Lubelski Wegiel Bogdanka S A : Bogdanka’s Strategy as a response to market challenges

The Strategy presented by Lubelski Węgiel Bogdanka is a response to the challenges posed by Poland's 2040 Energy Policy. It is focused primarily on maintaining production capacity, high profitability ratios, respect for the environment as well as maintaining the position of an economic and social pillar of the region. The key to reaching those goals is diversification of the areas of business activity and simultaneous focus on two products - mining of coal for the power industry and selective extraction of coking coal.

Bogdanka actively takes part in discussions concerning the future of the hard coal mining sector, the purpose of which is to produce a new social agreement regulating mining until 2049 and determining the manner of transformation.

The Strategy's main objectives are to maintain production capacity and Company's high profitability ratios, selective extraction of coal type 34, diversification of revenue through increasing the areas of business activity, as well as identification, recognition, and documentation new coking coal (type 35) reserves.

- Regional stakeholders have precise expectations towards our Company, hence we would like to remain the economic and social pillar of the Lublin region. The market environment, on the other hand, poses new challenges to which we must actively respond. Stability of the Company's operations serves as a foundation for social safety of our employees. Therefore we present the Strategy which assumes continuity and transformation in our core business, as well as transformation outside of core business, that is diversification of revenue. Lubelski Węgiel Bogdanka wants to remain a dividend-paying company in the medium and long run, said Artur Wasil, President of the Management Board of Lubelski Węgiel Bogdanka.

According to the Company's vision Bogdanka will remain the efficiency leader in the mining sector with the highest work safety standards, who flexibly adjusts to environmental requirements and market conditions, and builds 'Green Deal' as part of diversification of business activity.

- The presented Strategy is in line with the government strategy concerning the restructuring of the mining sector. These plans are fully supported by the Ministry of State Assets and the government. Today we learned that Bogdanka will extract two products - power coal and coking coal type 34 and 35. Such plans guarantee that Lubelski Węgel Bogdanka will be the last mine to cease producing power coal and has a chance to become a place of work to those who wish to extract coking coal. It is an enormous challenge to turn Bogdanka into a two-product mine but I am certain that the miners of the Lublin region will successfully face it and those ambitious plans will be fully executed, emphasized Artur Soboń, Secretary of State in the Ministry of State Assets and Government Plenipotentiary for Energy Companies and Hard Coal Mining Transformation.

The updated Strategy announced by Bogdanka reflects the assumptions of Poland's 2040 Energy Policy and constitutes a link in the area strategy of the Enea Group until 2030 (under the 2035 framework) as it covers also activities to meet the assumed demand for thermal coal from power and cogen plants in the Generation Area of the Enea Group.

- LW Bogdanka is a strong link in the Enea Group. Bogdanka's updated Strategy remains in line with area plans of the Enea Group where LWB is responsible for the Group's mining area. It is necessary to include dynamic market changes into Bogdanka's development plans as they strongly influence Polish energy generating sector. Diversification of production, maintaining profitability and taking into account the vital role of LWB in the economy of the region is the future of Bogdanka, said Paweł Szczeszek, President of Enea.

The Company also assumes an increase in the share of revenue from initiatives outside of core business up to 30% until 2040. The change of revenue structure will be made in stages (5% in 2025, 10% in 2030).

- The presented Strategy assumes continuation and diversification. It's main objective is to maintain production capacity, Compny's high profitability ratios, selective extraction of coal type 34, diversification of revenue through increase in areas of business activity, as well as identification, recognition, and documentation new coking coal (type 35) reserves, said Dariusz Dumkiewicz, Vice-President of the Management Board, Development.