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A Longwall Upgrade Contract in Poland Plus Major Roof Support Orders in the US and Russia Boost FAMUR's 2021



By Paul Moore

September 5, 2021 - Despite an uncertain long term future for coal mining in Poland, and a diversification of its business activities into solar power in the form of large-scale photovoltaic projects, the country’s leading mining equpiment company FAMUR SA continues to book impressive mining equipment orders at home and in its growing export market. Two export contracts booked in August in particular are a major boost following flat H1 2021 results, which saw revenues of PLN518 million, some 9% lower compared to the same period in 2020.

In April 2021, FAMUR signed a $16.5 million contract with the leading private coal mining operation in Poland, LW Bogdanka for both upgrading of existing machinery and delivery of new longwall system equipment. Bogdanka’s operations are also the most advanced in terms of equipment and the most productive in the country. Artur Wasil, the President of the Management Board of LW Bogdanka recently stated: “The company will aim to become the most cost-efficient producer of thermal coal in Poland, who can successfully compete with other coal producers and suppliers while maintaining the current production potential under the 2040 framework by adjusting to requirements of Poland’s energy transition.” Bogdanka also plans to seize the opportunities offered by its mining licence for the Ostrów and ‘K-6, K-7’ deposits. “The use of new deposits from the existing infrastructure allows the company to assume maintaining the production level of 8.8 Mt, on average, in the 2040 framework, while in 2021-2025 it shall amount, on average, to 9.7 Mt.

In August, there was major news when American company Century Mining LLC confirmed the acceptance of the offer of FAMUR SA for the supply of powered roof supports. This is the first time that a Polish mining equipment manufacturer will have supplied such equipment directly to the United States. “This agreement opens up a new, extremely demanding market for us and proves that we are one of the world’s leaders,” said Miros?aw Bendzera, President of FAMUR SA. Famur’s powered roof supports will be delivered to the newly built Longview coking coal mine in West Virginia, in the eastern part of the United States. Beforehand, prototype sections of will be tested to verify compliance with the high American durability standards. The $28 million order completion date is the first quarter of 2023.

Also in August 2021, FAMUR and Russia’s AO ‘SUEK-Kuzbass’ signed an agreement for the supply of a section of a powered roof supports to the WD Jalewskowo mine. The total value of the agreement is EUR20 million. The scope of the concluded contract provides for the delivery of a section of powered roof supports for operation in Russia. According to the agreement schedule, the delivery is divided into two stages. The final completion date is in the first quarter of 2022. This is just the latest agreement concluded between the FAMUR Group and AO ‘SUEK,’ which FAMUR said “confirms the high quality of machinery and equipment supplied by the Polish company.”

FAMUR Group now has customers in more than 40 countries on five continents. Recently, the company has also secured significant contracts in Kazakhstan and China amongst others. In the near future, the group plans to further develop its export sales. And its presence in other markets like industrial minerals is also growing – as an example the company will provide an Italian mining customer with a new roadheader; the machine having been specially designed and adapted to work in a gypsum operation. The TR-2000 as it is called, is a cousin of the highly successful R-2000.

Onto the diversification topic – the planned phasing out of the coal mining industry in Poland by 2049 and ‘Poland’s Energy Policy until 2040’ adopted by the Council of Ministers in February 2021 envisage, among other things, that the share of coal in Poland’s energy mix will be reduced to approximately 11% by 2040 under the high CO2 price scenario (from 69% in 2020). As a major part of the FAMUR Group’s revenue is generated from sales to the Polish thermal coal mining industry (approximately 64% in 2020), the Management Board of FAMUR have modified its strategy. This includes evolving into a holding that invests in green transition projects, in the first place by entering the segment of photovoltaic projects offering end-to-end solutions for the B2B market; plus generating cash from the mining assets by concentrating on the most profitable and stable product areas and continuously adapting the structure of operating assets to the directions of Poland’s  energy transition, while retaining the competence and know-how to be able to participate in selected mining projects in Poland and export markets on an opportunistic basis.