poland mets webinar - austrade
TRANSCRIPT
POLAND METS WEBINAR
30 May 2019
Opportunities for Australian METS
companies to engage with the Polish Mining
Industry
Adam Rejman, Business Development Manager – Austrade
Warsaw
Webinar – 30 May, 2019
Australia Unlimited
OVERVIEW – POLAND & CENTRAL EUROPE AS A REGION
• CE is a A$2.6 trillion economy with a
population in excess of 130 million people
• Strong growth over the last two decades and
good forward trajectory
• Strong governance – fiscally conservative
• Strong flow of FDI and EU structural funds
• CE is well connected to the EU – market of
500 million people
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WHY CENTRAL EUROPE SHOULD MATTER TO AUSTRALIAN COMPANIES?
Australia Unlimited
OVERVIEW - POLAND
• Fastest growing and 10th largest economy
in Europe
• 6th largest population in Europe: 38 million
• Current GDP growth - 4.6%
• Over 25 consecutive years of economic
growth
• Inflation - 1.8%
• Unemployment rate - 3.4%
• Poland is referred to as the economic
“growth island” of Europe
• In 2018 Poland earned Developed Market
status
• Highly skilled labour force
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WHY POLAND?
OVERVIEW
• Poland is the second largest coal producing country in
Europe and ninth in the world
• The nation’s exploitable coal reserves are estimated
at 191 billion tonnes.
• There are currently 18 operating mines in Poland and
two Australian investors engaged in
developing mining projects in Poland.
• The coal industry remains an important employer with nearly 85,000 people in 2018,
• The major commodities mined are: hard coal, lignite,
copper, zinc, lead, silver and sulphur,
• In order to secure energy independency, the current
government is introducing measures to
sustain and boost the efficiency of the mining
sector
POLAND - MINING & RESOURCES
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OVERVIEW
• Major players on the Polish mining market:
› JSW (coking coal)
› PGG (thermal coal)
› LW Bogdanka (thermal coal)
› KGHM (copper)
› Belchatow (lignite)
• Most Polish mining companies are state controlled
• The mining sector is supported by large mining equipment, technology and
services industry and specialist education, research and development
organisations.
• There is a steady flow of Australian METS companies visiting Poland and the
region looking at new opportunities not only in coal but metal mining and mineral
processing as well.
POLAND - MINING AND RESOURCES
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• Hard coal - total production : 63 million tonnes
› 80,8% thermal coal
› 19,2% coking coal
• Imports : 18 million tonnes
› 70% from Russia
› 30% from Columbia, USA and Australia combined
• Exports : 3,6 million tonnes
› Main buyers : Czech Republic, Slovakia, Hungry, Austria and Germany
• Lignite: total production: 32 million tonnes – destined mainly for domestic energy
production.
• Copper : total production: 657 thousand tonnes
› Exports: 257 thousand tonnes (copper ore), 207 thousand tonnes (copper products)
POLAND – MINING STATISTICS
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Statistics 2018
Sources; ARP; Gazeta Prawna; Energetyka24
OPPORTUNITIES FOR AUSTRALIA
• Improving operational efficiency
• Mine planning and deposit assessment
• Coal-bed methane extraction, collection and
utilization
• Introduction of roof bolting (strata control) expertise,
technologies and equipment
• Mine safety including efficient, safe mining practices,
• Specialised underground communication systems
• Personnel management, including individual
worker/staff tracking systems, work cycle
management and payroll systems
• Environmental remediation of closed mine sites
POLAND - MINING & RESOURCES
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Webinar30.05.2019Brisbane, MelbourneWarsaw, Jastrzębie-Zdrój
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Agenda
• JSW Group overview• JSW mining assets• Coking coal production and CRM
list• Demand for Coking coal• Research and Innovations• Areas of focus in innovation and
technology for JSW• Polish-Australian cooperation in
case of JSW
COKING COAL
STRATEGIC FOR
INNOVATIVE
INDUSTRY
Daniel OzonKatowice, 12.XII.2018
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JSW Group OverviewLocated in the industrial heartland of Europe
4 existing coal mines in Poland
3 coking plants
headquartered in Jastrzębie-Zdrój, Poland
located 100% in OECD nations
Coking coal focused
#1 independent, not integrated coking company in EU
Holds 14% of the global coke trade market
Long mine life
30–40 years expected life of mines
Strong share price performance in FY 2017
JSW share price up by 43,9%
FTSE 350 mining Index up by 27,8%
Solid total resources and reserves
Total resources of approx. 5.497 billion tonnes
Reserves of 0.952 billion tonnes
JSW Group Key Financials
EURm 2012 2013 2014 2015 2016 2017 1H18
Revenue 2 114 1 812 1 627 1 657 1 538 2 091 1 164
EBITDA 569 333 126 -605 243 928 417
EBITDA margin 26,9% 18,4% 7,8% -36,5% 15,8% 44,4% 35,8%
Net Income 237 19 -157 -785 1 599 256
JSW mining assets
Resources(1)
(mt)996.6 889.4 1,869.5 1,741.8 5,497.3
Reserves(1)
(mt)222.3 188.3 219.2 323.0
952.8
Coal Type in Resources
63% HCC37% Semi-soft
90% HCC10% Semi-soft
79% HCC1% Semi-soft
20% type 36-37
36% HCC60% Semi-soft
4% Thermal–
Expected Life of Mine
60 years 34 yearsBor.: 13 yearsZof.: 34 years
Jas-Mos: 5 years
Knurów: 54 years
Szczygł: 60 years–
Budryk Pniówek
Borynia-
Zofiówka-
JastrzębieTotal
Knurów-
Szczygłowic
e
JSW Coal Mining
-
Warsaw
Katowice
Upper Silesia
Pniówek
Borynia-Zofiówka-
Jastrzębie
Budryk
Knurów-
Szczygłowice
Key supplier of a strategic rawmaterial to the Steel Industry
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75% of the EU’s domestic
coking coal production
is from JSW
EU Coking Coal Production
The estimated EU’s
import of coking coal
in 2017 was 36mt
EU demand
75%
2,5 million Customers from USA
Total numer of jobscreated in the EU:*
Value of production:*
123,5 bilion EUR
*Source: Oxford Economics
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Coking Coal
• Coking coal (metallurgical coal) is used to make coke,which is an indispensable ingredient in steel production.Currently 75% of steel is produced with coke in the blastfurnace-basic oxygen furnace (BF-BOF)
• Characteristics:
• low sulphur• low ash level• low phosphorous content
• Major producers & exporters: Australia, Canada, UnitedStates
• Securing reliable, sustainable and undistorted access tocoking coal is essential to sustaining the EU’s economy,growth and jobs
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Coking coal production• JSW is the largest producer of
high quality coking coal and amajor coke producer in theEuropean Union (4 miliontonnes annually)
• JSW aims to increase coaloutput to above 18 m tons andraise the percentage ofproduced coking coal to 85% oftotal production.
Steel production process
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9.8 9.911.1 11.6 10.7
3.8 4.0
5.2 5.24.1
13.6 13.9
16.3 16.814.8
65%
66%
67%
68%
69%
70%
71%
72%
73%
0
2
4
6
8
10
12
14
16
18
2013 2014 2015 2016 2017
Coking coal (mt) Steam coal (mt)
Production (mt) % Coking Coal
5,1644,492 4,573 4,604
6,805
806675
1,152 1,242
1,124
74.0%
76.0%
78.0%
80.0%
82.0%
84.0%
86.0%
88.0%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2013 2014 2015 2016 2017
Coking coal revenues (PLNm)
Coking coal production
and revenues
Coking coal revenue 85,8 %
Steam coal revenue 14,2 %
EU demand for coking coal
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• JSW is the largest producer of highquality coking coal and a majormerchant coke producer in theEuropean Union (4 milion tonnesannually)
• Raw steel production is rising at5.3% globally and 4.1% in the EUon a yoy basis (in 2017)
• The global demand for steel was up7% in 2017 while in the EU it rose2.5% (according to the World SteelAssociation)
• The stable demand for coke will bedriven by robust steel productionin the EU
• JSW aims to increase coal outputto above 18 m tons and raise thepercentage of produced cokingcoal to 85% of total production.
EU Coking Coal import in 2017
Canada3 mt
Russia5 mt
USA11 mt
Australia14 mt
Mozambique1 mt
Total imports to the EU36 mt
Others: 2 mt
Demand for coke in the EU steel production
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• The conventional technology for steel production ina blast furnace process, i.e. using coke and thuscoking coal is prevalent across the globe and in the EU
• On average, 350 kg of blast furnace coke is used, andthereby 490 kg of coking coal, to produce 1 ton of pigiron in the EU
• Steel mills in the EU consume approximately 37 mt ofcoke in the blast furnace process (blast furnaces +sintering), whose production consumes roughly 53 mtof coking coal per annum (excluding PCI)
• The European steel industry depends on coking coal.It accounts for nearly 2% of the European Union’stotal production and employs almost 2,5 milionpeople with the annual value of production over EUR120 bilion.
• In 2017 the European Union imported 38 miliontonnes of coking cole, which is twice as much as thedomestic production (17 milion tonnes)
• In the upcoming years the European transformationtowards a low-emission industry will drive up thedemand for environmentally-friendly products, i.e.electric vehicles and windmills
Research & Innovations
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Establishment of R&D Centre
1962 - 1994 2003 2004 2005 2011
1993
Merger of 7 independent
mines into the JSW Group
1962 – 1986
Development of several
mines in JSW Group
2011
IPO on Warsaw Stock
Exchange
(6 July 2011 r.)
2014
2014
Aquisition of new mining asset :
Knurów-Szczygłowice
2017
2017
Establishment of
R&D Centre
(JSW Innovations)
20162013 2015
2003 - 2008
Construction and development of
the Coal-Coke group
2008
JSW new ongoing Projects – coal segment
The Autonomus Longwall Project as the part of JSW 4.0 Smart Mine Program
Cooperation with the leading mining equipment suppliers on the market Cooperation with Polish and international research institutes
The Rooof Bolting Technology Project
The most efficient technologies
JSW and Polish – Australian cooperation
In June 2017, the JSW Company was the host of the International Mining Forum, whose honorary patron was theEmbassy of Australia. That initiated an active bond with the Australian Trade & Investment Commission and theEmbassy. Thanks to these contacts, a number of joint meetings and events took place, the main purpose of whichwas to search for the possibility of using the best Australian solutions in the conditions of JSW S.A.
From December 2017, representatives of JSW visited several times mines inAustralia as well as scientific and research institutes and technical universities aswell as leading suppliers of mining equipment. The result of these visits isestablishing contacts and planned cooperation among others with:
CSIRO - the largest Research Institute for Industry in the Commonwealth with ahuge reputation
Palaris - a mining consulting company in the technical area recognized on theAustralian market
Australian Drilling Systems – one of the leading Australian drilling companies thatprovides directional drilling solutions
Sedgman – an expert recognized on the Australian and global marketin the fieldof design and consultancy of mineral processing
At the same time, the Company has started cooperation with software supplierssupporting the planning process and geological modeling: Deswik andMineScape. Both of these solutions were created in Australia.
JSW and Polish – Australian cooperation
Technical trips of JSW to AustraliaMining assets of New South Wales and Queensland that have been visited by JSW in 2018
Integra Mine
Narrabri Mine
MoolarbenMine
Wambo Mine
KestrelMine
JSW - Australian on-going ProjectsOne of the ways of implementation of the main JSW business target known as Increase ofEffectiveness is the technological support of the coal and coke production process. Thereare good examples of excellent cooperation between JSW and the Australian partners
Project of MineScape ABB geological modeling, alongwith mine planning and design with Deswik, duringimplementation in JSW from 2018 May and June, one of the largest implementations in the todays world's mining
Brisbane workshop
JSW workshops
JSW and Polish – Australian cooperation
Letter of Intent JSW, JSW Innovations and CSIRO, Polish-Australian Conference, 2018 August, Sydney
Main challenges in JSW 4.0
Coal quality measurement automation andcomputerisation during the extraction andprocessing , integration of the obtained data withmodel predictions
Processes automation and computerisation in Laboratories
Underground mining safety improvement,underground work station monitoring, hazardsinformation system
Development of the wireless connection and localisation systems
with proactive functions
Advanced Data Analysis Centre andPredictive Mining Maintenance
Integration of all production stages into onedata model updated by the constant datainflow, creation of analytical and data-miningmodels
quality
safety
data analysis
Use of by-products
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JSW Climate Action Plan
0 0.5 1 1.5 2 2.5
2030 r.
2018 r.
2004 r. 0,27 CO2
1,2 CO2
2,2 CO2
Carbon credits savings [mln t]
METHANE COOLING
Methane utilization strategy 2018 – 2030
ENERGY
500%90 GWh 490 GWh Starting at 2022 in 3 years
Energy self-sufficiency
Hydrogen
JSW coking coal mine
Coke plant
Hydrogen separation
Zero-emission urban transport
Hydrogen separation technology from the coking gas
1 kg H2 4 l gasoline
HydrogenH2
Coke and coking gasproduction
Hydrogenseparation
JSW hydrogen for e-mobility
Hydrogen potential in JSW coking plants
Coking gas contains approx. 55% of hydrogen
JSW works on implementing hydrogen separation technology from the coking
gas with high purity i.e. 99,999% H2
intendent for fuel cells
The planned hydrogen separation installation at JSW coking
plant Przyjaźń will allow the production of approx. 8,000 tons of
hydrogen per annum, which will cover the annual demand for:
hydrogen - powered
75 tys. ton H2 per annum
More than 900 buses
or
More than 4000 cars
Tar processing
Production of high value added products from coal tars –by products of coke production ie. carbon fiber, graphite
electrodes, and nanostructures
Coke
production Coal tar Carbon fibers
Carbon nanostructures
Graphite electrodes
Light constructions
Electronic devices
Composite materials
Carbon nanostructures are used in automotive industry, chemistry and electronics, mainly thus their weight-strength ratio
Compounds made from carbon fibers have the best potential for light weightconstructions
Graphite electrodes contain about 1-3% of carbon nanostructures for lit-ionbatteries
Carbon fibers will take about 45% of future composite applications
Demand for carbon fibre is predicted to increase significantly from 77.000 tons in 2018 to 117.000 tons in 2022 (according to Fraunhofer Institut)
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