revenues).

    In 2017, revenues on sales to external buyers in the coal segment hit PLN 4,925.9 million and were up PLN 1,374.3 million (by +38.7%) than recorded in the corresponding period of 2016, which is attributable to the change of the coal sales structure and significantly higher prices, reflecting the trend in the global market.

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