From you cordially to the Results Conference of JSW. This is a conference to recap our activities in 2024. Before we go on to the presentation of the results, I would like to allow myself to identify the most important factors that contributed to these data. There's no doubt that there was a major impact exerted by the sharp decline in prices on the global market, and certainly Madame Gruszka will say a few words about that when she discusses the results. Another thing that influenced these figures in terms of the operational results was the events of chance. Basically, the prisoning of some equipment as a result of events, we also have the relatively inflexible cost base. We also should say that the PLN 6.3 billion impairment loss had the biggest impact.
We, as a management team, made the decision to take this impairment after looking at the results and after having done impairment tests, were convinced that this decision will make sure that the data being presented are fully transparent. Our reaction to this situation was to prepare and implement, on an unwavering basis, a transformation plan. Today, during today's presentation, we'd like to briefly share with you the results of the implementation of this plan. The company continues to pursue strategic investments in terms of modernization of the coal preparation plants, deepening the shaft at the Pniówek mine, and we are also expanding the air conditioning system at the Budryk mine. We are also making sure that we're going to be able to continue operations in the future.
We have submitted an application to have an exploration license at the Dębieńsko deposit, and we'd also like to extend our mining concession in the Borynia mine. That would be more or less it in terms of my introductory remarks. We'd like to go ahead and share with you JSW Group in numbers. We can talk about the production of coal in 2024 was 12.25 million tons in coal production. We were over the 3 million tons watermark. We had 22.8 active long walls. Our MCC is up to above PLN 800 per ton. Our sales revenues, having in mind the decline in prices, fell to PLN 11.325 billion. The average price of coke and coal was down to PLN 899, so down by 20%. In coke, it was down to PLN 1,302 per ton.
If we look at EBITDA, this is the adjusted EBITDA, so net of non-recurring events and talking about the impairment loss that I referred to. It was positive at PLN 396 million, but the total result after incorporating these non-recurring events, it was a negative result of PLN 7.28 billion in terms of the net result. I'd like to ask Mr. Rozmus to discuss our strategic efforts. He is responsible for development in the company. Thank you very much.
Ladies and gentlemen, we have this slide entitled JSW Strategic Objectives based on the strategy for the group over the period from 2022 to 2030. The first thing, the EBITDA margin, as the CEO, Mr. Janta, said, is negative at 57.4%. Of course, what's important here is that this incorporates the impairment loss.
If we look at the stable funding structure, it declined from 0.94 to 0.74. This incorporates the investments in the closed-end investment fund. We have the ability to utilize these funds. This is something that we've been reporting through current reports on a transparent basis. The next thing is the effective or efficient JSW Group. Unfortunately, we were not able to achieve the MCC and the CCC targets, having in mind the high increase in prices of materials, employee benefits, and services, as well as the lower production volume, the run rate. If we look at safe JSW, we had an accident ratio, LTIFR. It was lower than it was in the previous year. This is something that's positive. Of course, the ideal solution would be to reach zero.
If we look at reducing JSW Group's carbon footprint, 0.8% compared to 2023. Based on our decisions and through our actions, we want it to be down by 30% compared to where it was at 2018. The next slide is about revenue diversification. Here, we should say that the goal is being achieved to achieve certain targets, having in mind certain market trends. If we look at product diversification, the sales of products unrelated to core business, we are above the 10% figure in total. If we talk about securing a coal resource base, here we have our key development investments referenced by the CEO in terms of gaining access to new deposits and the mining levels. This is very important in terms of the continuity and the stability of our company to function in the future.
In 2024, in terms of the resource base, we had capital expenditures of PLN 634 million in 2024. The next important factor is product quality. We have certain efforts being taken to produce coke and coal as well as coke that would have stable and desirable qualitative factors. This applies to coke and coal and coke. We are able to deliver our customers high-quality coke and coal products and coke products. This is totally in line with our strategy. If we look at coal and coke production here, we have to say, unfortunately, we were not able to achieve our targets. We will talk about that during the production section. If we talk about reaching a coke and coal figure above 90% starting in the output, starting from 2026 and 2024, we can say that the percentage of coke and coal in total output was 81%.
We're making some investments in the coal preparation plants. We should be able to achieve the target mix of 90%. The next slide references our ESG activities. In terms of the environment, we've made a number of investments for environmental efforts, both in JSW Group and JSW Koks. We had spent more than PLN 250 million alone in JSW Koks. If we talk about our social responsibility, we had occupational health and safety. We had expenditures for that of PLN 1.6 billion. We have a high level of CapEx in this area. In 2024, we had PLN 50 million more spent than in the previous year. We're also participating actively in the local community's life. That's why we provide assistance, educational assistance to students. We are also giving awards to the most talented and gifted pupils.
We awarded some 900 scientific scholarships. We have a program of JSW for children. We have another two orphanages under our tutelage. We have five orphanages now that we're caring for. We have been involved in seven different goals. We have good quality education, access to energy, fair pay, and other activities in the field of the climate. If we talk about corporate governance, we received the grand prize for having the best annual report. This shows that we're one of the leading companies in this area. We have coal, which is a platform, an educational platform. This shows how important it is to talk about coke and coal and coke in the process of manufacturing steel. We have ESG reporting.
For the first time, we have presented our sustainability report in line with the SRS EU reporting standards. All of the management board members and supervisory board members of our companies have been trained on this field. If we look at the operating results of the JSW Group here, if we talk about coal production in 2024, output was down by more than 9% and a few contributing factors. It took place at the turn of 2023 and 2024. At Pniówek and Budryk, we had certain events. These events compelled us to remodel basically the mining faces. When you talk about the number of active long walls, we have a similar number, but this is not something you can't say each long wall is the same because there are different geological and mining conditions.
Since we had to remodel that in 2024, we had totally different parameters of the mining walls, mining long walls than we had originally anticipated for that year. We have to do corridor works as well. That's why we maintain a high level of corridor works, which are enabling us to prepare active long walls and preparing new areas, new levels. Coke production was down as a result of lower production, but also the production was down at our coke plants by some 8.6%. Thank you very much for your attention.
Ladies and gentlemen, let me go ahead and give you a short recap about sales. With respect to the market context, we'll start with some of the market trends according to what the Global Steel Association says.
It was 1.8 billion tons of steel, and basically it was down by 0.8% if we look at global steel production in 2024 versus 2023. A large portion of that was production in steel. The production was down by 1.7% in the EU. Steel production in 2024 was up by 2.6%. This came in at 129.5 million tons. If we look at it, it was 43.2 million tons outside the EU. Compared to the previous year, it was up by some 3.4%. Even though there was a slight increase in 2024 in terms of steel production in the European Union, it was still lower than in previous years up until 2021. It is down by some 15% compared to 2021 and prior to that. It is more than 5% down from 2022.
What's worth noting, we can say that the amount of tension on the steel trading market is much higher. The export from China is above 100 million tons. This is the second highest level in history. Exports from China to Europe are up by 9%. The Asian countries are the primary purchasing countries. We have inexpensive steel from other Asian countries that's coming to Europe. Basically, this has an impact on the steel prices in Europe. We can see that the steel prices of HRC are down by 12%, whereas for rods, the prices are down by 4% versus the previous year. If we look at the coke and coal market in 2024, we can say we did not see any disruptions that would affect the supply. We have seen stability of supply.
If we look at the Australian coke and coal prices of the top quality, it was $240 per ton. This is premium low volatility. We're talking about the price in the Australian ports. It is down by almost 19% versus the previous year. We've seen a decrease in prices that the CEO mentioned from $308 per ton in the first quarter to $202 in the fourth quarter. If we look at the average semi-soft prices, it was $144 per ton, and it was down by 25.8% versus the average in 2023. Once again, if we compare the two quarters, in Q1, semi-soft was $150, and it was $137 in the fourth quarter. It is also worth noting that the average relationship between prices of semi-soft and the premium hard coal quality was down substantially by some 9%. The difference was much lower previously.
If we look at coke prices and the Chinese coke prices, it's 18.3% lower than in 2023. The European market price decline was 9.3% from 2023 to 2024. What's worth mentioning here, according to the coal market survey, the coke trading market was around 34 million tons compared to 27 million in 2023. Even though there was stable use, we can say there was a general trend over the last 10 years of an increase. We should remember that this increase happens when we have a lot of shortages of production of coke in many countries because of the costs of rebuilding coking plants, so refurbishing coking plants. At the same time, on the global market, we've talked about destabilization. We have the intensive development of the Indonesian coking market, and they're using Chinese technology and capital.
They are the third largest exporter of coke in the world, following China and Poland. When we talk about Poland, which is the second largest coke exporter, we should add a couple of words about our domestic market. In Poland, we have 8.8 million tons of production capacity, but we can only use 2 million tons in the domestic coking markets. The rest goes to exports. We had 7.5 million tons produced last year. What's important, if we look at the balance of coke, it clearly shows that the survival of the coking industry in Poland means that we have to export at least 6 million tons per year. On the next slide, we're going to go ahead and show you the volatility of global coking coal and coke. We have very specific comments about major changes on the marketplace.
If I recap, we can say that the situation in the steel market with low margins means that the steel producers need to find savings. That is why they are working on very low inventories. The market is frequently thinking about how low prices can go. We can also mention that the relationship between these prices has been distorted. Oftentimes, we can say that coal purchases were scaled back in order to purchase coke. You can see on this graph that sometimes coke was less expensive than the top premium quality coking coal grades. If we look at item eight, we can say that even though there were some fires and a lack of supply, this did not lead to lower coal prices.
As part of my summary on the next slide, we can show you some of the target countries for JSW Group's products in 2024. If we look at coking coal, we were primarily exporting to European countries, whereas coke we're selling basically overseas. If we look at the target countries, we have 61% of our revenue coming from the domestic market and 2% from outside of the EU, and the rest coming from the EU. If we look at the coke segment in the level of revenue, less than 21% is from the domestic market and nearly 35% from the overseas markets, and the rest coming from the European Union or from Europe. We can say that the situation on the global market and what might happen in Ukraine.
It is a matter of commentary in terms of what Rozmus was saying, that we are following the strategy in terms of what is going to happen there in terms of the overseas markets. Now, if I go on to the relationship between the prices of JSW Group and the market prices. Basically, we have this range of prices, different indices. We have long-term contracts above all that feed into our base. If we look at the benchmark price versus our price, and we track this on a quarterly basis, we should remember that the reference price, we have the premium quality grades of coal, but the volatility depends on the mix of production and the sales mix in a given quarter. We have a separate assessment of the price for each batch of products depending on the quality.
If we look at what's happening for PLV prices, there's a lot of volatility. We tried, of course, to average that out over the periods. If you look at the blast furnace coke price versus JSW's price, this includes also the fine grade, so it's 78%. That was the differential. It's harder to benchmark coke prices than it is to talk about coking coal because there's differences in terms of markets and industries. If you look at the previous quarter, we can take into consideration that more and more of the coke price is being set during the quarter as opposed to based on these quarterly benchmarks. We have seen some changes in terms of what's happening with blast furnace coke in Europe and Asia. At the end of last year, we saw some additional differentiation.
This has a direct impact on the average price that JSW has been able to command. As we've shown you on the previous slides, we have to compete with Asian-made coke. The latter half of 2024 also saw an oversupply, a glut, if you will, of the finer grade cokes and the blast furnace cokes. This also had an impact on the relationship between JSW's prices and these prices for coke on the global market. If we look at the steam coal price, we can say that on the domestic market, these prices continue to fall. You can look at the index, which is called PSCMI. In Q4, the relationship is 89%. This is based on the mix of contracts that are being performed as well as the new supplies.
We can say that the prices of the new deliveries are lower than the previous deliveries. The next slide basically sums up what happened with sales. The sales of coal to external customers, this was up by 9.8% from Q3 to Q4, but for the whole year, it was down by 15%. We can say that on a year-on-year basis, we were down by 10%, and sales of steam coal were down by some 28%. As we've talked previously, the market conditions mean that we weren't able to cover for these declines in prices by making up with production. The average selling price of coal to external customers was 13%, and it was down by 9%. If we look at the full year figures, it was down by 20% and 35.3%.
That means we had a decline of 4.7% and a total of some 33% decline. We can go ahead and look at what's happened with coke in Q4 of the previous quarter. It's 740,000 tons. It was up by 0.5%, but for the full year, it was down by 2.9%, almost 3% in the sales of coke. The price movement from Q3 to Q4 was downwards at 13.2%. The same was true for the full year. Basically, the revenue was down by nearly 12% from Q3 to Q4, and for the full year, it was down by some 17%. We have this slide in terms of the inventories of coal and coke. We have our inventory up to 1.4 million tons, of which 806 is steam coal.
The rest is coking coal, having in mind the technology inventory that we have in the group. This was primarily a result of rebuilding our technology reserve because each coking plant has to have a certain level of inventory in terms of quantity as well as the mix to blend coal for coke purposes. We also have what Mr. Rozmus said in the first half of the year. In particular, we had those events, and that means that our buyers had to secure some product from alternative suppliers. We were not able to have an increase in sales as we increased inventory in the second half of the year. As a matter of timing, that means it took place at the same time when at the end of the year, our buyers, our customers wanted to reduce their inventories.
That is why we had an increase in our inventory. If we look at coke inventory, we have a low level, which is just necessary to continue delivering sales, especially having in mind our activity on the overseas markets. Thank you very much for your attention. Thank you very much. We can talk about the investments made by the JSW Group. In 2024, our CapEx were down by PLN 205 million. I'll discuss this in detail. In the coal segment, where we have investment construction, where we have the mining pits, also the coal preparation plants and other investments, and we also have the purchase of ready-made goods, some modernizing mechanized shields, improvement of transportation equipment, as well as other purchases.
If we look at this slide, the trend that was started in 2020-2024 and the analysis that we're doing in terms of what's going to happen in the future and the necessity to invest in new mining pits, and at the same time, the ability to utilize equipment in different mines. We've diagnosed this in 2024. This is something that we want to intensify very strongly in the current year. If you look at the coke segment, in JSW Koks, we can see a major decline of nearly PLN 140 million in terms of our CapEx there. We continue big investments in terms of modernizing coking battery number four at the Pragów coking plant. The other investments and the construction of the Radlin power generation unit, we're waiting for certain decisions to be made here. Thank you very much. That's where we stand.
Good morning, ladies and gentlemen. We're closing up the year. I would like to present to you the most important financial highlights for the JSW Group. Before I begin, I would like to give a bit of commentary or remark in terms of the most important factor that's affected our EBITDA and the financial result. As the CEO, Mr. Janta, said, we have the impairment loss of the non-current assets of the group. As you certainly know, we are obligated, having in mind the adherence to international financial reporting standards under number 36. Once a quarter, we have to check to see whether or not there are reasons for us to run impairment tests.
After less than two months after taking over the role of managing JSW, based on the information we've received from the Financial Department, basically these prerequisites have been met. We have external and internal prerequisites. Of course, prices fell quite strongly. That was an external factor. Then we have an increase in costs internally. We performed these impairment tests. This valuation enables us to respond to the question whether or not we have the right values of these assets in the balance sheet. We're not able to look at offers from potential buyers. We're not able to track, say, fair value. We do an analysis based on information from entities in our industry using the discounted cash flow methodology. We're trying to ascertain whether or not our individual mines are able to generate cash and how much that cash is worth.
Unfortunately, after performing this research, and this is a type of an opening balance as we took over the company, we needed to adjust the value of non-current assets by some PLN 6.4 billion. The prerequisites for doing those impairment tests were in place, according to some, at Q4 2023, because the decline in prices of coal was around 25%, and for coke, it was 30%. Having in mind an inflexible cost base, of course, this is something that's debatable. In any case, we did this impairment at Q2 2024, and that's when we did the impairment tests. That's why we had to incorporate that in the results. The PLN 6.4 billion has an impact on the EBITDA and the net result. Now let me go ahead and talk about specific parameters with respect to sales revenue.
In 2024, we have a decrease of more than 26% to PLN 11,325,800,000. We will talk about some of the conditions that contributed to that. EBITDA net of non-recurring events was PLN 396 million. If we incorporate the impairment losses that were taken on 30 June 2024 of PLN 6.89 billion, that is the total for the net or non-recurring events. The outcome means that the net result was negative at PLN 7.28 billion. Having regard, of course, for the information that I have presented, we could say that this picture is painted a little bit differently if we incorporate the information about impairment losses. Let's talk about the major driving factors for JSW. What we see is a decline of revenue from PLN 15.3, almost 15.4 billion in 2023 to PLN 11.326 billion in 2024.
If we look at the bridge, there's not a single factor that would have exerted a positive impact. The negative impact is what happened with the sales price. With an average price of PLN 890 as opposed to PLN 1,000 and some odd. The volume of coking coal sales is down by some 10% year on year. We had the average price of sales coal, average sales price of coke. It's down by 13.2%, the price for coke. We also had a lower volume of steam coal sales, so it's down by 28%. This gave an impact of PLN 547 million. We had the impact of other products, byproducts. This is the impact of everything from other sales, which was PLN 266 million less. We had the volume of coke sales, which is down by 2.9%.
The impact in financial terms was PLN 142.2 million. That means that every single factor contributed negatively and reduced the total revenue from PLN 15.3 billion to PLN 11.3 billion. What was happening with costs in this period? Maybe let me say a couple of words about costs. 2024 is the first year over the last four years when costs were stopped or frozen at their level. In fact, they even fell a little bit. I would encourage you to analyze the financial statements from previous years. We can say that the costs moved up from PLN 9 billion to PLN 16 billion, so some 80% up over that period of four years. We have a positive mindset in terms of having stopped this growth in costs.
You can see that on the bridge, more precisely on the next slide, what has helped us in this period in terms of reducing costs. We are down by PLN 114 million in terms of employee benefits. That is a difference of 1.5%. We have some PLN 102 million at JSW. We have used or consumed fewer materials, so that is a decline of 3.5% compared to the previous year. We also have a lower depreciation and amortization cost, so it is PLN 31.3 million. The external services, this is something we are still working on. There was an increase. We are going to react to that. As Mr. Rozmus said, we have to rebuild, of course, and make sure that we have mining walls where we can mine.
That means we're not able to do all of the external services or all of the work ourselves. That's why we need external services to continue preparing the future of the company. We have other costs by nature. They increased by PLN 35.2 million. Overall, the costs are down from PLN 15.8 billion to PLN 15.7 billion. If we think about the major parameters we track for coke production and coking coal production, we have mining cash cost as well as the cash conversion cost. Unfortunately, both of these measures increased between 2023 and 2024. Starting with mining cash cost, it's up by 14.8%. The major factor contributing to this was the volume of production. If we look at the coke side, our status quo was maintained. We have a price between $315 and $317 in the two years.
Then we had the volume impact. The mining cash cost was PLN 804. We had the increase because of expenses of 31 and increase because of volume of 71.8. The unit cash conversion cost, we had the impact of volume, which is negative 29.71, but the cost reduction gave us a decrease of the unit cash conversion cost at PLN 27.63 per ton. The next slide gives you a more detailed breakdown of the mining cash cost and what are the individual contributing factors. I do not think we need to look at that more in greater detail. The same is true of the cash conversion cost. You see the breakdown into the individual elements, what is happening with energy consumption, materials, external services, employee benefits, taxes and charges, other costs by nature, administrative fees. The volume impact gate was negative.
Maybe a couple of words of commentary here. Our coke plants aren't utilizing 100% of their capacity. This is something that's a little inconvenient. We need to track this. It's useful to produce more than what you're selling, but we have to make sure that liquidity is properly tracked. We have to continue basically tracking our contracts to make sure the volume is closer to that as opposed to producing to put in the warehouse. You can see clearly on the bridge about EBITDA that the volume impact, the price impact in terms of cash. This was the biggest impact, of course, on EBITDA. The PLN 6 billion was basically the impairment loss. I already talked about that impairment loss previously. We had the impact of what was happening in terms of coke.
Then we have other PLN 602 million because the impact of coke sales volume and price was PLN 683 million. We had a negative of depreciation amortization cost of PLN 31.3 million. At the end of the day, our EBITDA, which was PLN 4.5559 billion in 2023, we end up in 2024 with PLN 396 million. This is after we are net of non-recurring events. Otherwise, it is PLN 6.5 billion if we talk about including the non-recurring events. If we look at the impact of operating segments on what has happened with EBITDA, we have a negative impact in the coke segment and the coal segment, unfortunately, just as in previous years. If the coal segment was not helping us in the past, the company could count on the coke segment and sometimes opposite, vice versa.
Here we have a situation in which both segments have a negative impact on our EBITDA performance. As I said, the outcome, the final EBITDA net of non-recurring events was PLN 396 million. Let's go ahead and talk at our net working capital. We have the FIZ, which is the closed-end investment fund. We have the stabilization fund that's shown here on the right side. Basically, we have the negative operating results. At the end of 2024, maybe a few words about the consolidated results. The investment fund itself is presented separately in terms of non-current assets and the gross amount. In the short term, we have current liabilities. This is a result of certain transactions, sell buyback. Let's work through this directly. What's happened with net working capital? We have inventories of PLN 1.196 billion.
We have trade and other receivables of PLN 1.3 billion. We have income tax overpaid by almost PLN 22 million. We have cash and cash equivalents of PLN 885 million. We have the closed investment fund of PLN 3.9 billion. Other current assets of PLN 12.1 million. We have loans and borrowings that have been paid down. We paid down the PFR loan, for example, as well as other loans that were paid down, PLN 362 million. Employee benefit liabilities, PLN 304 million. This is a result of the final one-off bonuses. We have lease liabilities, PLN 273 million. We have trade and other liabilities at PLN 3.654 billion, almost. We have current provisions, PLN 285 million, and other current liabilities of PLN 25.2 million.
If we look at the management accounts, it's not necessarily accounting approach because the investment fund is in the balance sheet and it's treated as a matter of non-current assets. Here we're treating it as funds that are available for running the business. You've got information on an ongoing basis being published, disclosed through our current reports. All of that's available. Basically, you have current information, the maximum inertia is 30 days. The networking capital of the group is PLN 2.5 billion at the end of 2024. The last slide in my portion of the presentation is cash flows for the group. If we look at cash flows at the end of 2024, we had PLN 2.4 billion. We're ending up 2024, we have PLN 885 million. That's cash at the end of the year.
The biggest impact of cash flows was based on sales revenue, and it was a negative impact of PLN 1.9 billion. We have the investment flows, so it's PLN 3.8 billion. The net investments in the investment funds, around PLN 2 billion, where we're redeeming participation units. We had the depreciation amortization was PLN 1.698 billion. We had change in inventories PLN 24.7 million. The trade and other receivables, so that fell by PLN 413 million. We have change in trade and other liabilities. We're working on our liquidity. We're trying to extend the payment terms, making sure the liquidity of the company is upheld. If we look at other operating cash flows, PLN 450 million negative. We already talked about the investment cash flows of PLN 1.8 billion. We have loans and borrowings received, which is PLN 1.075 billion.
We have repayment of loans and borrowings, so the PFR loan of PLN 355 million. We have other financing cash flows and FX differences. It was PLN 335 million. At the end of the day, we come out with the amount of cash we had at the end of 2024. It is PLN 885 million. Thank you very much.
Thank you very much. Ladies and gentlemen, as I said at the outset, we want to say a few words about our strategic transformation plan as well as the initial benefits. When we talk about this to be succinct, what are we working on? We are looking at those things where we have an impact. On the revenue side, it is primarily the coal mining volume where we can influence this.
We're working at the mines because we don't have any impact over market prices. We want to maintain our revenue primarily by breaking through that negative trend where output has been falling. There are certain efficiency-related initiatives that we're doing. On the cost side, we're primarily focusing on variable costs. This is primarily the purchasing of external services and materials. We can have an impact, indirect impact on depreciation and amortization through our investment activities. This is about future periods, of course. On the next slide, we have shown you on this graph all of the areas that fall within our purview. We're focusing primarily on three areas. These are purchasing processes, optimizing investments, and also the effective mine area. The first results that we've been able to achieve, we've been able to reduce inefficient capital expenditures by PLN 1.2 billion.
This is correction of investments. If we look at savings in procurement area up until 2024, the end of 2024, we started to implement this plan at the end of the year. We have savings of around PLN 80 million in the second half of the year. We have added in January and February of this year another PLN 152 million. The most important thing to us is increasing output. We want to reverse that negative trend. We have some 18 initiatives. I am not sure if you want to say anything about those initiatives. Yes, of course, having in mind how important this is in the transformation plan. Our diagnosis that we prepared last year means that we know what we need to change in terms of our direct production when implementing good solutions amongst the mines in JSW.
If we look at the mining sector, not just in Poland, but abroad, we basically see that the injury is creating, force us to take these efforts. We are thinking about the optimized time of using machines for production. We have downtime, not just because of breakdowns, but also machines not being well-suited to the mining conditions. We are going deeper and deeper. We are in Budryk, which is the deepest hard coal mine in Europe. These are totally different conditions than we had 15, 20 years ago. We have experts, specialists who can choose the right equipment to be utilized so deep underground. We are thinking about the use of this machine. We have to have awareness amongst our employees in terms of where we are using equipment on the various sections within mines.
We want to utilize the solutions that are out there. We want to combine planning with preparation and mining. In order to cut up a long wall, there are a number of things that you have to do. We talk about the level of basically the seam as well as the parceling. At the end of the day, we need to know exactly what the wall face is going to look like, the long wall face is going to look like. We want to improve the climate. As we go down lower, the climate conditions change. This means we have to take efforts in order to cool the atmosphere, which basically means to do air conditioning. This is one of the things that we're working on.
The next issue is shortening the time it takes for miners to get to the mine faces. We have a diagnosis. The process has begun. We're working on it. All of this in 2025 should enable us to increase our production volumes by 1.3 million tons. These are specific figures we're declaring. It's a tough process. It's a time-consuming process. I'd like to thank all of the people who are involved in that. This will be successful, provided that the entire staff of JSW and the JSW Group are going to be pulling in the same direction. We see the goals. The goals are ambitious, but realistic. If we talk about the measurable impacts, we'll talk about that during our subsequent conferences. Thank you very much.
I think what's worthy of being emphasized is that on top of the financial impact, where we're counting on that, especially in our current situation, the implementation of this strategic transformation plan will give the company a long-term change in the organization, which will poise it to grow in the future. This is everything that we've prepared for you today as part of the presentation. Thank you for your attention. Now, we'd like to move on to the question and answer session. I invite you to post questions at this time. I'll read out the first question.
Does the management confirm that the application for a license to take the deposit in Dębieńsko was properly submitted in March of 2025? Does the management know if some other company has submitted an application?
We're talking about a concession, basically to do exploration at Dębieńsko 1.
This topic for many, many years has been at the tips of people's tongues, and the Ministry of Climate and Environment has been working on that in February of this year. We were working in the previous tendering procedure, and there was a company that submitted a complaint against us in the previous round. That was in February of this year. In February of this year, the ministry mentioned that people could submit applications for concessions for additional exploration. We submitted an application. All interested parties have a 90-day deadline. Having a quick calculation, this means we have time up until the end of May. We've submitted our application very quickly, and I think we have a lot of strengths for our application to be positively reviewed or examined.
After the elapse of this 90-day period, the concession authorities will assess the ability of specific businesses or mining enterprises to do the exploration and then their capability to do the mining itself. I think that if we look at all three of those factors, we have a much better position to actually go ahead and be the target miner. The ministry is not informing about what's happening on its own websites, but we understand that at present, one other competitor has submitted an application, and the same region we're interested in is within their range of interest. I think that's about it.
Thank you very much. The next question.
What's happening if we talk about increasing the percentage of work done by underground shears? When should we anticipate seeing the first tangible effects?
Can we get this on a quarterly basis combined with the KPIs of the company so that the time of work of these underground shears?
If we talk about all of the other equipment that we're utilizing, longwall shears and things like that, we're in the process of strategic transformation. We have a parameter that the utilization of machines and equipment to do benefits. That's why one idea is that we want to increase the amount we're actually utilizing this type of automated mining equipment. We talked a lot about having an effective mine. It's a little too early to talk about the tangible benefits in terms of specific percentages and quantums. We're piloting this subject, but I don't want to speak prematurely about the impacts. Thank you very much. The next question.
What sort of volume is planned for the second, third, and fourth quarters of 2025?
Again, it's me as somebody who's responsible for the operational or technical details. Generally speaking, we do not publish our forecasts on mining output or run rate, but as we rebuild our mine faces in Budryk and Pniówek, having in mind what's happened at Ściełowice and so on and so forth, we need to undertake specific measures at a good point in time. We have been able to rebuild our longwall mine faces. I'd like to declare that in each quarter, each quarter will be higher than the previous quarter. This is where I'd like to stop my response. Thank you very much. The next question.
Does the management board want to revise its run rate plans for 2025, having in fact the previous target of 14.5 million?
I see you're dominating today.
The goal of 14.5 million tons of coking coal was announced for 2026. I believe that a number of the activities were taken under the strategic transformation planned and through our operational activities, we're going to be able to achieve that target, even though we had some elements that took place at the extraordinary events at Ściełowice in January of this year. The next question.
In the first year of the transformation plan, you assume that you'll have revenue of PLN 1.33 billion from the effective mine. What was the average annual coking coal price that's used in PLN or in dollars? What sort of exchange rate do you assume for this year?
We've been working on forecasts that were in place and price paths that were in place in the latter half of the year.
We have not made a revision of the strategic transformation plan. Thank you very much.
Is the PLN 8.5 billion of positive financial effects from the strategic transformation plan with a perspective of 2027, or do you think that figure is still a current figure?
As I said, we've not revised the underlying assumptions for the transformation plan, but if we do something, if we change something or revise something, we'll let you know through the current reports.
Does the management concur with my computations, having in mind the current cash burn so that you'll run out of cash at the turn of Q3-Q4 2025? Does the management board have a plan in place to prepare JSW for having a shortage of liquidity at the end of the year?
Ladies and gentlemen, we monitor the financial liquidity of the company on an ongoing basis, and we undertake a number of efforts in order to ensure that we do not lose liquidity. Having in mind the difficult situation, as we have mentioned previously, the negative operational balance in terms of volumes and prices, we are covering that with the usage of this closed-end investment fund, which is a stabilization fund, a liquidity stabilization fund. Another tool that we use is all of the work, having in mind the cash in the group, so we use cash pooling. Another thing that we do is that we have unused loans in terms of our environmental activities. This is something that will trigger. In parallel, we are running the strategic transformation plan. On top of that, we have some other endeavors or initiatives to reduce expenditures.
We mentioned savings of PLN 85 million last year, PLN 152 million savings in the first two months of the year. Our strategic transformation plan includes a figure of PLN 365 million in 2025 from 2024. We've already achieved PLN 152 million of that. I think we should probably actually increase, double that figure, the number of savings. We embraced a more conservative calculation when we did that. We have greater efficiency of mining efforts. Recently, we have a new motivation plan that we rolled out. This shows that this was generally a good approach. Basically, our liquidity positions should improve as a result. We have our employee benefits, which represent more than 44% of our cost base. This is an inflexible cost base.
Since May of last year, we've been meeting with representative trade unions, and we've presented a number of initiatives which we cannot implement without the consent of the trade unions. We've not been successful here, but we intend to freeze salaries this year and next year. Effectively, we're going to be reducing headcount within the framework of natural attrition as people retire. This will have an impact on the salary fund. You can also see in previous slides that the salary fund has fallen by roughly PLN 100 million on the costs incurred by the employer. These are things that have an impact on liquidity. This is what we're following on an ongoing basis. Thank you.
The company is using the money in the stabilization fund. Is it possible that you could lose your financial liquidity after this cash is used up?
Let me add, if the pace of redemptions from this fund is maintained at PLN 2 billion per quarter and we have PLN 1.87 billion in this fund, it's easy to calculate how much time the company has.
How does the management team see this?
I have the impression that my previous statement basically represents a response to those two questions, but I'll say a couple more words about the liquidity. We're undertaking a number of efforts to ensure that we're going to be able to protect cash. In terms of things that weren't mentioned, I can talk about negotiations, renegotiations of contracts in terms of payment terms and other contractual terms and conditions. We're also undertaking efforts or measures, actions with respect to payments of taxes in the next current report. We're going to be able to give information about that.
We have decisions made by the management team, and we want to ask for the repayment of the windfall tax to recover the windfall tax that was paid. We have legal analyses which clearly state how justified this application to reclaim the PLN 1.65 billion could have a pretty major impact on the liquidity position. We also have the free coal allowance, and then spreading that over time, that paying went off. We had to also do something else. We have a lot of discomfort. Unfortunately or fortunately, these are things that have to have an impact on employees. Over the last couple months, we've had to suspend payments into the pension fund for employees. Having in mind the difficult liquidity position, the management is planning efforts to reduce personnel costs.
Perhaps I can respond. As I've said, up until now, we've been focused on effectiveness, efficiency. We want to optimize purchasing as well as our investment process. Cost reduction for employee benefits. I am not thinking about natural attrition, but from the moment in time when we took up the position of management board, so we have natural attrition of 534 people who've retired. I am not talking about that. I am talking about the actual reduction of personnel costs. This is basically something we do as a matter of the final order of business. The potential savings would require the buy-in or the endorsement of the social party, the trade unions. Discussions are underway. We haven't reached or struck an agreement, but conversations will be continuing.
Next question. Publicly, we've seen some information that's not consistent in terms about the application for mining in the Dębieńsko deposit.
Could you sum up what your plans are? And have you already prepared or secured a research project, exploration project?
Let me add to what I already said. JSW is the leading producer of coking coal. This is a raw material that's considered to be a critical raw material. Our assumption is that we want to operate in this field for many, many years. One of the important things is to secure access to new deposits. One of those new deposits is Dębieńsko 1. As I said previously, we're in that process to obtain an exploration concession. What's happening here? The Knurów-Ściełowice and the section Ściełowice has a concession to mine basically up until 2040. We are looking at other neighboring regions. Dębieńsko 1 is next. That's why we want to have this exploration concession.
When we submitted our application, we had to have a program for research prepared. This is an attachment to that application. Yes, we already have such a study. Even more, having in mind the ability to gain access to the deposit, we're the only parties that could gain access directly from an operational mine, which is at the section of Ściełowice. This would enable us to prepare the next stage where we'll actually submit an application for the mining concession. Basically, the party that does the original exploration has the first order of business and has a right of priority to do the mining. That's why we're working so hard on that. Thank you very much.
I'd like to ask whether or not the company is selling in the country, in Poland, or exporting coking coal below its market value.
The response is short. Terse, no. If we talk about the global production of coking coal, our global production or percentage of global production is 1%. Last year, countries from the European Union imported some 40 million tons of coking coal from overseas markets from Australia, the United States, Canada, Mozambique. Having in mind the availability of supplies from other markets, we have to have that in mind on the global market. This is part of ensuring that we're a stable and competitive supplier here on the European market. We've said this many times and communicated we negotiate prices using the benchmarks for Australian coal, having in mind, of course, the differences in quality and the geographic rent that we have because of our presence here in Europe. I don't want to revert to those slides.
We've shown you the relationship between coking coal prices commanded by JSW versus the benchmarks for Australian coal. We showed you those price indices, and this is for premium low volatility. This is what the market treats as a benchmark, generally speaking. If you look at the discount, the discount was actually shown to you in the presentation. Let me reiterate what I said during the presentation. We have to remember that we're comparing a mixture of different coal grades. We have semi-soft as well, which is less expensive because it's lower quality. We're comparing all of those different grades of coal, coking coal, semi-soft, and hard to a single type of coal, which is the premium low volatility coking coal from Australia. That's why there's a discount. We had a distortion of the price relationships for semi-soft.
I think I said last year it was 66%. Sorry. The 66 was 2023. In 2024, we're talking about it was 60%. In previous years, the relationship was 80%. Maybe one more word of commentary just to confirm the arm's length nature of our sales prices. The Indian market started looking at dumping prices for blast furnace coke and the low quantity of ash. This was something done by the government. It was for supplies from six countries: Australia, China, Colombia, Indonesia, Japan, and Russia, if I remember correctly. The period of anti-dumping crisis is from October 2023 to September 2024. We as a supplier, even though we were amongst the three largest volume measured suppliers, and we were supplying coke to Indonesia, then Colombia, Japan, or Russia, we are not part of that investigation.
This shows confirmation that we're selling prices or selling our products at arm's length prices. Let me ask another question. Is the company treating the Ukrainian market in a special or preferential way compared to other customers? No. We don't treat any market in a special way. I think I've already said all of our trade decisions, commercial decisions are made on the basis of a market analysis. We look at its potential, what's the competition on a given marketplace. We also look at the alternative sales opportunities.
What is the price level being commanded by JSW versus the benchmark? What is the discount against the benchmarks?
These are responses that we gave during the presentation. Let me reiterate.
If we look at the average price of coking coal that we have versus the top quality coal included in the benchmark, as I said, we present that in every single one of our presentations. In Q4 2024, it was an 89%. Let me reiterate my commentary. The level of this figure depends on the sales mix in a given quarter because each one of the coal grades from JSW is measured separately. We have semi-soft coking coal grades as well, which are incorporated in that valuation. Other factors are at play. The exchange rate for the U.S. dollar, the pace of change in the coal price quotations for PLV. In the near future, we will have our production report delivered for Q1, and this will show you the current prices and the relationship to the market benchmark. Thank you very much.
The next question, are there any plans to undertake initiatives to optimize employee costs in the company? If so, yes, what kind, for what value, and for what period of time?
Let me respond. We had a question that was posed with a similar content. When we talk about optimizing employee costs, this is a last resort. We're focusing on other areas at present. To implement optimization effectively, we need to have the buy-in, the consent of the social partner. There is no agreement with the social party, and that's why discussions will be continued.
Are there any discussions underway where JSW would be taken over by other state or non-state entities like Orlen, KGHM, or some other players? What is the position taken place by the Ministry of State Assets? Are you in any discussions with the Ministry?
We don't have any talks of this nature.
At this point in time, does the company have tapped out its unused lines of credit?
As I said, the company has unused credit lines with respect to environmental loans, which is sustainability-linked loans. The funds from these loans are triggered or originated depending on the advancement of investment projects linked to the environment. Thank you very much. The next question.
Does the management board uphold the predicted loss of production volume of 800,000 tons in 2025?
Ladies and gentlemen, the 800,000 tons was a result of the tragedy that took place at the Ściełowice section of the Knurów-Ściełowice Mine. This was because of a fire that took place there. We are doing everything we can to mitigate the effects of that event, not only in Ściełowice, but in the other mines. Thank you very much. The next question.
In 2024, the management board declared that increasing the output is one of its priorities. In 2025, the decline of output will get even bigger because of the accident that took place at the Ściełowice and Knurów mine. What activities is the management taking to reverse this negative trend?
Let me come back to what we said in reference to the strategic transformation plan. We want to change the functioning of the mine. We want to have a new model in place to be the JSW Group. Some of the elements in this plan should optimize all of the efforts or some of the efforts of all of our mines. Thank you very much.
We have the main target of the strategic transformation plan to reach a run rate of 14.5 million tons by 2026. Is that still a target?
Yes. Having in mind the fire that took place at the Knurów-Ściełowice mine, is it necessary to update that figure? If so, when should that take place?
Right now, the company is not changing its targets for mining output targets for 2026. There are no other questions. If there are no other questions, we'd like to thank you once again, cordially, for your attendance, for your comments and questions. We encourage you to review the materials that we've published on our website. Thank you very much. Goodbye.