Barbórka is in doubt. JSW cuts costs after a billion-dollar loss

Jastrzębska Spółka Węglowa fell into the most serious crisis in years. After the first half of the year, the company reported a net loss of PLN 2.075 billion with falling revenues, and the management announced a program of sharp belt tightening, also including employee costs. The most sensitive issue for the crew is this year’s St. Barbara’s Day. The acting president of JSW, Bogusław Oleksy, directly admits that as of today, the company cannot confirm the payment of bonuses. This is a signal of how serious the mining giant’s finances are.

Mining costs

The company’s management indicates that the main problem is uncompetitive mining costs, which have significantly deviated from market realities in recent years. The recovery plan includes reducing production costs and adapting the remuneration policy to the company’s condition. Among the actions being considered is a return to the standard level of 80%. sick pay. As the president emphasizes, the goal is not to take away privileges, but to restore cost balance, without which the scale of operations cannot be maintained.

JSW’s problems were caused by both external factors and internal errors. The market was hit by low coking coal prices and the strengthening of the Polish zloty. An additional blow was the so-called solidarity contribution – PLN 1.6 billion paid in 2022–2023, as the only company in Poland. The company has already applied for the return of these funds. Within the organization, the problem turned out to be raises granted despite the already visible economic downturn and ten-year employment guarantees. Their possible termination would mean the need to pay high compensation, which would further burden the budget.

The investment audit also revealed serious irregularities. The budgets of some projects have almost doubled, and yet they have not been completed. Examples include the Radlin heat and power plant and the new coke oven battery in Koksownia Przyjaźń. The Management Board announces a review of the investment portfolio and adjustments to schedules to reduce the risk of further delays and cost increases.

Looking for savings

At the same time, JSW is looking for savings beyond wages: in material costs, logistics and energy. The company wants to increase energy independence by developing its own electricity production from methane for the plants’ needs. This is intended to reduce sensitivity to energy price fluctuations and improve the predictability of operating costs.

In the background, there is a discussion about the strategic importance of JSW. Coking coal has the status of a critical raw material in the European Union, and Poland is one of the leading producers. Therefore, not only the situation of thousands of employees and subcontractors, but also the resilience of the European steel production chain depends on the company’s condition. An EU CBAM mechanism appears on the horizon, which from 2026 is intended to protect the steel market against emissions “imported” with products from outside the EU. This is a potential competitive shield for JSW – provided that the company quickly reduces costs and stabilizes its finances.

Will Barbórka be credited to miners’ accounts this year? The management board does not provide any guarantees for now. The pace of implementation of the savings plan and improvement of the market environment will be decisive. One thing is certain: without effective cost correction, the company will not be able to return to the path of profitability, and every zloty spent today must be justified by the effect on future competitiveness.