Bogdanka's strategy as a response to the challenges of transition
Lubelski Węgiel Bogdanka has published a new strategy for 2023-2030 with an outlook until 2040. The document outlines the key directions of development and transition for Bogdanka. The Company aims to create an innovative multi-commodity concern to drive green transition and secure the economic development of the Lublin region.
Lubelski Węgiel Bogdanka's new strategy is based on 5 pillars. The first is a strong coal foundation, in which Bogdanka remains the efficiency leader in coal mining until the end of the mine's existence. The four others are: Multi-commodity Concern, Sustainable Energy Guarantor, Green Transition and Future of the Lublin Region.
Through consistent implementation of the strategy to maintain a high level of production, by 2030 Bogdanka wants to generate funds that will allow for investments related to the multi-commodity area. The Company plans to invest PLN 8.6 billion over the next 8 years, almost half of which will be in new business areas.
We want a strong multi-commodity concern to be established here, in the Lublin region, in the coming years, so that Bogdanka can remain the driving force of the region for the next 40 years. Our new strategy is primarily a response to the challenges posed by the broader energy transition. We want to naturally take advantage of the fact that we are an efficiency leader in coal production. This foundation will allow us to finance our transition projects. We will use our mining competencies to diversify Bogdanka's operations towards the extraction of critical raw materials not only in the region, but also in Poland. By investing in renewable energy sources, Bogdanka will also become a guarantor of sustainable energy supply, both for its own needs and for the entire region. We will undertake all these activities with respect and care for the environment. We are driven by concern for the development of the region and care for the people. Because people are Bogdanka's strength and greatest asset. With this strategy, we want to provide a place to work for the next generations of the Lublin region.
said Kasjan Wyligała, President of the LW Bogdanka Management Board.
Bogdanka's strategic role makes the Company a guarantor of energy security and sovereignty not only for the region, but also for central and eastern Poland. Despite the fact that we are a leader among all Polish coal companies, we are nevertheless still working to optimize our operational efficiency. We are constantly making sure to strengthen the efficiency and profitability of our core business. This will provide us with stable financing for planned strategic initiatives. We will continue to invest in innovative solutions, in particular in the areas of rock mass monitoring, improved safety and ergonomics, and smart mine management systems. Cash flows will allow us to implement Strategic Initiatives with constant monitoring of available support mechanisms, as well as to remain a dividend company with payment of up to 50% of the Company's net profit as is the case now. We estimate that the Company's cumulative revenues will reach almost PLN 100 billion by 2040.
said Artur Wasilewski, Vice-President of the Management Board for Economic and Financial Affairs at LW Bogdanka.
Bogdanka estimates that nearly PLN 20 billion will be generated by the areas related to production, installation and recycling of RES components.
The prospect of 2049 means that there are currently no plans for investment in new coal-based generating units in Poland. This necessitates the search for new non-coal sources of income for Bogdanka. Given that approx. 70% of energy in our country still comes from coal, one should assume that only large-scale renewable energy sources can bring about a significant change in the energy mix and significant decarbonization of the Polish economy in the relatively near term. Therefore, one of the important new pillars of the Company's development is investment in renewable energy installations, i.e.: windmills, photovoltaic farms, energy storage, as well as in the entire value chain - from component production, through energy generation, energy storage to recycling of waste photovoltaic and electric batteries. We believe that the areas of production, installation and recycling of RES components will generate up to PLN 20 billion by 2040. We plan to develop RES in several stages. A 3MW photovoltaic farm near Bogdanka will soon be put into operation, while tender processes for another 27MW have already been launched. Our goal is to meet 10% of the Lubelskie Voivodeship's annual electricity consumption by 2030.
said Dariusz Dumkiewicz - Vice-President of the Management Board for Sales and Investments at LW Bogdanka.
The Company wants to capitalize on its experience in mining and the growing potential of the commodity market, particularly critical raw materials. This makes Bogdanka see the multi-commodity approach as an attractive path to diversification. The Company plans to spend PLN 50 million in the coming years on exploration, appraisal drilling and other work to arrive at an investment decision. Currently, after expert analysis in this area, Bogdanka has tentatively identified 11 raw materials and more than 20 potential locations where it will carry out advanced analyses.
As part of the Multi-commodity Concern, the Company also plans to establish a Fund to invest in new technology projects related to our current and future operations. In addition, Bogdanka wants to tap the intellectual potential of Lublin's universities and entrepreneurs.
Bogdanka's new strategy is not just focused on the "here and now." Preserving jobs and economic potential in the region - this is the essence of our plan in the context of the future of the workforce and the entire region of Central and Eastern Poland. We want to do it wisely, through business diversification, acquisitions and development projects. We want to create stable jobs in the region in the future. As part of the new strategy, we will launch programs aimed at attracting and retaining our best employees. But in parallel, we will implement new measures that are so important for any mine, namely investments to increase the level of occupational safety. We want to implement re-branding programs to successively and friendly prepare employees for the distant but imminent closure of hard coal mines. Implementing responsible business practices and ESG issues throughout the value chain will also be a our priority in the new strategy. Our goal is to maintain a stable level of employment in the core business until 2042. As of today it is almost 5,000 people.
said Adam Partyka Vice-President of the Management Board for Social and Labor Affairs.
Bogdanka is synonymous with stability and development. The Company's new strategy is an effective response to the challenges of our times and will allow Bogdanka to be the region's leader for the next 40 years.
Lubelski Węgiel Bogdanka S.A. is a leading hard coal producer in Poland that stands apart from its peers in terms of its modern and efficient mining. It is one of the largest Polish hard coal mines. Lubelski Węgiel Bogdanka S.A. chiefly conducts mining operations in terms of hard coal extraction, enrichment and sales. It supplies this raw material mainly to industrial offtakers. Supply contracts are long-term, and the product is sold to the commercial power sector and the industrial power sector.
The company has been listed on the Warsaw Stock Exchange since June of 2009. In August 2022, Lubelski Węgiel Bogdanka S.A. returned to listing on the WIG-ESG Index.
Since October of 2015 Bogdanka has been a member of the Enea Group, the second largest player on Poland’s electrical power market in terms of the generation of electricity, which manages the entire value chain on the electricity market ranging from fuel to the generation of electricity, distribution, sales (supply) and customer service.