Good afternoon, ladies and gentlemen. I'd like to welcome you very cordially to the earnings conference of the JSW Group. At the beginning, I would like to introduce the current composition of the Management Board of JSW. My name is Stanisław Prusek , and on the 9th of July of this year, the supervisory board seconded me or delegated me to be the temporary CEO of JSW and at the same time, they've entrusted me with being the Vice President responsible for Technical and Organizational Matters. On the 27th of August, my term will come to an end. This is the term of secondment. I would like to inform you that on the 30th of July of this year, the Supervisory Board appointed three new Management Board members. Two of them are present at today's conference.
On my left is Mr. Robert Ostrowski, who's the Vice President responsible for Economic Affairs. On my right side is Mr. Sebastian Bartos, who's the Vice President responsible for Sales. Next to Mr. Bartos is Mr. Artur Wojtków, who's the Vice President responsible for Labor and Social Policy. The Supervisory Board entrusted him on the 30th of July with being the Vice President responsible for Development. The third newly appointed Management Board member of JSW is Mr. Edward Pasternak. He's going to be responsible for Operational Matters and Technical Matters. He'll begin his service on the 1st of September of this year. I'd like to remind you that on the 5th of August of this year, the Supervisory Board announced a search procedure for the CEO. On the 27th of August, interviews will be held with the candidates to take up this position.
Ladies and gentlemen, I'd like to go on to reporting the results that the group generated in H1 of this year. If we look at production, so coal production, coke production, and corridor works. I'll give the general figures and later under the second item when we present the operating results of the company, I'll provide you some additional details. In the first six months of the year, our coal production was 6.843 million tons. Our coke production was 1.843 million tons. If we look at corridor works, we have tunneled some 41,698 running meters. In the first six months of this year, our total coal sales were 7.597 million tons and this is an increase over the corresponding period of the previous year by 20.8%.
If we look at our sales revenue in the first half of the year, it was PLN 4.177 billion, and this is an increase of some 22% versus the same corresponding period of last year. If you look at the average price of met coal and coke, we have had a decline of 14.5%. At the average price over that six-month period was PLN 416.86 per ton. If we look at coke, we saw the price moving up. It's up by 21.7% and the price per ton of coke was PLN 1,009.77. The company's EBITDA during the first six months of the year was PLN 339.4 million. In comparison with last year, when we had a negative figure of PLN 86.4 million. This is the six-month period of last year. It's the comparable period.
If we look at the first six months of the year, we have a loss of PLN 330.5 million as opposed to PLN 937.8 million in the last six months of last year. I'll now go on to a presentation of the operating results of JSW. If we look at our coal production, I mentioned that in the first six months, we had 6.8 million tons. Compared to the first six months of last year, this is an increase of 2.6%. If we look at the production mix, roughly 1.3 million tons is steam coal and 5.5 million tons was met coal. If we look at the corridor works in turn as we compare corridor works done in the previous year. We can start actually looking at Q2 one versus Q1. We do have a decline in terms of corridor works done.
It's down 9.2% in Q2 over Q1. If we compare the first six months of this year to the first six months of last year, we do see an increase of tunneling corridor works. It's up some 19.3%. Now I can go on to the mining cash cost. The mining cash cost, if we compare Q2 to Q1, we've seen that the mining cash cost has edged up. If we look at the first six months of this year to the first six months of last year, we can say that the mining cash cost and unit mining cash cost has edged up by 3.6%. It went from PLN 425.99 in the first six months of last year to PLN 441.37 in the first six months of this year.
Ladies and gentlemen, if we look at the inventory of coal produced by JSW as of 30th June of 2021, it was 2.7 million tons. Sorry. On the 30th of June 2020, it was 2.172 million tons, and now it's 1.413 million tons. We've reduced the inventory by some 730,000 tons. If we look then at the production of coke in the first six months of this year, we've produced 1.843 million tons of coke, and this is an increase of 18.6% versus the corresponding period of the previous year. Ladies and gentlemen, our coke plants are working at full capacity. Our capacity utilization ratio is 100%. Last year, our production utilization capacity was 85.4%. That was the utilization factor in the first six months of last year.
If we look at the cash conversion cost, we have seen an increase if we compare Q1 and Q2. This was an increase. If we look at the six-month period, I can remind you that last year in the first six months, it was PLN 287 million, and now it's PLN 302 million almost PLN 303 million. That's the total cash conversion cost. We have the unit cash conversion cost that's come down. If we look at the six months of this year to the first six months of last year, we're down by some 11.1% from PLN 184.97 to the current cash conversion unit cost of PLN 164.37. Ladies and gentlemen, the inventory of coke produced by the JSW Group as of 30 June 2020, we had almost 350,000 tons. Right now, on 30 June of the current year, it's around 146,000 tons.
We've reduced the inventory of coke by roughly 200,000 tons. Ladies and gentlemen, I would thank you for your attention for this point in the presentation. I would like to go on to a discussion of the market trends, and I'd like to ask Sebastian Bartos to go ahead and say a few words about market trends and market environment.
Ladies and gentlemen, before we go through the numbers that we've got displayed on the page, I'd like to say a few words about the market landscape, where the company was last year, in the first half of last year in particular, as well as across the overall year of 2020, and how that compares to what we see this year. As we well remember, last year, 2020, was a very challenging year for JSW.
This was a COVID year, not only in the commodities industry, but also our industry was particularly affected by all of those restrictions. This led to a situation in which many contracts were reduced by our offtakers, and so we had limitations of production of coal and coke in our plants. Many steel customers had to take even more radical steps. Also the competition. The coking segment, they undertook even more radical efforts. Even though it was a very difficult year, we managed to navigate that a little bit differently. One, as a group, we didn't stop production. Even though we didn't have the ability to sell all of the tons, we continued to produce in our mines. Even though there were some difficulties with employees' absenteeism, we continued to do production in the coking segment compared to the competition.
We didn't stop any of the coking batteries. We maintained the ability to fulfill contracts in that difficult period. Right now, those contracts are generating profits for us in the first half of the year, and these outcomes are visible in our results. The economy and the commodities industry have been emerging from the crisis, and actually more quickly than some market participants had anticipated. As JSW, we would like to utilize this period, take advantage to the fullest extent possible. Just like we were able to put things together in the more difficult period of last year, even though we had some trials and tribulations in sales. The coal was utilized in our own coking plants, and we had last-run coke that was sold to overseas markets, to the vibrant markets, and we were able to survive that period.
If we look at the current situation in our ratios, especially in this first half of the year, we have a classic cycle in the steel industry. We have steel coke and then coking coal. This is basically a chain of events that have certain consequences and repercussions. Right now, the market in steel products, well, there's a hunger for steel products. All of the steel mills were trying to reduce their inventories. That's a balance sheet line item that was a burden to them in that difficult COVID year. The needs for these products is the need is big. There's a lot of demand. You can see here with the production of steel that we have an increase of steel production of 14.4% to more than 1 billion tons across the world.
That's more than 1 billion tons of steel produced across the world. This has had an impact on the steel prices. I'd like to mention one other thing about the European market, because it's the natural market for JSW. We have a bigger increase. It's up by more than 18%, where Europe produced some 70 million tons almost 80 million tons of steel. One of the things important, despite that growth, this is a level that's lower than what we saw prior to COVID. It's 7% below from what we saw in 2019. We believe that in Europe there are still some reserves to tap into. This has meant this is the first driver in the commodities industry that's important. We've seen steel prices moving up quite strongly. It's up by 118% in terms of the automobile industry products, so coils.
We also have the long products that have experienced growth. These rods, so the construction industry and things of that nature. The development on this market means that there are certain consequences, and this has led to a situation in which we could benefit from this by raising our prices in the coking segment. As you look at the coking coal prices, they've grown by some 52% for coke on the European market and by almost 54% on the Chinese market. The situation is a little bit different if we look at coking coal prices or met coal prices. A couple words of commentary. In the normal classic value chain, coking coal should reflect these values. In the last two quarters or three quarters, we can see there's one event that's had a major impact.
These are geopolitical decisions where JSW and European players don't have an impact on that. These are restrictions that have been placed on imports from Australia into China, and this has led to lower market prices on the international markets. This is something that started last year, at the end of last year. It's been underway for about half a year. This is not a natural event, nor is it supported by the normal laws of economics, and that's something that can't continue to be in place for a long time. If we look at June, this is where we can say that Australian coal prices have moved up very strongly at the end of June, and this is something that's continuing.
In the first half of this year, as a group, we were not able to benefit from those prices because that's the latter half of June when those prices were bumped up. You can see that the spot prices for coking coal, it's a 3% difference. In sales, it's up some 41%, and this is driven primarily by those events that I just referred to. If we look at the prices of JSW products in relation to market prices, as has been the case in previous results presentations, we're looking at two systems that are in place in JSW, and they're based on benchmark prices. We have the TSI Premium. This is the price from the preceding quarter. We have the Nippon Steel method, and that's the current quarter minus one month.
If you look at Q1 and Q2 of this year, we can see a symbolic growth from $109-$112 per ton for met coal. This is linked to what I mentioned. It wasn't until the latter half of June that we saw substantial growth in coal prices, which will be utilized in subsequent periods. You can see how those two different systems are operating. If we look at the preceding quarter, we had roughly 81% of that value. Under the Nippon Steel, having that type of contractual setup, we were able to achieve some 96%. We were able to fully utilize that market that was in place in the latter half of the quarter. If you look at coke prices, they have a totally different situation for the coke market.
The growth that we're showing you is $335 from the first quarter, then we have $307 in Q2. If we track that against international ratios, well, the absolute figures present here, this is for blast furnace coke, and we're showing you of total coke where we have small fractions, and this is an aggregate price for our coke that comes from all of our coking plants in the group. What I'd like to note here is the trend that has appeared between the first quarter and the second quarter is much more dynamic as compared to the various publications showing what's happening with prices. In our group, we've had much bigger price increases than what the international market saw in these published prices. If we look at steam coal prices, the situation is different. You're very well aware of how those prices work.
We have steam coal prices to the commercial power sector, and these are annual prices that were agreed in November and December of last year. All of the indices that we see now have a very limited impact on the agreed-upon price, because the price we have is an annual price. What's happening now will impact next year's prices. If we go on to coal sales to external customers and internal customers, I'd like to show you one thing that's in line with the JSW's policy. If we compare Q1 and Q2 of this year, we have a decline of 1.5%. This is a small decline, so we can say that the volumes are quite stable. I'd like to draw your attention to the differences between steam and coking coal.
We're selling much more coking coal, we saw a decline in the sales of steam coal. This is the direction that our group is moving in. We want to maximize the share of coking coal because it's higher value, and that's what we want to sell to our customers. We have a similar situation if we look at the first half of last year against this year. We have an increase of nearly 23%. This is the rebound after a difficult COVID year, and you can see the same proportions. We are selling much more coking coal to our customers. We have a smaller increase in the steam coal. If you look at our internal customers, these are our integrated coking plants within the group.
If you look at the differences between Q1 and Q2, we can see that it's down by 1%. Basically, this is a stable or basically flat in terms of the coal we deliver to our own coking plants. If we look at H1 of this year compared to last year, the increase is nearly 17%, and this is a matter of the rebound after the challenging COVID year. If we come back to the revenue to external clients, and if we look at the difference between Q1 and Q2, we have an increase of 2.4%. The growth in average prices is $109- $112. We haven't onboarded the price increase from the latter half of June. That's why the increase uptake is only 2.4%.
If we look at the differences between the first halves of this year and last year, the upswing is 6%. As we continue, if we look at the sales of coke to external clients, the volume that we've sold in Q1 and Q2, it's down by almost 14%. I'd give you a comment about that volume. Generally speaking, our coking segment, and this is what Mr. Prusek said, we're utilizing 100% of our production capacity. We don't have any inventory. The inventory that we have, 146,000 tons, this is an operational inventory level, which is needed to maintain our overseas delivery supplies. We don't really have any excess inventory. This is a matter of the distinct nature of overseas supplies. Some of the cargo was en route, and so some of the invoicing was done in July for deliveries made in June.
That's why we have a decline of almost 14%. Our inventory is not growing. Everything has been sold. If we compare H1 of 2020 with H1 2021, we have an increase of 11%. This is information for you that the Coke segment in the difficult COVID year didn't see a major decline in production. We didn't stop any of the coking batteries. We found alternative markets for our production. We're now tapping into 100% of our production capacity. That's why we've been able to achieve an 11% uptick here. If we come back to the utilization of production capacity in the difficult last year, all of the decisions that were made weren't as drastic as the decisions made by our competition. They have another aspect.
We've shown all of our customers that our group, in a difficult COVID period, was capable of discharging all of its contracts, and JSW showed itself to be a very stable and reliable supplier. This is profiting us now. This is something that I hope will continue to be the case in future periods because we have long-term strategic contracts. We're not a spot supplier to our customers. Coming back to the average coke sales price and the revenue on that, the first quarter versus Q2 of this year, we have an increase of 30% in the average coke sales price. If we compare the first half of this year to the first half of last year, the increase in the price is some 21.7%. We can say we have a blended result of volume increases and price increases.
If we look at revenues on sales of coke and hydrocarbons to external clients, we can see an increase between Q1 and Q2 of 15%. If we compare each one of the two years, we have an increase of more than 41%. That's it from my side, Mr. President.
Thank you very much. Now I'd like to ask Mr. Robert Ostrowski to say a few words about the investments in the JSW Group and to present information concerning select or the financial highlights of the JSW Group. I'll give you the floor now.
Welcome, ladies and gentlemen. Thank you very much, Mr. President. It's my pleasure today to discuss with you and present information about our investments in JSW, the company and the group. This is not something that's allocated to the financial division, but I'll discharge this duty today.
If I look at the corresponding periods that we have in our presentation, we have H1 of this year versus last year. We have a decline on an accrual basis of CapEx. We have an accrual basis and a cash basis. This is the presentation methodology that we've utilized in the past. We can say that we had CapEx of PLN 760 million. Almost PLN 634 million was spent on the Coal segment. Last year, we spent more, PLN 875 million, of which PLN 740 million was for the Coal segment. If we look at Q2 and Q1 of this year, we had CapEx that was higher by 9.5% in Q2 over Q1 of this year. We had almost PLN 324 million spent in the Coke segment in Q2.
We had PLN 310 million in the first quarter on the Coal segment. We have some shifts in the cash basis, usually Q4 in every reporting period has a higher accrual basis cost, whereas on a cash basis, this is something that takes place a little bit later. This is something that's happened in the most recent period, and that's why the CapEx we see here on a cash basis reflect that effect. We spent, on a cash basis, PLN 931 million, so more than on an accrual basis. The Coal segment received PLN 802 million. Last year, in the first half of the year, we spent PLN 1.335 billion, and that's some 30% more than we saw in the previous year.
If we compare Q2 to Q1 on a cash basis, we had in Q1 PLN 487 million and PLN 422 million on the Coal segment, compared to PLN 444 million in total in Q2 and PLN 380 million for the Coal segment in JSW itself. I can tell you a little bit about the split of these expenditures on an accrual basis. If you look at the two six-month periods, we have a decline of 14% on a comparable basis. We're down to PLN 634 million, and we have a difference between the two quarters, Q2 and Q1 of this year. It's up by 4.4%, so it's almost PLN 324 million that we spent in Q2. We also show you the second most important segment in the group, which is the Coke segment, JSW Koks. On an accrual basis in the first half of the year, we had PLN 63 million.
We have an increase of some 50%-odd between the two half years and the second quarter of this year. It was PLN 40 million, and that's 73% more compared to the first quarter. JSW Koks has signed a contract to modernize battery number four in the Przyjaźń coking plant, and it's continuing an investment in Radlin, and that's why we have this progress in the various periods. I think it's worthwhile to make a comment that the pandemic and the financial position in the first half of this year, 2021, have not affected the directions of investments where we're trying to gain access to new layers, new seams of coal. I think it's worth to mention that we continued to invest in recovering methane and the financial position hasn't affected the schedule of these investments.
Basically, we want to maintain the business continuity of production in the various periods. This is what Mr. Prusek said at the beginning, that we have the preparatory works that we do. We're doing that using our own in-house resources. So we've seen progress over the various periods. All of these efforts are being taken to make sure that we have a stable run rate in the company. On average, if we look at the CapEx in the various periods, we can say that the Coal segment accounts for roughly 80%-85% of the CapEx in the group. Let me go on and provide some information about our financial highlights for the JSW Group. In the first half of this year, we had sales revenue of PLN 4.177 billion. This is up 22% over the corresponding period of last year.
We also see progress in Q2 over Q1. We had PLN 2.178 billion, which is more than what we had in Q1 of this year. This has an impact on the financial results. The EBITDA was positive in this first half of the year. It was PLN 340 million without non-recurring. We had some non-recurring events which had an impact. I'll talk about them in a moment. That was a difference of PLN 255 million. We had negative figures last half year. We had a negative result of PLN 86 million EBITDA. After the non-recurring events were incorporated, we had a result of PLN 595 million in the minus. In Q2, we had PLN 227 million as opposed to PLN 113 million in Q1 before incorporating the non-recurring events. We had a net result of a little over PLN 330 million.
It's in the negative, so it's 3x smaller than what we saw in the first half of last year. The various quarters of this year, we see a net loss of PLN 151 million in Q2 and PLN 180 million almost in Q1. Maybe a few words about our working capital. We have a negative figure of PLN 712 million. Current liabilities are financing a portion of our current assets, and this is a result of a decline in current assets by some PLN 450 million. At the same time, we have higher current liabilities, which are up by PLN 356 million. We have an increase in the loan by PLN 68 million, and we have trade payables up, and then we have employment liabilities, which are up by some PLN 55 million in the balance sheet of the JSW Group.
On current assets, we have less cash by PLN 507 million. The inventory has fallen by PLN 180 million. We're up on current receivables by some PLN 286 million. Now I'd like to discuss the factors that have the drivers of EBITDA as we compare the EBITDA in Q2 versus Q1. It's PLN 104 million in Q1, if you look at the Coal segments, volume and prices. This was an increase of some PLN 22 million. It's not very material, but I think it's worthwhile to mention that we have more coke and coal volume of some 5%, and we're down in terms of the steam coal sales by some 16%. We also see that the average met coal price is up by 1.8%, while the average steam coal price has edged downwards by 0.6%.
To a bigger extent, we saw the Coke segment exerting an impact. We have a decrease in the volume by almost 14%, and that means that the EBITDA is negative at PLN 143 million almost. The average Coke sales price is up by some 30%, so that's improved this segment's EBITDA of almost PLN 253 million. That means that the impact of the Coke segment is PLN 85 million+ . We have the impact of other operating income and expenses. What we should recognize here, so we have other operating events. It's PLN 37 million for the sales of other revenues. We had lower revenue on payments and indemnities. We had a big adjustment because of the reversal on the impairment loss, so a difference of PLN 108 million. The other figures were just a few million złotys.
This gives you a total impact of PLN 84.7 million with a negative. Then we have the non-recurring events. There are three important non-recurring events. First is we have a higher impairment for the property, plant, and equipment in Jastrzębie-Bzie, PLN 73 million. Then we have the costs that linked to the SARS-CoV-2 pandemic. This is almost PLN 11 million and a plus. We have a negative figure of releasing provisions for the framework litigation. The total impact improves our EBITDA by PLN 75 million. That's why the EBITDA in Q2, if we take into consideration all these factors, is a little bit under PLN 227 million. Now I'd like to recap and talk about the operating segment's impact on EBITDA in Q2 versus Q1.
I said, the Coal segment had a negative impact of PLN 185 million almost, and this is for the reasons that I mentioned. The Coke segment has a positive impact of almost PLN 278 million. We have some consolidation eliminations. There are two major line items. Impact is PLN -46 million . We have profits not achieved on inventories for contracts within the group for coal and coke. That's when we sell coal to JSW Koks, if that coal isn't converted into coke, then we have an impact. We have cases where JSW buys coke back from the coke company, and then it's sold to external customers. Here we have adjustments to contracts for coke. The impact is PLN 21 million. The second important line item is unrealized. Dividends were excluded. Dividends paid within the group.
The difference is PLN 25 million, had an impact on that consolidation elimination. We have the non-recurring events that I discussed with you previously. If we could go on to the next slide. I want to discuss at the end information about our costs by nature. In the first half of 2021, our costs by nature were PLN 4.7 billion, and that's more by PLN 280 million over the same period of last year. Out of tradition, the split is quite similar. Employment costs represent the biggest bulk, and there's an increase here. We had the pandemic restrictions in 2020, we had some increase in the average headcount in PBSz, and that's because of the number of contracts in that company.
We also have the impact of paying out bonuses to employees because of the celebratory days in JSW Koks. Then we also had higher costs because of higher headcount in the JZR company. We have higher consumption of energy, and this is similar across the periods, but we have to have in mind that there is a visible increase in CO2 prices. In terms of the energy that's purchased as of 1 January 2021, we have the capacity fee for electricity drawn from the external grid. Between the quarters, the differences aren't very big. It's 21 million W. It's bigger in the second quarter of the year. So the split is quite similar across periods, so the differences are just a few million watts, at most 10 million W.
We have external services, we have depreciation and amortization, which is a non-cash expense, and then we have the consumption of materials to do our production. That's about it in terms of the financial and economic information from my side. Thank you for attention.
Thank you very much, Mr. President. Ladies and gentlemen, I'd now like to go on to the Q and A session. We have questions that have been posed by shareholders and analysts. Ladies and gentlemen, I'll read the first question. What is the reason for the growth of CapEx in 2021 from PLN 2 billion at the beginning of the year to PLN 2.6 billion, which was discussed at the most recent conference? What are the plans today, and what possible changes could take place to have your early look to CapEx in 2022?
I'd like to ask Robert Ostrowski to respond to that question.
Thank you very much. Ladies and gentlemen, at the most recent conference, we talked about CapEx plans for the overall group, and that was PLN 2.6 billion. There was also a discussion of CapEx for JSW is PLN 2 billion. There's no correction here, no adjustment, no change. The plan for 2021 in terms of investments for the group and for JSW itself are the same.
The next question. In July, you raised your salaries by 3.8% despite the trade unions' protest, who wanted more. What do your talks look like with the employees? This applied to employees only in JSW. What about the other companies' employees? I'll ask Artur Wojtków to respond to that question.
Ladies and gentlemen, it's true that as of 1 July, the company raised salaries by 3.4% on the basis of a unilateral decision made by the Management Board on the 7th of June. The trade unions asked the Management Board or made a demand to have a higher salary increase, and that was 6%, is what they asked for in terms of the base salary increase. To pay a single compensation because of the COVID, and they wanted PLN 5,000 for underground employees and PLN 3,500 for other employees in the surface. The negotiations were began to discuss those proposals, and in the middle of June, there was a meeting, and the trade union upheld its expectations of having a higher salary increase. The management was to prepare for the next meeting and present its position on possible growth. That meeting didn't take place.
There was a break in the negotiations. This break continues because of perturbations with the Management Board composition as the full management team is being put together. Once the full management team is in place, the meeting will be held and prepared, the position of the Management Board, we'll present that position to the trade unions. If we look at the daughter companies, we've received signals that there are no such expectations in the daughter companies, with the exception of the training company, the trade unions have asked for an increase in the salaries of 3.4%.
Thank you very much. We have the next question. What's the stage and what's the process of delivering social protections to 1,800 employees who've said they want to participate in this program? As they leave, what will the reductions mean? Will this lead to problems in production?
Will this attrition take place over time or at one single point in time? Can the figures be substantially lower after verification? Once again, I'd like to ask Mr. Wojtków to respond to this question.
Ladies and gentlemen, it's true that to transfer employees to the SRK restructuring company, then the law on the functioning of mining sector has to change. That law is currently being discussed in the Parliament, and once it's amended, on the basis of the amended law, we're going to be able to which is Jastrzębie III, we're going to be able to transfer it to this SRK restructuring company. 1,800 people asked for or applied for these mining vacations and asked for one-time payments.
The interest is quite strong, but the previous management team, in response to the proposals of the Directors, had decided what the number of people would be, and the number defined then was 550 persons. 550 people, these are single payments as well as mining vacations. Those applications have been checked, and basically, the management of the various mines are agreeing to that, whether the new management team will allow for more miners to leave the company. We see 550 is the number, and so the difference between 1,800 and 550 is quite substantial. Having 1,800 employees leave the company would be a problem for the company in terms of doing all of its work, especially if we think about the underground employees. We have to be sagacious and wise in terms of making our decisions.
When do we plan to transfer Jastrzębie III mining area to SRK Restructuring Company, assuming that the law is completed? We believe that on the 31st of this October, we could transfer, and that means we would no longer bear the cost of those employees as of the 1st of November in those mines once they're transferred to the SRK Restructuring Company.
Thank you very much. We have the next question. Can we anticipate higher production in the latter half of 2021, or was the production output in the first half of this year, was it up to date? Is it in line with the plan? Were there any geological problems? As a result of higher production of energy, can we anticipate that we're going to have higher production of steam coal in subsequent quarters? I'll try to respond to those questions.
In response to the first question, yes, we can anticipate that in the second half of this year, we'll have higher production output compared to the first half of the year. In the first six months of this year, this was in line with the technical and economic plan of the company, if I remember well. The third part of the question was to verify the updates. We haven't verified our technical and economic plan. I think you mentioned some of the market factors, not geological factors. This update was not made. If I remember correctly, the fourth question was about our production output. We don't anticipate the production mix changing, JSW is following the plan of gradually increasing the percentage of coking coal in the production mix. Thank you very much.
The next question, what's the estimated split of inventory between steam coal and coking coal? If I remember well, the estimated split of inventories, more than 800,000 tons of steam coal and more than 500,000 tons of coking coal. Thank you. We have the next question. How do you see the current demand for coke and coking coal? I'd like to ask Sebastian Bartos to respond to that question.
Ladies and gentlemen, as I respond to that question, I think we can say that we see it positively, and that's something that we've emphasized in our presentation. In terms of hydrocarbons, we have long-term contracts, and this covers 100% of our production. If we look at coking coal and steam coal, our sales opportunities are higher than our current production, and that means that our inventories are gradually falling.
Thank you very much. The next question, what's the current state of discussion about having methane under the ETS system? Do you anticipate a shift to a dynamic market environment? What sort of efforts are being taken to be able to capture more methane, and what's the maximum level of methane capture? I'll try to respond to these questions about methane, in fact. What's the status of our talks? Work is underway in the European Commission, in terms of adding methane to the European trading system for allowances, JSW is tracking the work. We want to utilize methane for economic purposes, we're constantly trying to ramp up our utilization of methane for commercial purposes. We're producing electricity from our own sources. In the first six months of this year, we've been able to generate roughly 75,000 MWh of electricity.
The plan is to generate from methane in our own sources, around 150,000 MWh . If we're successful, this would be an increase of some 50% compared to electricity generation in last year. If we think about the projects and our efforts to capture methane, right now, we're doing work to augment the methane drainage in the rock mass in our mines. Right now, we're able to capture roughly 40%. We'd like to augment that methane drainage to 50%. Other work we're doing, we're doing meticulous analysis on the ability to apply technology to utilize the methane in ventilation air. This is a major challenge. This is caused by the low concentration of methane in ventilation air. In our mines and our ventilation shafts, it usually doesn't exceed 0.5%. I'd also interest you in our activities in methane. Our employees have created a website.
I hope I won't be wrong with the address of the site. It's cmmenergy.eu, and there's a lot of information about that subject. People who are interested, I would send you to that site. The next question, as a result of moving the Jastrzębie section to SRK, what will be the savings for the employee benefits? Sir, I would ask Mr. Wojtków to respond to that question.
Ladies and gentlemen, if on the 31st of October, the transfer is made, this is not something that's happening over a longer or shorter period of time, from day to day. On the 1st of November, these employees would no longer be our employees. The savings for 550 persons who would be utilizing these protections, this would be roughly PLN 14 million. The savings on an annual basis would be in excess of PLN 90 million.
The increase in the number of employees who are utilizing employee safety guards. Basically, if that number of employees is higher, then those numbers would grow.
Thank you very much. What's the production of coal in these assets? What's their production of coking coal and steam coal? What's the split? If I understand this question, I'll try to respond to this question quite briefly. In the Jastrzębie section, we're not actually doing any mining operations. The next question, what's the current schedule for starting mining operations in the Bzie mine? Will the first production appear at the end of 2021? I can say yes, briefly. Those are our plans. The first ton of mined coal will come from the Jastrzębie-Bzie mine by the end of this year. Thank you very much.
The next question, what are the expectations of the management team in terms of coal production in the medium and long term? Can we anticipate that the run rate would stay at 15 million tons? Does the current management team plan to ramp this up to 17 million tons? Would the problems that you're encountering reduce the taper off these figures? I'll try to respond to these several questions. I can say that the current management team is doing work at its utmost to achieve the run rate this year, as in the technical and economic plan. I'm convinced that in the medium and long term, the new management team fully brought together will make the decision. The question is about the mining conditions and their impact on production over a longer period of time.
Well, ladies and gentlemen, the conditions and the mining problems, and I'd like to add, the geological conditions are always a challenge for us. It's certainly the case if these problems appear, well, they can exert an impact on the run rate, on the production volumes. The company is doing its utmost, and I'm convinced it will continue to do its utmost to ensure that the negative impact either posed by mining problems or geological problems, but it will do its best to mitigate those problems in terms of the impact on the run rate. Ladies and gentlemen, does the company consider a change in the benchmark from Australia to the U.S. with the customers of JSW? Would they be willing to have a switch in the contractual base because of the high prices for steel and coking coal?
I'd like to ask Mr. Bartos to respond to that question.
Ladies and gentlemen, we as JSW analyze all ratios, not only in the short term, but also over many, many years. As I respond to this question, I can say the following. Today, we don't intend to make that decision, there's several facts and aspects for why we're not going to do that. JSW sells coal on the basis of long-term contracts. These are stable contracts which have specific price mechanisms, price setting mechanisms. We've done an analysis for the last 10 years looking at Australian and U.S. coal. Australian coal has always been priced higher because of higher quality, that's something that's been beneficial to JSW.
The distortions we've seen in the last two quarters or the last few months are caused by an event of a geopolitical nature, which is not natural. The ban on imports from Australia into China. The situation, after several months, is now normalizing. There is a figure, the difference of $40 between U.S. coal and Australian coal. That difference is no longer current. Over the last five-six months, the differences were even as high as $100. We as JSW and many market participants discuss that subject matter. This is not a natural price difference, and it's not something that can persist for a long period of time. If you look at the current coal prices from Australian mines and U.S. mines, the difference is $25. Normalization is something that's continuing here. Please have in mind the following fact.
The increase that transpired for Australian coal since the latter half of June, that upswing in Australian coal prices is continuing. This is because of restrictions and the ban on imports from Australia into China. As a result, we today are not considering that decision. The priority and the philosophy of JSW is to continue cultivating our long-term relations with our customers. We have contracts, and we intend to live up to those contracts.
Thank you very much. We're now observing strong growth in steel price and external prices are also growing. JSW needs quite a bit of steel and external services. What will be the negative impact of these two figures on the results of 2021, having in mind that we'll see the full negative impact of these two factors? Does JSW plan to hedge steel prices?
I'd like to ask Robert Ostrowski to respond to the question.
Ladies and gentlemen, we've not seen any major impact of these factors on how our costs are fleshing out. We have contracts with our suppliers, so the contracts were entered into in prior months. We don't see how the current situation in terms of services and steel prices will affect costs in the subsequent period. I can confirm that we do not hedge steel prices.
Thank you very much. We have the next question. According to the company, how much longer will coking coal prices stay where they are? Are we talking about one or two quarters? Does the company anticipate that these prices will stay at this level for a longer period of time, and if so, why? I'd like to ask Sebastian Bartos to respond to this question.
Ladies and gentlemen, JSW doesn't publish forecasts, and we don't talk about forward-looking periods. Our sales follow the international market and the quotations we see. We utilize the services of expert forecasts dedicated to JSW, but we as a production company, we don't produce or publish such forecasts.
Does the management board uphold its position that it won't buy the Halemba mine and the Wierzchowice mine? I can only say that the management team is not involved in any discussions on that subject.
Thank you very much. Could the management explain the adjustment of the consolidation adjustment? Why is it such a high amount, and will it be reversed in Q3 of this year? I'd like to ask Robert Ostrowski to respond to the question.
Ladies and gentlemen, during the presentation, I discussed this issue. I can remind you there are two major items.
Unrealized profits on inventories on coking, on coal and coke, this is because of contracts within the group. Those were unrealized profits to internal buyers. We have a second item of PLN 25 million. This is because of dividends that were paid based on the shareholder meeting decisions in the first half of the year. Thank you.
Okay. Thank you. Despite the dynamic growth of coking coal price and coke prices, you're selling products below the cost of production. Please respond to that information and what is the current sales price? I would ask Sebastian Bartos to respond to the question.
Responding to that question, coking coal is quoted according to two different systems, we presented that today. We have official published benchmarks for Australian coal, it's very clear.
All price increases, especially after the first half of the year, what came at the end of June, this is how those contracts are being performed. In terms of coke, I think we can say clearly from the beginning of the year, the sales of coke is done quarter on quarter with sales price increases. We have a high margin, positive margin. It's not possible for us to state the prices because we have confidential conditions. We have the average sales price stated in today's presentation.
The final question, at what prices will JSW sell its products in Q3? Once again, I'd like to ask Sebastian Bartos to respond to that question.
As JSW, we publish results for Q2. That's the subject of today's conference. We'll be able to respond to that question at the next conference after Q3 comes to an end.
I'd like to thank everybody who have sent in their questions to the company. If in the meantime, you're going to have additional questions, then the responses to the questions will be given by our investor relations department. Ladies and gentlemen, I'd like to thank all of you very cordially for your participation in today's earnings conference. I'd like to thank all of the employees of the JSW Group for their work and commitment, and I'd like to thank all of you who've contributed to organizing today's conference. I'd like to thank my vice presidents, and thank you very much for your participation