Top EU miner faces uphill battle to tame accelerating cash burn

JSW SA has asked Poland’s social security office to allow it to delay this year’s payments in the latest sign of the struggles the European Union’s biggest coking coal miner is facing as it burns through more cash amid dwindling prices and rising costs.

The state-controlled company wants the authorities to let it pay the 1.3 billion zloty ($345 million) due this year in installments starting in January 2026, it said in a statement on Friday. It’s the second time this week that the miner of coal for steel production is seeking financial relief from public institutions. On Monday, it said it would apply for a 1.6 billion zloty refund from the country’s power price subsidy fund.

The board is closely monitoring the financial and liquidity situation and is taking a “range of steps to avoid liquidity shortage,” JSW deputy chief executive officer Remigiusz Krzyzanowski said at an earnings call on Wednesday, when asked if the firm is prepared for cash shortage at the end of the year.

In November, the company employing more than 32,000 people announced an ambitious plan to trim investments and costs, while boosting production. Even as it has made some progress, JSW is still tapping its rainy-day fund to improve cash flows. Only this year, it has paid out 2.2 billion zloty from the fund.

The scale of the efforts to slash costs is “definitely too small,” according to Erste Group Bank AG’s analyst Jakub Szkopek, who predicts that JSW continued to consume “significant” amounts of surplus cash in the first quarter. The company is due to release its earnings report for the January-March period on May 20.

“Within two or three quarters the cash reserves will run out and the situation will become bleak,” Szkopek warned in a note earlier this week.

JSW shares rebounded from a 3.6% decline on Friday and were little changed at 1:20 p.m. in Warsaw, taking this week’s gain to 2.1%.

(By Maciej Martewicz)