Bogdanka responds to market challenges with a new strategy

The strategy presented by Lubelski Węgiel Bogdanka is a response to the challenges depicted in the draft of Poland’s Energy Policy until 2040. It focuses chiefly on preserving production capacity, upholding high profitability ratios, demonstrating respect for the natural environment and maintaining the position of the region’s economic and social stronghold. The key to achieving these objectives is diversification of the company’s business and focus on two products, specifically involving the selective extraction of coking coal.

Bogdanka is an active participant in discussions about the future of the bituminous coal mining sector aimed at reaching a new social contract governing the operation of the mining industry until 2049 and defining the methods of its transformation.

According to its key assumptions, the Strategy is aimed at preserving production capacity, upholding the company’s high profitability ratios, carrying out selective extraction of type 34 coal, diversifying revenues by expanding existing areas of business and selecting, prospecting and documenting new deposits of type 35 coking coal.

“Regional stakeholders have specific expectations towards our company and want us to continue to operate as an economic and social stronghold of Lubelskie Voivodship. In turn, our current market environment poses new challenges to which we must respond actively. The stability of the company’s business is of fundamental significance to the social safety of our staff. This is why we are presenting a strategy that calls for continuation and transformation in the area of our core business as well as transformation outside our core business. In other words, we are going to pursue diversification of our revenues. In the medium and long term, Lubelski Węgiel Bogdanka will remain a dividend-paying company,” said Artur Wasil, President of the Lubelski Węgiel Bogdanka Management Board.

In accordance with the company’s vision, Lubelski Węgiel Bogdanka will remain the performance leader in the mining industry attaining the highest standards of work safety, flexibly adjusting its operations to evolving environmental requirements and market conditions and involved in endeavors aimed at reaching the “green deal” through diversification of its business.

“The strategy presented by the company is aligned perfectly with the government’s strategy to restructure the Polish mining sector. These plans have the full backing of the Ministry of State Assets and the whole government. It has just been announced that Bogdanka will mine two products: steam coal and type 34 and 35 coking coal. These plans are a guarantee that Lubelski Węgiel Bogdanka will not only be the last mine to cease the extraction of thermal coal but is also on the right track to be a workplace for individuals intent to pursue their professional career in the mining of coking coal. It is an enormous challenge for Bogdanka to become a two-product colliery, but I am sure that the miners of the Lublin region will handle this challenge well and that the company’s ambitious plans will be carried out completely,” emphasized Artur Soboń, Secretary of State at the Ministry of State Assets, Government Representative for the Transformation of Power Companies and the Coal Mining Sector.

The Strategy update announced by Bogdanka is consistent with the assumptions of the draft of Poland’s Energy Policy until 2040 and defines the Enea Group’s strategy for this business area until 2030 with an outlook until 2035 by taking into account the anticipated demand for steam coal to be generated by the power plants and cogeneration plants included in the Enea Group’s generation area.

“LW Bogdanka is a major member of the Enea Group. The update of Bogdanka’s Strategy is aligned with the Enea Group’s plans for this business area as the company is responsible for the handling of the Group’s mining operations. It is crucial for Bogdanka’s development plans to take into consideration the rapid market changes affecting especially the Polish electricity generation sector. Diversification of production, preserving profitability and running the company’s business in consideration of LWB’s significant role in the region’s economic life is how we see the company’s future,” said Paweł Szczeszek, President of the Enea Management Board.

The company aims to increase the share of revenues generated from initiatives pursued outside its core business to 30% by 2040. The evolution of the company’s structure of revenues will be effected in stages (5% in 2025, 10% in 2030).

“The Strategy we have just presented calls for both continuation and transformation. According to its key assumptions, the Strategy is aimed at preserving production capacity, upholding the company’s high profitability ratios, carrying out selective extraction of type 34 coal, diversifying revenues by expanding existing areas of business and selecting, prospecting and documenting new deposits of type 35 coking coal,” said Dariusz Dumkiewicz, Vice-President of the LW Bogdanka Management Board in charge of development.