Poland’s JSW declares force majeure for the third time this year

Polish coking coal producer Jastrzebska Spolka Weglowa (JSW) has declared force majeure for the third time this year due to an increased risk of fire at one of its key production facilities, the W-3 longwall at KWK Pniowek mine. This is reported by Bankier.pl.

The company plans to close this area, which has coking coal reserves of about 100 thousand tons. As a result, JSW has lowered its coal production forecast for 2024 to 12.35 million tons against the previously expected 12.45 million tons.

This is JSW’s third force majeure announcement in the last 12 months, following previous incidents with fires at KWK Pniowek and KWK Budryk mines in December last year and April this year. According to the information provided in September, the increased frequency of methane incidents, fires and cave-ins is making it much more difficult to utilize the longwall.

JSW’s financial performance has also been significantly impacted by the incidents, which have led to lower productivity and higher costs. In the first half of 2024, the company recorded large losses, recording an asset impairment of more than PLN 5 billion (approximately $1.24 billion) in the second quarter. This was the result of revised production forecasts, expectations for coal prices in the coming years and a decrease in projected cash flow, as well as significant maintenance costs.

In September, JSW revised its coal production forecast for 2024 to 12.45 million tons due to a longer-than-expected recovery from the mine fire and increased natural hazards. In July of this year, the company expected to produce 13.07 million tons of coal.