Jastrzebska Spólka Weglowa S.A. (JSW) Earnings Call Transcript & Summary

Good afternoon. I'd like -- or good morning. I'd like to welcome you and thank you for accepting our invitation to join us for this conference, during which we'd like to present the strategy of JSW. We'd like to show you the outcome of the work done by the Management Board, the employees of JSW, as well as the participants of the advisory consulting teams. And so this is the foundation for the operation of the group until 2030. The document is not enough by itself. The most important thing is the team that's going to be responsible for carrying out these goals and objectives, and I would like to tell you that we have the people. The teams in JSW are continuing to develop their skills, and so the strategy is different from the one that we've presented up until now. What is the exceptionality of this strategy? Well, the business portion has been combined with the environmental portion. Here, I have a document. This is our environmental strategy. It was devised during a period in which the business strategy was already in place. And this was for a period of 2020-2030. And basically, the teams I mentioned have combined these strategies and now we have a common document that the European Green Deal is starting here in JSW. Without coking coal, there won't be any coke. Without any coke, there's no steel. And steel is a raw material, which is the basic -- the foundation of the development of civilization. And so it's not possible to make a transition to a low-emission economy. And so the Green Deal is based on steel as the raw material. We produce 1.8 billion tonnes of steel, of which 70% is done -- is produced in blast furnaces. With this production technology, you need coke, our product and there are no alternative solutions that are economically viable. Of course, scientists continue to work on other approaches where our products could be replaced by such a new system. Of course, we're fully aware that our operations have an adverse impact on the environment and we're doing everything we can to mitigate this impact. This is a major challenge. We want to deliver to our consumers a product with the lowest carbon footprint, lower than the ones that are provided by suppliers from outside of the EU. Can you imagine a world without steel? [Presentation]

The JSW Group, in terms of organizational housekeeping details, the rules and regulations, all of this is defined in the incorporation documents. And on the operational side, we have separate mines that are extracting coking coal. And then we have coking plants and JSW KOKS is responsible for the production of coke. And so we focus on mine extraction, so extract coal extraction and producing coke. And this generates added value, and this makes it possible for the group to continue to develop. And this geographic location is going to be quite important when we show you the European steel industry, when we get on to that, we talked about that subject. So in 2014, so nearly 8 years ago, our product became one of the 30 critical raw materials. And this list was not set up by accident. It's in terms of the availability and the impact on the economy. So since 2014, we're talking about coking coal being one of those critical raw materials. And on one hand, this is a type of enablement because it should make it possible to have better relationships in terms of sourcing fund, financing, but at the same time it's also a major obligation because if there's any destabilization in the supply chain, the rhythmic pulsation of the supply chain is something that could have an impact on the European economy. So thank you very much.

I would like to continue and dwell upon the words -- preparatory remarks made by our CEO, Mr. Cudny. There's one response to the question about what would the world look like without steel, the world wouldn't exist. It wouldn't transform if there's no steel. Steel is critical. And in our strategy, we'd like to show you our position as a group in terms of where our products are placed. We'd like to show you the market context. And we'd like to show you where we are in the EU. The most important driver for our operations is demand for steel and the consumption of steel, and the response seems to be quite clear. Well, we know that, but we want to show you that based on figures that come from data sources, professional data sources, in order to evidence that these are forecasts, but certain trends have been clearly shown. It is estimated that by 2050, the consumption of steel will grow by some 60%. But if we look at the EU alone, it will grow by some 30%. If you look at the graph at the top. Across the world in all of the economies, India, China, Pakistan, Indonesia, Nigeria, the United States, the rest of the world, Europe, the consumption of steel has an upward trend. It's clear from this graph. Of course, we can speculate about what the CEO said whether or not the steel can be produced without the utilization of coke or coking coal. So overlooking the traditional or conventional method of utilizing blast furnaces to produce steel. Today, there is no other realistic alternative as opposed to smelting steel using a conventional methodology. The estimates you see here in terms of steel demand, so on top of the original and secondary utilization, when we're talking about the utilization of scrap, for example, scrap will be used to a greater extent when you melt that or smelt that. And of course, the Green Deal will support that and underpin that. We're aware of that. But this is something that will satisfy the growing demand for steel. Invariably, however, we'll have demand for steel produced in a conventional manner, which is the original method, the original demand, primary demand, and this will utilize coking coal and coke. That's our opinion. Basically, we've tried to show you that in the bottom graph, if you look at the primary production, there are certain innovative technologies linked to hydrogen where there are certain prototype-style productions. This is not industrial scale operation. But we do take that into consideration. At present, we do not see such a threat that, that could, in some way, shape or form replace our products or affect them. So if we look at our major products, so coking coal and coke and coke produced using blast furnaces. So it's very clear. One of the authorities in the field, a research institution up until 2026, despite the fact that there are these type of technologies out there, there's no opportunity to replace coking coal or for coking coal to be used to a lesser extent. So we're not concerned by that. We understand the context the environment in which we operate, we understand the distinct nature of our group. JSW has 2 segments that are integrated. We have the coking coal segment and the coke segment, where we have -- we're not integrated with steel mills, but we have hydrocarbons in coke. 100% of the product that we produce we have to sell on the marketplace. And so the most important thing to our customers is the stability of cooperation with our clients. And this is of primary importance, having in mind our location and the significance to the EU. And so we'd like to show you that on the next slide in order to make you aware of the position held by JSW, especially during this period of major geopolitical changes, which have surprised or astonished many market players. We've been working on the strategy for quite a while now. If you take a glance at the overall production of steel and coking coal, so the EU is importing some 40 million tonnes by rail or by ports to create steel. So of the 55 million tonnes, well, so 40 million tonnes is coking coal. And so JSW is the only producer of coking coal. We're producing some 11 million, 11.5 million tonnes of coking coal where the total production capacity in the EU is 14 to 15 million. The rest comes from Czech mines, which are still operating in the OKD company. And there are some other coal mines that have semisoft coal grades. So the only significant producer of coking coal, high-quality coking coal, in the EU is JSW. And so we continue to invest in the mines and the seams. And so if we look at the sources of coal and how this influences our production, so if you look at that, 11, 11.5 million tonnes of coking coal, so we understand what our position is in Europe. And even if you sum up some of the numbers, you have the United States, Australia and Canada, those are the sources for these imports. We have some small tonnages coming from Mozambique and the EU. And there's one item at the end, I've left this, the 10 million tonnes of coal that is sourced from the Russian Federation. Today, we don't know what the consequences of this policy will be if this is a source or a stream that will be continued or will it be deleted to 0, canceled. If we look at the various analysis research, our own research and external research that we utilize, the consequence is, regardless of what happens, this will not deteriorate the position held by JSW. And in certain circumstances and in certain periods, this could form an opportunity for our group. This is important and I think we can discuss this on the next slide. What is the business model to have stable revenue? If you look at our customers, if we look at our geographic location, basically, we have an advantage that we draw from that geographic rent. Well, we can say that there's a lot of change on this marketplace and so there are international indices that define the top line. And basically, all of the players have to submit to the same rules, we're not -- we don't operate in isolation. But if we look at our cooperation with our customers, this is something that we do very closely. And there are a couple of things that are quite important here. If you look at coking coal, we're cooperating with all of the largest steel corporations -- mills in Europe. We have very stable relations where we've been working together for 10, 15, 20 years and more. We know the management teams of all of those steel mills. Regardless of what happens with the market, we always look at a win-win position and this is value in and of itself. If you look at our geographic location. As you can see, basically, within a radius of 500 kilometers, we have customers of our mines. And so we have stability of delivery and supplies. And it's important to our customers that they also have stability of supplies. The CEO mentioned we have to look at the carbon footprint. The fact that our coal is present here at a small distance, this is also very important because imported coal from different areas of the world have a different carbon footprint. What's also important, in particular today, this is safety, both for ourselves and for our customers if we have the raw material located here. These are mines that we're caring about and we're investing in them and they're available to our buyers, to our customers regardless of what's happening in the marketplace. This has been shown by the COVID period where there was a lot of perturbation in terms of the flows of raw materials, I've mentioned that previously. None of our mines stopped operating. And the raw materials were available to our customers. We can say the situation has been exacerbated. We understand now what it means when the supply chain, the value chain is severed and if certain components are missing. We have resources here in the EU and that we're able to sell safely for ourselves and for our customers. And that in and of itself is a value. And that pertains to coking coal. And you can see the mix. Starting with Germany and all the way down to Hungary, how many millions of tonnes are imported and where we are as JSW? So Poland, Slovakia, Czech, Austria and Hungary. So in general, we have the biggest steel companies and steel mills, which have their integrated coking plants. We have our second segment, which is the coke segment, where we're producing in 3 different coking plants. Usually, it's blast furnace coke that we produce. This product has slightly different characteristics. And so it has a higher value because it's been refined. Second, the market is much more diversified. And as a result, we're able to generate an additional margin. We also have markets outside of Europe in addition to the big buyers in Europe. A large portion of that production through our ports goes to India, Pakistan, Vietnam. These are some of the countries where we're present, where we have a footprint and we're going to maintain that diversification for reasons of strategic nature for safety reasons. We should also say one more thing. Regardless of the development of the situation in the EU in terms of technology and steel manufacturing, the blast furnace technology is not something that will disappear. It will exist -- coexist with other innovative technologies. If you look at all of the overseas markets, especially the Indian market, the investments in typical blast furnace process, so using coal and coke, that process has begun to invest in it. There's a number of investments being made in that technology. So the blast furnaces that have been created or will be built, they have a depreciation period of roughly 30 years. And this is a market that we'll retain for a number of reasons, for safety reasons. Our coking plants consume roughly 5 million tonnes of our coking coal and they're our window to the world in terms of our diversification. This is something that we care about along with our customers with whom we've had great relations for many, many years. And then I would ask for the next slide, please. Here, we'd like to show you the importance of coking coal in the economy. The CEO kicked off that discussion. There's no low emission transition without our coking coal and coke. To show you that in numbers, I'll start in the middle. In order to produce 1 tonne of steel, we need 560 tonnes of coking coal. Of that, we have 400 kilograms of coke and we can build 1 tonne of steel. And then if you want to build, for example, a wind farm, you need 140 tonnes of steel to build 1 wind farm -- sorry, 1 turbine -- wind turbine. And this shows you the importance. So coking coal has once again been appreciated and noticed. It's been placed once again on the list of critical raw materials. If we look at the current geopolitical situation, the EU has classified this raw material as a raw material that the EU needs and we'll protect it because this is the sole available source. Another thing that's quite important. If we look at critical raw materials, one could anticipate, based on what's happening at present, if we look at the activities of various countries under the definition of local content, what we have present here on-site, this is something that's going to be quite important. There's going to be a certain type of protectionism for materials, critical raw materials things we have on-site. There's going to be a certain type of trend. The EU and the rest of the world has noticed what it means if supply chains are severed, if you don't have access to raw materials, if we don't extract them or where we could do that. The same is true of our coal. We have it here on-site. We know how to use it and this is something that will be appreciated to an ever greater degree. As we mentioned previously, the operations of the group are conducted in 2 segments: in coal segment and the coke segment. So we're a participant in the supply chain of coking coal, coke and then on into steel. And if we focus on these tasks, we do not forget about one other product group: these are hydrocarbons. On the marketplace, there's a lot of demand for hydrocarbons so we can talk about [ coking gas ], tar, also ammonia, and we're not forgetting about those things and they generate value for our group.

So let's take a look at the next slide. So our business model shows you our organizational tenets and this is about an effective execution of our strategy and the vision that we have as the JSW Group. It fully reflects the resources and competencies we have in order to achieve our key goal of delivering products to our customers. As we mentioned previously, we talked about the mission and the extraction of the strategic raw material is a challenge. Well, our vision shows you our ambitions: we want to be a leading supplier of coking coal and coke to the steel and chemical industries. All of the work we did on the strategy was organized in 5 pillars. Each one of these pillars was scrutinized by various teams. It dug down deep into operations. So finance, clients, people and the environment, internal processes and development. And so we want to say a few words about each one of these pillars, and we want to tell you a little bit about our vision for those pillars. So I'd ask for a few words about the finance pillar.

Welcome, ladies and gentlemen. At the beginning, we'd like to show you our major objectives. Financially speaking, in the period that we've embraced for the strategy up until 2030, the first thing is that we want to undertake a number of measures to enable us to generate a 25% margin -- EBITDA margin. Of course, this links to our production and the margins, the prices we can command and the products that we can offer to our products -- products we can offer to our customers. We can also talk about certain things that depend on us to a greater extent. So on the cost side, so we have to be rigorous in our cost control over the financial perspective. And one of the measures, which shows us the operational effectiveness of our organization, well, there are 2 of them, in fact. There's the mining cash cost and the cash conversion cost. And so those are the 2 segments of our business. So later, I will show you our assumptions for what's going to happen in these cost metrics in the future. So here, we have the cash cost of producing extractions. So up until 2030, we want to reduce that cost by PLN 100 per tonne. So it's even less than what we have in 2022. And if we look at the coke segment, well, it will grow to PLN 302 from the current level of PLN 240. And so a little bit later, I'll tell you about the reasons for that cost growth. But in terms of our balance sheet, we assume that we'll have a stable financing structure. And we believe that, basically, we want to have a fixed capital-to-asset coverage ratio in excess of 1 where we've been listed on the stock exchange since 2011 and we've gone through many different moments and we had a variety of cycles. And we had periods in which we were fighting for liquidity to survive. And we also had above-average results. And based on our skills, competencies, we're able to operate in an economically viable fashion. But the mining industry, especially if we talk about deep mining industry, well, this is a capital-intensive business on one hand. On the other hand, the rates of return or the payback periods for our investments are relatively long. And that means that we have to have a stable financing structure. So on one hand, we have to have the right level of equity. And on the other hand, we need to have financial partners participating to deliver long-term and short-term financing. And that's part of our operating strategy. And that's about it I'd like to say right now on this slide at this time.

So the next strategic pillar are our clients. So our group lives based on what we produce and sell. 100% of what we produce needs to be sold to our customers. And our strategic objective, overriding objective, is to maintain good relationships with our customers and to be a strategic, unchallenged and reliable partner for our clients. They rely on us because they have coking plants in their locations, in their sites and this is a continuous business and they have coking batteries. So if there's any break in -- interruption in the supplies, that would be a very bad situation. So they need to be able to rely on us regardless of what's happening in the outside world in Europe, across the world. The second thing that's quite important to us, that's diversification of our revenue streams, both in terms of product as well as geography. Geographically, I've already mentioned a few things. But in order to illustrate this to you, based on some of the figures, in 2022, 70% of our volume of coal was sold to Poland, 30% was sold across Europe. All of the activities, we will continue to pursue over the strategy period. We want to sell 60% of our output to Poland and 40% to the rest of Europe. That does not believe -- that doesn't mean, however, that we're going to redirect production to Europe. Instead of selling it to Poland, we have a plan and a strategy to ramp up our run rate of coal production and we're going to sell that additional coal production in a more diversified fashion. So at the end of the day, at the end of 2030, the mix could be a little bit different depending on the dynamics of the market. If we look at coke, 70% of what we sell is sold across Europe. It's a more diversified market, as I said. 30% is sold to the overseas markets, the rest of the world. That's the case in 2022. And our goal in our strategy is to have a flexible policy. And so roughly 40% of our output of coke we want to sell to the overseas markets across the world and 60% would be sold in Europe. This is not a major change. This is a policy that we've been pursuing for many years, but the starting year that we have taken into consideration is a very distinct year and this comes from 2021. We had certain contracts, certain obligations that we took down because the European market was more important. There was a certain collapse of supply chains, and we had a slightly lower share of the overseas markets. So basically, this is a matter of returning to a position that we had in place many years ago. So we want to maintain our safety in this fashion. So outside of our core business, so the sales of coal and coke and hydrocarbons, we would like for 10% of our revenue we would like for that to be generated by other sources, so renewable sources, so electricity and heat, which we will produce in higher quantities. And we'll show you that a little bit later in the presentation. On top of that, there's one other thing. When we talk about cultivating relations with our customers, off-takers, we have to mention what we're producing for our customers, the quality of our products and the quality of our merchandise or goods. The advantage that our group holds is that we can produce certain things in the mines and we can achieve parameters in our coking coal grades where we have type 35. So hard coking coal, and then we have CRI parameters. So this is reactivity of the coal. So this is coking parameters. And it's very important when you're producing coke, we're able to drive that down to below 30% by mix in coal grades. And the same is true in terms of our coking batteries. We want to maintain the standard. We want to have CSI (sic) [ CSR ] above 72% and CRI below 30%. And this is linked to the expectations of all of our customers. Well, the PSI technology also forces us to produce coking coal with a very stable level of chemical properties. And so we want our customers and our off-takers to receive products that have stable parameters, qualitative parameters, in terms of what's required in the quantities required at a given point in time. This reliability is very important.

Another strategic goal mentioned in these 5 pillars: people and the environment. So the environment is something that's measurable, and the milestones mentioned here for 2030 and 2050 we've set the bar very high. We want to reduce our carbon footprint by 30% in 2030 as we compare that with the metrics we had in place for 2018, and we want to have a net climate impact by 2050. We're one of the first companies, so since 2018, we've been showing our carbon footprint in our reports. We didn't run away from this topic. We didn't flee in the face of this topic, but utilizing the greenhouse gas emissions protocol in order to define the carbon footprint. And this is something that's the most popular method in the world. Of course, how to achieve these goals will be presented a little bit later in the presentation. We're mentioning that not just because we're announcing our strategy. This is something that we're working on every single day. This is one of the bigger challenges for all of our mines and for the management team. And we're looking at safety, scrutinizing it in nearly every possible moment. We have indicators we want to minimize. And all of the efforts we're taking are measurable. If we look at accident ratio, things like that, these are things that we need to reduce.

So thank you very much, ladies and gentlemen. Now I want to tell you a little bit about our strategic goal in terms of our internal processes. As we know, coking coal is one of the critical raw materials according to the EU. And so one of our goals, well, coking coal extraction is one of our key objectives and this is an overriding objective we have for the long term. Basically, we're looking at the objective formulated in the following way: we want coking coal to account for more than 90% of our output by 2026. In 2022, we anticipate that we're going to be able to exceed the 80% threshold. We want to achieve 84% watermark in 2022, where we exceeded the 80% threshold in 2021. So by 2030, we want to be able to exceed the watermark of 90%. If we look at our mines, the Southern mines, we can say that we are already achieving that threshold. The Northern mines, so in Budryk and Knurów-Szczyglowice, have a challenge to achieve that target level. And at the same time, this is linked to our coal and coke output. We assume that we'll have 14.5 million tonnes of output of coal. And so in 2030, we will achieve our target run rate where exceed 16 million tonnes of coal production. If we look at coke, this year we want to produce 3.5 million tonnes of coke. The average in the period 2022-2030 will be 3.6 million tonnes of coke. The next strategic goal we have is linked to development. Basically, we want to put in place and secure our resource base of coking coal. These are development investments in order to gain access to new deposits and new mining levels. So we're going more and more deeply into the ground. So we can say that in all of our mines, we have new mining levels, extraction levels where we're opening up those seams. Sometimes we have 2 shafts. In some cases, we're preparing the preparatory works. And so this is the first stage of our strategy. Of course, one of the key things in our capital expenditures for key investments, well, this year, we want to spend PLN 470 million. On average, over the 2022-2030 period, we want to spend on average PLN 400 million a year for development investments. And basically, we have this thing where we're going to sink deeper our shafts then we'll open up new mining levels, then do methane drainage from the mines. So the methane that basically accompanies mines, we want to modernize and utilize more and more effective technology to operate better and we'll be building what we call a climate station and -- so methane drainage stations to ensure that we have stability of the local environment. And so if we look at some of the operational assumptions, we have 5 mines. Some of the mines are actually combined mines with multiple sections. So we want to open up new mining levels, extraction levels. This applies to all of the mines in our company. In parallel, with this development, so preparing new seams where we anticipate that we're going to be opening up some of these levels to have coking coal. We have development projects that have been identified in terms of energy for -- renewable energy sources and making sure that all of our equipment and machinery is efficient in terms of energy. And so we want to utilize also the methane. So from the main airstreams, we want to capture that methane in our main ventilation shafts in the mines. And so we're sticking close to mining areas, but we're also looking at surrounding areas. There are 3 deposits we have in mind. So there's [indiscernible], Pawlowice and then we have [indiscernible] 2. So these are some of the future areas where we'll be mining in our company. So if you look at the CapEx across the group during this period of 2022-2030, it's our intention to invest more than PLN 22 billion. And we have the 2 core segments. Of course, the coal segment is the biggest, it's the future of the group. This is where everything starts and spills over into the other areas where the operations of our group are conducted. So in the coal segment, we want to have nearly 18 billion CapEx spend, which is roughly 80% of the overall CapEx in the group. And basically, the 3 additional structures so we have buying equipment, modernization of our longwalls. So we have spent more than PLN 7 billion in terms of the expensable mine pits. So we prepared, as I said, the wall faces, the longwalls, and this is linked to leasing machine, buying machines where we spent more than PLN 2 billion in total. We would spend some PLN 18 billion -- or almost PLN 18 billion. Then we have the coking segment. So this would account for some PLN 3 billion. The other companies in the group would have nearly PLN 2 billion. So it's very important in the strategy is the CapEx that will be dedicated to environmental projects and this will be more than PLN 4 billion. It's also an important segment. And so if we look at our operations, the production of coal, extraction of coal, so if you look at 2022, we plan a run rate of 14.5 million tonnes. And as I mentioned, more than 80% will be coking coal, then the rest is for steam coal. And of course, there will be less and less steam coal over time as we move more in the direction of coking coal. And the goal at the end of the day is to have a run rate of 16 million tonnes with coking coal accounting for 90% of that run rate. If you look at our recoverable coal reserves. So we have more than 1.2 billion tonnes. So this is recoverable coal reserves. This is what we're looking at in terms of doing our investments, all of the actions we take, either vertically or horizontally, in order to be able to look into the future with confidence. What else is important is the commitment of the staff and we want to achieve a certain level of productivity. We want to enhance that productivity. In 2022, we believe that the number of tonnes per employee will be 662. And we have in mind not only our own employees, but also the employees in the company called [indiscernible] so these are the people who are directly participating in production. And so we want to achieve a target productivity of nearly 800 tonnes per employee by 2030. If we look then at our corridor works, which are very important in defining the future. In '22, we anticipate that we will achieve a ratio of 5.5, which is very high. So every mine that has this ratio guarantees that it's going to be able to replenish its longwalls and have wall faces to mine in the future. And so there's a lot of investment works that needs to be done. So it's quite substantial having in mind the new levels. So we have work to be done in terms of the rock on the coal after the seams are opened up. Once we can get to them, then I wouldn't say it's going to fall, but it's going to be matched to the level that would give you a run rate at a certain level. If we look at the Northern mines, and not only the ones in the North, we understand that we can reach certain seams where we'll have thicker seams and then we'll have these expensable works. So have corridors where we'll be able to prepare mine seams where there'll be less rock, more coal. So in 2022, we plan to tunnel some 79 kilometers of mining pits. And so we can say that, well, 81% of these -- this tunneling work will be done by in-house employees. By 2030, we anticipate that nearly 90% of that work will be done by our in-house employees. So thank you very much.

So on top of the coal segment, we have the coke segment. What my colleague mentioned in terms of the PLN 22 billion CapEx, so a little bit less than PLN 3 billion will be allocated to the coke segment. Of course, we want to maintain our production capacity that we have installed at present. That's our overriding objective. And so we have 3 coking plants. We have Jadwiga, Przyjazn and Radlin. Now Przyjazn is the largest coking plant. Here, we want to modernize 2 coking batteries. This is #4. That investment was already started and it's on schedule. It's under progress -- underway. Then we want to modernize another coking battery and then we want to modernize also the dry cooling installation on Battery #5. Then Radlin is the second largest coking plant. So Przyjazn produces 2.6 million tonnes. Radlin produces 0.7 million tonnes. And so here, we would spend money on building a power unit. This is something that's underway. At the end of 2030, we will have basically a stream renovation of Battery #1, which is also included in our strategy for 2030. And the smallest coking plant we have, this is the Jadwiga coking plant, the first two, Przyjazn and Radlin, are coking plants that produce most of our blast furnace coke, in just a moment, I'll refer to that, whereas Radlin -- or Jadwiga, sorry, has about 200,000 tonnes of coke per year. It's a very specific coking plant that is for chemical grades. And for the soda industry, it has regular buyers. So we want to maintain this coking plant. And so we have to meet the BAT, best available technology protocols. So we want to maintain its capacity by doing the regular renovations of the coking batteries. And we also want to do, of course, an installation for removing the sulfur. This is an absorption sort of installation. Then we had Debiensko, which was producing heating coke only for -- it was an old coking plant for -- in existence for nearly 100 years, it was operating for individual buyers. And so that coking plant was closed a few years ago, and we have free land in Debiensko where we would like to launch in -- PV farm by 2029 with 10 megawatts of power. And this investment is in our coking investment, it's a strategic investment. And so if we go down into the details and the schedule. In 2023, it's going to be an important year for the [indiscernible] coking plant because we would complete our investment for a number -- Battery #4, and it would go live. In that same year, we'll turn off Battery #3, shut it down. In 2027, this is going to be another investment in another battery, basically would be able to launch Battery #3, the new Battery #3, and then we would shut down Battery #2. And so the investments have been planned in such a way that we'd be able to maintain a stable level of production volume between 3.5 million and 3.6 million tonnes per annum all the way to the end of the strategy. What will happen in 2030 and only in that year, we'll have roughly 300,000 tonnes of total coke production reduced in the 3 plants. And that's because we're going to have to do a renovation in some of the replacement investments. This is to be done in Radlin. And this Radlin plant is a single battery coking plant. And in order to do work there in terms of replacing the ceramic parts, some of those chambers have to be shut down, and that will affect the production. It's a short-term investment. It doesn't take much time and will be done within the framework of a given year. So that number that you see, which is 3.3 million tonnes, that's something that applies only to 2030. And this is linked solely to the need of producing -- sorry, of renovating this coking battery at Radlin. The next thing that's important is [indiscernible] has a very small amount of blast furnace. It has a distinct group of buyers, but Radlin and [indiscernible] have a lot of blast furnace coke as we want to drive up the quantity of blast furnace coke that they produce. So we want to increase it from 70% to more than 78%. This is where we have the biggest revenue. We'll do less smaller green coke production, where we have a lower revenue. So thank you very much.

Now if you look at sustainable development, if we think about our corporate social responsibility, we treat this area as a management team and our teams that are cooperating with us very seriously. Sustainable development is utilizing the environment in such a way, so as not to thwart the ability of the next generations to utilize them. This capability, we were thinking about a word that would define our approach to sustainable development. And we found this word, which is respect conservation. So we respect the climate. We respect our national resources. We respect safety and health of people. We respect the market. We respect the natural environment, the local communities, and we respect our employees, and we develop each one of these areas individually with a feeling of respect. If we look at corporate social responsibility, how it's defined, I mentioned previously, this really testifies to our approach. We're well aware that our operations exert an impact on the natural environment. And that's why everything we do, we do to mitigate that adverse impact in order to ensure that we can serve nature and we want our local communities to live in more comfortable conditions. So our operations are quite specific. It's not something that you can pick up and move somewhere else. We operate in a given environment, we're a participant in all of the changes taking place, and that's an obligation for us. That means we have to cultivate relations with the local communities, and we have to care for our overall environment. Let's look at this on a macro scale. So after these resources were found in installation, things started to change. It wasn't a matter of just extracting these natural resources. It was a matter of the responsibility for the environment. And there was also a very good change. Maybe it's not as well reflected in the strategy, as I would like. This is a change in culture, perhaps in our next presentation, we can talk about that cultural change. But let's go on. This is something that I mentioned previously. This is the carbon footprint. And we'll say a few words about that -- more, we'll say a few words more about that subject. The metric, the measurements that we're doing enable us to define the direction for further operations. And I want to tell you that nearly 84% of our carbon footprint is methane. And the work that we've done and the work that's been done by our predecessors who made the decision to mitigate the carbon footprint, well, they started with those areas where that's the biggest impact. And we had a big program started in 2018, which is the methane utilization approach. It's not just about heat, and it's not just about electricity. Carbon footprint has another dimension that's very important. This is labor safety, occupational safety. Through these activities in mining, Mr. Pazdziorko talked about that we're going to have greater comfort in our production environment. These are things that we want to -- we want to reduce our carbon footprint through a number of factors and drivers. They are specifically defined. We're talking about generating electricity and renewable energy sources. We're waiting -- we're thinking about placing carbon dioxide in caverns above ground. We're talking about doing an audit of our energy balance and looking for savings, which will impact the environment in terms of how we purchase energy. We have plans for the upcoming years. In terms of energy generated on the surface, we're talking about audits and certification, but we're not stopping here. We're going to continue working further. We're looking for other solutions. And we can show you this on the next slide. Here, you can see the areas where we want to reduce our carbon footprint. The biggest decline is through the utilization of methane. We're talking about purchasing green energy. We're talking about improving, enhancing our energy efficiency. We have development plans in the period after 2026. We believe this science is not asleep, especially in environment. We'll have some tools and solutions that will enable us to reduce our carbon footprint. As we look at the next slide, you can see the accumulated effect of our operations to achieve climate neutrality by 2050. We've defined specifically, the things that we're going to do by 2030. We know the areas where we're going to work and we'll be watching that very closely. We'll be tracking that very closely. So starting in 2026, 2027, after 2030, we'd open the company in the direction of scientists and others in terms of CO2 solutions. This is a very important subject in terms of reducing our carbon footprint. How do we want to achieve that? We're showing this not only through finance, but through how we operate. So how we're organized is very important. We're in the process of setting up organizational units within the group to bring together in one spot, all of the activities we're taking in terms of energy environment. These will not be spread across various departments. So if you look at Tauron or the [indiscernible] company where they have their environmental operations in place, we're at the end of the process where we'd set up certain units within the company. Well, communication and reporting will be very important to us because that means we'll be able to draw some conclusions. So reporting and monitoring is an area where we've gotten ahead of the game in terms of methane. This is something that we've been doing, something we've been tracking and that's informed our operations. So if you look at some of the obligations that were put in place in the methane program by the European Commission after December 2021, these are things that we're already doing. We're on target. We're on track, and we'll extend that to other units within our group. Then we can talk about the development of our energy assets. So on top of the development of the Coal segment and the coking -- the Coke segment, where we talk about production volumes and mix. We have this idea pillar in terms of how we're going to develop our energy position. And we have a very clear goal, a correct goal that we want to have the greatest amount of energy self-sufficiency. We have 6 bullet points here linked to what we're already doing, what we intend to do in the future and how we'll operate and participate in research work in the future. So the first thing is that we want to extend the cogeneration of gas engines that are fired by mine gas, so methane. So we want to increase the capacity to 60-megawatt of capacity. So we were able to capture some 58% of the methane captured in 2021. As of 2025, we want to be able to utilize for energy purposes 95% of the methane. This primarily pertains to Knurów-Szczyglowice and Budryk. So our northern mines. So this is where we plan to utilize that methane. The next major assumption is that we want to build a cogeneration power unit that would utilize coking gas in JSW coke. This will be in the Radlin coking plant. And this will have a capacity of 28 megawatts of electrical power. And so we should have basically an increase in the capacity there to 28 megawatts. So after completing the investment, we should have a 95% utilization ratio of that methane at that point in 2025. Then we want to build PV farms with a total capacity of 110 megawatts of power. So a new pro-environmental technology to reduce the carbon footprint. So we can say another thing that is correlated with that. This is the fourth assumption is that we would purchase energy from renewable energy services. We want to buy directly from the generators under PPA arrangements. So a challenge will be the utilization of what we call ventilation methane. So this is a VAM process. So we would participate in various research and development projects, and we'll utilize a variety of solutions. So the methane that's leaking through ventilation shafts is hard to detect, but this is a challenge for the future of the company, but for the future of all hard coal mines. And the sixth assumption and tenet is that we'll improve our energy efficiency. So the CapEx that we'll earmark here will be for the purpose of -- well, it's [ PLN 117 million ] in the group, so roughly [ PLN 300 million ] we want to incur in order to improve the energy efficiency of our machines and equipment in our various mines. So the development of the Energy segment of our business to sum up, so is we want to expand our methane-driven engines from 26 megawatts of electrical power to 60 megawatts of electrical power, especially in the Pniówek mine and the Budryk mine along with Knurów-Szczyglowice, as I mentioned. So we want to do this in those mines that will have a bigger challenge in terms of the commercial utilization of methane. After we complete the investment in Radlin, we'll be able to expand our capacity from 110 to 138 megawatts in electrical power. And then we want to increase basically our PV farms from 0.8 megawatts of power to 110 megawatts of power. And so this should produce certain results for us. Starting from 2029, we anticipate that the volume of energy generated from coking gas, methane and PV installations should be 1.62 terawatt hours per annum. And the capacity that we anticipate that we'll be able to have in place is 198 megawatts of electrical power. If we look at the volume of electricity generated from renewable energy sources, this will be 110 gigawatt hours per annum. So it's our plan and what we'd like to achieve that 93% of our energy demands we should be able to satisfy internally. In parallel, we would like to secure and maintain concessions in the parent company for the generation of electricity. So in our cogeneration units, as well as in renewable energy sources units and to distribute energy. So we'd like to distribute also coking gas and so transmission, distribution and sales of heat. These are things that we'd like to do. So thank you very much.

So ladies and gentlemen, in the last portion of our meeting presentation. I'd like to tell you a little bit about our assumptions for financing JSW and the overall group. The first, the fundamental goal is to have a stable financing structure up until 2030. And we'd like to align our sources of financing to the nature of our business. We've said that when you're in the mining industry, well, it's possible to generate an EBITDA in excess of 25%. On the other hand, we need to have sources of financing that are in line with the payback period or the time of those investments. And that's why we need to have a safe financing structure based on long-term capital, and it should be -- the long-term capital should always be worth more than the noncurrent assets. So we should always have a ratio of at least 1. So if we look at the investments up until 2025 and over the subsequent perspective, we'll follow the following ratio. We believe that the net debt to EBITDA should be under 3.3x. We believe that's going to be the optimum level of debt. How do we want to achieve that? Well, first, we want to build long-term financing sources. So a portion of our profit should be earmarked to supplementary capital. And so our closed investment fund is an important thing, is that we want to have money set aside to finance our investments. Our goal is also to build a structure of external funding, both long term and short term, an important component and part of our financing in the target structure. That's the green portion. So we're a company that has a responsible approach to development, and we respect the requirements to protect the climate and to reduce CO2 emissions by 30% by 2030. These are things that we want to do. Having in mind these specific goals mentioned by Tomasz Cudny and Edward Pazdziorko, we will have a separate segment dedicated to development of these projects. And then we want to manage actively liquidity and financial risk. So we're talking about instruments like cash pooling. When we have volatility of coking coal prices, coal prices and coke prices, this means that we can be stable and solvent in terms of our obligations when we have high prices of coke, low prices of coal, which we had in 2020, 2021. So the Coking segment gave liquidity to the overall group by utilizing this tool. Well, in the current situation, where we have high prices for coal and the liquidity of the group, this will be -- the liquidity will be assured by the Coal segment, and this is how we'll source the ongoing operations. That's one of the sources for financing. So we're also effectively managing the risk we have. We have the exposure linked to FX rates, so foreign exchange currency rates. So for years, we've been pursuing measures to mitigate these risks to the extent possible, of course. We have the Financial Risk Committee, which analyzes and monitors exposures. We enter into transactions to protect the group and the company against price volatility in euros and dollars. We have also a much shallower market, which is where we can hedge against coal price risk. And this enables us to gain experience on this market. Second, it protects us to some extent to changes shifts movements in coal prices. Another role, a big role played in maintaining our financial stability, well, this is done by the closed end investment fund. And in the previous years, this helped us a lot. So we had surplus profitability. So we had PLN 1.8 billion. So we had lower prices, worse market conditions in 2020. The fund -- the money from that fund made possible -- made it possible to ensure the long-term operations of the group and the company, and we believe that the money from this fund in potential market downturns would ensure that we'll be able to continue investments in the Coal segment and the Coking segment. So having in mind the short-term financing instruments, we assume that we'll have revolving -- we'll have factoring letters of credit to stable our -- stabilize our liquidity in the short term. On the final slide, I have the pleasure of presenting to you our SWOT analysis for the overall group. And I prefer to start with the weaknesses and the threats and for us to end with a discussion of our strengths and our opportunities. So if we look at the weaknesses first, the first one is that we have a high level of fixed costs. So there's a lot of materials, we have to use human resources, we have to maintain them over the whole period. So we have a high level of fixed costs. This is something that we're capable of managing. We understand it, it's not a risk that would lead to bigger problems over the period to 2030. As a mining company, on a daily basis, we're dealing with hazards linked to geology. We have geological documentation, we have surveys, we do reconnaissance work, exploring -- exploration work. But on a daily basis, we have faults. We have various disruptions in the teams, and this can interrupt our mining extraction operations. So another thing is that another weakness is the presence of natural hazards. So we do have coal associated with methane. Methane is a source of energy. We convert that into the utilities. We utilize for our operations -- units to operate. But at the same time, it is a threat in a number of our areas of business. So we're trying to minimize that threat. So the operations in the mining sector in underground mining and our hard coal business, if we look at the plans for development, replacement investments, basically, you have to do a lot of upfront work to gain access to resources. You can't do that unless you have major capital resources. So we can say that there's a lot of sensitivity to various market cycles. So there could be a -- all markets, we have a high level of price volatility, and they may also have the CO2 emission allowances, and this affects our operations and drives basically how much return we can deliver to our shareholders. Then we have limited access to new coal reserves because there could be a lack of support and cooperation with local governments and local communities. We have all of the concessions we need to 2030 and beyond. But if we talk about the continuation of mining operations, one of the weaknesses we do face is -- well, this is one of the areas that we have to manage as a weakness. If we look at threats, I talked about a few of them. We have the technological threats, for example, it's a pretty distant threat. If we look at research and development, so steel producers and their R&D institutes are looking for a substitute for Coke. Up until 2030 and beyond, realistically, we don't think that threat will materialize because we don't think there's any economically-viable technology that could replace the current conventional method of producing steel. Another threat, however, is the consolidation of the steel sector, restructuring of steel assets and import of steel products from China, disruptions in the coking coal supply chains. Of course, we have very clear recent manifestations of this risk linked to COVID. This affected our ability to run operations and then we also have armed conflicts. Recently, this was a virtual slogan, where -- it didn't seem that this could actually disrupt our value chains and supply chains at all, but this risk, this threat is very tangent. We're not able yet to quantify its impact on the operations of JSW and the overall group. Even so, we believe that there will be a period of reconstruction following the armed conflict. We also have a priority of meeting the quality requirements of the buyers of coking coal. So we strive to respond to them on an ongoing basis, as we produce coal and do our work in the coal preparation plants for our coking plants and then for our customers, we're using that coke. We also have in mind the transition of the mining sector. Well, the transition of the steam coal market has been changed, and there's a modification that's been a path that's been defined, but we take into consideration that there could be some knock-on impact from this risk, legislative changes linked to the European Green Deal. So we've treated this quite seriously, this green component in terms of how we developed our own strategy. And we have a responsible approach to reducing CO2 emissions. And I think this is a threat that we've prepared specific activities that will not eliminate us from the market in 2030 and later. And the last threat, which is a bigger one that we've identified. This is the risk that the methane gas will be subject to the EU ETS System. This can be solved in a variety of ways. But depending on how that situation develops, we'll react appropriately. Now let me go on to a discussion of our strengths and opportunities where we have our own resource base. And so this gives us a stable base to operate for decades for each one of our mines. We have access to modern technology. We utilize the development of suppliers of machine and equipment. We're automating processes under the ground, below the surface, and we're open to utilize this technology to the fullest extent possible. We have stable and long-term relations with our biggest customers. In coal and coke, we're a credible partner. And this is very important to these customers that we're credible and will be credible over the upcoming years. So we have a high level of skill and confidence in terms of running mining work. This is a source of high costs, of course, in terms of our payroll or employee benefits, but at the same time, we're able to train our miners, our staff members, in terms of how to utilize resources better. So the coal as well as the equipment we have. And that means we have the safety to operate in the future. We can't hire people directly from temp agencies, and that's why we're investing in our human resources. Another major advantage we have is the ability to utilize the synergies that come from being in a mining and coking group. It's a huge advantage to our buyers that we have -- that we extract coal and that we produce coke. So that gives us a financial stability as well. And then we have stable delivery or supplies of coking coal to our own coking plants since we produce coking coal ourselves. And we will drive up the share of coking coal in our mining mix. And so this will determine how we'll utilize our coking capabilities. Then we'll diversify our revenue in the future. So we want to add a third segment on top of coking coal and coke. We want -- we're talking about methane, of course, and the produce of coke and also hydrocarbons. So in terms of the opportunities, we see a few things, several things in our mines, in our coking plants were located in Europe, where steel has produced high-quality steel, specialized steel is produced in Europe. And we also see that the EU protects the market, the steel market against cheap imports from third countries and this also represents a source of production for our plants. Over the years, JSW -- over the upcoming years, JSW will be pretty much the sole significant producer of coking coal because, of course, our Southern shareholders are still producing. But over the short term, they will shut down their operations. So we're the sole long-term stable producer of coking coal in the EU. We also tap into the advantages given by our geographic rent, our location. So we're close to our buyers. And so the cost of transport, the logistics are not a risk to us. They're really an opportunity for us to do stable planning in terms of the development of our mines and how we can sell our products. We're also developing technologies, utilizing methane. They're more and more efficient, less and less expensive. And so through combustion of methane, we're able to generate electricity and heat. This reduces greenhouse gases and that have a negative impact on the environment. So we can treat this as a separate source of energy. For years now, we can say that coking coal is a critical raw materials. It's important for the European industry to operate. And we're the sole producer of coking coal. So we have a long-term horizon of operations in front of us, because we have produced a critical raw material. If we look at energy, we're looking at the circular economy, and we're implementing solutions in the circular economy. And this is being done across the European industries, and we will be active in this area, and that's an opportunity for us as well. So from my side, I think that's about it. Perhaps at the end, if you allow me, Mr. Cudny, if I think about the coking coal industry in the coke industry and the green transition, we're approaching this responsibly. But as that film showed without coking coal, without coke, a transition towards a low-emission or zero-emission economy is impossible. So producing PV farms, onshore, offshore farms, electric vehicles without steel, it's not possible to do any of that. And that's the basis for our operations.

Thank you very much. Now we're going to respond to the questions that we've received. We have quite a few questions that have been asked. We have grouped them in several areas. Then we have the technical and operational area. I'd like to ask for Edward Pazdziorko to respond. The first question is, can we count on a higher run rate in 2023?

Well, let me respond to this, maybe not directly. In order to count on a higher run rate above all, a few things have to be prepared first. One is the resource base, which has to be explored properly along with the natural threats, have to be well understand and you have to have prophylactic works done properly. So we want to have a high standard of safety in the operations of business, and we want to make sure that our miners can operate safely in the face of these natural hazards and you have to have equipment that's been put in place that has -- that meets these technological requirements. So in our strategy, we assume that we'll achieve a run rate of 16 million tonnes starting from 2026. And so in 2022, we believe it's going to be 14.5 million tonnes. So if we look at the period from 2022 to 2030, every year, the run rate will increase in order to achieve that target. So we understand the various components, we have the staff in place. We'll maintain the standards of safety, and we're working on the future, looking at each year separately. So between '21 and 2022, we plan for an increase in the run rate took place -- to take place, and we also plan for that to take place into 2023.

Thank you. The question is when does the company plan to achieve the level of 80% coking coal in overall output to achieve your goal of exceeding 90%?

Well, I can tell you that in 2021, we did achieve that target of 80% in 2021. So as we dig deeper and have coal grades that are coking coal grades and through our investments, we're going to be able to increase the ramp up the percentage of coking coal. So we believe that we'll achieve roughly 84% in this year 2022. But if we talk about surpassing the 90% threshold, this is something that we plan in 2026.

How can you assume an increase in the run rate to 16.1 million tonnes and at the same time, assume that you'll have less corridor works, less tunneling works? For me, it seems a little impossible. How can -- will you have a technological breakthrough?

Well, I responded to that question a little bit earlier, that when we talked about our 10-year strategy, we have a stage where we would start to open up new levels, and that's why the amount of corridor works in general is much bigger at the beginning. So the first years, 2022, 2024, these are years where we'll have to set up the proper amount of corridor works. We'll gain access to various levels, and then from those levels, we'll gain access to [indiscernible]. And then we'll have the expansible mining pits, And then we'll be working on specific mining pits. If you look at Budryk and some of the other mines [indiscernible] or in the southern mines, the work done now will make it possible for us to plan a level of preparatory works that we'll be able to gain access to figure seems and with much longer long walls than we have up until now. And this means that we'll have proper level of production, where year-on-year, we'll be able to achieve a run rate -- the run rate that's been planned for in our strategy.

Thank you very much. Now we have a series of questions from the economic area. So this is a question to Robert Ostrowski. What is the level of total cost that you anticipate in 2022 year-on-year? And what sort of CAGR do you anticipate over the period of 2021 to 2030?

Well, that's a difficult question. But our plan, our strategy, our financial model was prepared at the end of 2021. So we can say that we would have relatively stable geopolitical position. Now things have changed. We're dealing with a new circumstance. No one could have anticipated that. And so there's an impact on the cost side. We can see how the armed conflict in Ukraine has contributed to destabilization of the market or instability in the market. So it benefited to some extent by some of the products not entering the marketplace but there's also the increase in the prices on the products offered by JSW. So if we look at the cumulative growth rate, so that's CAGR, that's we're in a transition period. So we were looking at constant prices at the end of 2021. And these are the assumptions that we've used in our financial model.

So what are the paths of change for the main cost components the company is expecting in the upcoming years? Or what sort of CAGR would you anticipate up to 2025 and beyond?

So this is quite linked to the previous question, my response is linked to the -- I don't want to reiterate my response. So I'd ask for a new question.

So what level of financial cushion, what you believe to be correct, do you need PLN 2 billion or PLN 3 billion on the side? And do you intend to pay down the loan from PFR in 2022?

So let me begin with PFR. We have 2 loans in our balance sheet. They have their amortization schedule, and we want to follow those amortization schedules. So we will not prepay those loans. If we look at the closed-end investment fund fees, so we had up to PLN 1.8 billion in that fund. So we had liquidity in the company secured by PLN 1.3 billion that we drew down from that fund when we had a market downturn. So we have funds in the cash pool, which is the cash generated by the Coke segment, but we also had loans provided by PFR at the end of 2020. Those were 3 elements that stabilized our profitability in the group and gave us the ability to function stable footing. Having in mind this experience, we want to rebuild our investments in the closed-end investment fund. So we made a decision to increase our allocation to that fund by PLN 700 million. So we're going to add up -- we had PLN 500 million we're going to add up to PLN 700 million. And as we have cash surplus generated by JSW, so the money that's on top of what we need to secure our operations in terms of our payments for taxes, employees and our third parties business partners. So we were able in the past to achieve PLN 1.8 billion. I think that's the minimum level that we'd like to achieve. So if we have bigger surpluses, then we're going to want to allocate that money to our closed-end investment fund.

If we look at the current prices for raw materials and commodities, you may generate huge amounts of financial surpluses. When do you think you might have some room to pay a dividend? Are there any out there strategic directions you could consider not mentioned in the publication about the strategy that you could consider in terms of strengthening your balance sheet?

The top goal we have as a management team is we want to have financial liquidity in the group by allocating financial surpluses to our closed-end investment fund. That's the matter of the future of the company. We do not plan in our plans any acquisition targets. We will not buy any mines or any companies from the domestic or international market. So let me have the second part of the question about the dividend. Do you think there's going to be room for a dividend? So ladies and gentlemen, this is a matter of a decision and management board recommendation, depending on the short-term situation, we do have a dividend policy. And as I've mentioned, so we have the contractual clause, the covenants in the loan with PFR as long as we have those loans from PFR, then we can't pay dividends, but doesn't mean that in subsequent periods, we wouldn't be able to think about dividends.

So what activity, not linked to your core business, will be generating a 10% of revenues in new business? And what will be the margin -- EBITDA margin in this new operations?

So we've talked about this core business for us, this is mining of coal, extraction of coal in our mines and the production of coke. These are the 2 segments. Then we want to create that third segment using hydrocarbons and we also want to utilize methane along with the PV farms to produce electricity. This will reduce costs on one hand. And at the same time, we'll be able to sell surplus electricity on the marketplace.

In what areas do you anticipate that you're going to be able to reduce your mining cash cost over the period to 2030?

I think there are 2 fundamental elements that will affect the mining cash cost over this period. The first thing, we want to optimize our operations, so operational leverage. On one hand, we want to increase the run rate to in excess of 16 million tonnes. On the other hand, we want to optimize headcount to the extent possible, while maintaining operational continuity. And every year, a few hundred employees retire. And of course, we'll replenish headcount, but we want to do that to the extent needed to maintain continuity and skills, but we anticipate that the headcount will decline over the period to 2030 to some extent.

What's going to happen with the cash conversion cost that they're going to grow so strongly in 2022 and further to 2030? Why is the case that the trend is different in CCC as opposed to the MCCC?

Here, the situation is different. On one hand, our coking plants, which have obligations to buy CO2 emission allowances, so we have assumptions that CO2 emission allowances will grow in price, and that's an assumption that affects the cash conversion costs. On the other hand, because we have planned modernization projects and renovation projects in our coking plants, so in 2030, we'll replace some production elements in the Radlin plant, which will reduce or constrict our ability to produce coke for a short period of time. And so at the end of the day, that means that between 2022 and 2030, we have an increase in the cash conversion cost of coke.

And the last question, you have net debt-to-EBITDA at a maximum of 3.3x. Does the company anticipate that coal and coke prices will bottom out in the short term? Or do you intend to take over some Polish assets or international assets?

I'll start with the second part. We do not intend to participate in any M&A activity. The net debt-to-EBITDA, as we have long-term contracts up until 2025, we don't assume when arranging new financing that we'll look -- we'll have that in mind, but this is going to be the benchmark for the covenants that will be in subsequent financing arrangements.

Okay. Thank you very much for your response. Thank you much -- very much, ladies and gentlemen. If you have any questions, after looking at our presentation, we'd asked you to post your questions or send them [indiscernible] to the Investor Relations department. At the end, I'd like to emphasize one thing in terms of the operations of our company in the environmental field. Having in mind the environmental strategy being incorporated within the business strategy, this is a signal of the responsibility taken by the Management Board that we're caring for the environment. We're fully aware that as we utilize the environment, we're somehow taking out a debt with respect to the future generations. We want to be able to repay that debt and enable future generations to development. So I'd like to thank you for your participation. I'd like for your preparation of the merits and the technical side of things. So thank you very much for your attention. [Statements in English on this transcript were spoken by an interpreter present on the live call.]