Integrated Report of KGHM Polska Miedź S.A.
and the KGHM Polska Miedź S.A. Group
for 2020

Summary of 2020

The KGHM Polska Miedź S.A. Group is a global, innovative organisation involved in technologically advanced exploration, mining and smelting operations. For several decades, the Company has been mining and processing valuable underground resources, supplying the world with products that enable its sustainable development.

The Company’s history began in 1957 with the discovery of one of the world’s largest deposits of polymetallic ores, predominantly copper and silver, located in south-western Poland. The deposit has been effectively and rationally mined to this day. As the years went by, the KGHM Polska Miedź S.A. Group grew its business significantly both in terms of products and the market. Today, KGHM Polska Miedź S.A. is present on four continents: in Europe, South America, North America and Asia. It employs over 34 thousand staff worldwide who believe that what they do on a daily basis is significant for the world. Owing to their knowledge, courage and responsibility, the KGHM Polska Miedź S.A. Group produces valuable products, predominantly metals. Its core business is the production of copper along with other non-ferrous metals. The Group is one of the world’s top producers of copper and silver. It also produces gold, molybdenum, nickel, rhenium, lead and platinum. The high quality of the copper, silver and other products have been confirmed by certificates awarded by various international commodity exchanges. By adopting a responsible approach, the KGHM Polska Miedź S.A. Group sets a good example for others, acting in accordance with its values in a transparent and socially responsible manner.

Copper - a strategic material in a carbon neutral and circular economy

in a circular economy
Nearly 50% of copper produced in the EU is obtained through recycling
GHG emissions
While adding 0.4% GHG, copper contributes to reducing ~75% of emissions in EU society
Amount needed in the years 2020 – 2050 to make the European economy climate neutral
of valuable metals
Copper metallurgy is needed to handle and recover many other valuable materials present in electronics, batteries, etc.
Half a million
Employed in the production and processing of nonferrous metals in Europe
Green Energy
sustainable transport
Copper’s innovative potential: wind turbines, photovoltaics, energy distribution and storage; electric cars and charging point infrastructure

Raw materials a key to sustainable development as well as care for the environment

And ensuring life’s comforts to employees and society

In working towards our goals we concentrate on creating added value while at the same time ensuring solid and lasting foundations for the business and its people as well as successes in the long term.

We want to wisely invest our profits in newtechnology, innovative solutions, best available practice and employee development. We are aware that the sustainable development of the raw materials sector has become a global challenge for the modern world.

We operate based on the principles of sustainable development, reflecting in our daily activities obligations tied to such areas as Society, the Environment, the Economy, Safety and Resource efficiency.

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Summation of the year 2020 in the KGHM Group

Main macroeconomic factors and aspects of the Group in the age of the COVID-19 pandemic compared to 2019

Macroeconomic environment*


Copper price


Silver price


Stronger USD vs the PLN

*Macroeconomic data – average for the period

Production and C1 cost


Copper production


Silver production


C1 cost

Financial results


Increase in revenues to PLN 23 632 mn


Increase in EBITDA** to PLN 6 623 mn

**Adjusted EBITDA

Summary of the year in the KGHM Group
Selected key statistics for 20201

The financial situation of the KGHM Group remains stable and safe

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1) Sum of costs of extraction, floatation and metallurgical processing per cathode, together with support functions and cathode selling costs, adjusted by the value of inventories of halffinished products and work in progress, less the value of anode slimes and divided by the volume of electrolytic copper production from own concentrates​.
2) Capital expenditures – excluding costs of borrowing, leasing per IFRS 16 unrelated with an investment project and development work – uncompleted; Other expenditures – acquisition of shares and investment certificates of subsidiaries and associates and loans granted
3) Reflects an adjustment of assumptions pursuant to regulatory filing 9/2020 dated 12 May 2020
4) Adjusted EBITDA for 12 months, to the end of the reporting period, excluding EBITDA of the joint venture Sierra Gorda S.C.M
5) Level of net debt/EBITDA ≤ 2 related to the Financial Liquidity Policy adopted by the Company and is not part of the budget assumptions of KGHM for 2020

We care, we act, we protect

Effectively fighting the spread of the coronavirus

Initiatives & procedures

  • COVID-19 unit at the hospital MCZ
  •  Two temporary hospitals in Legnica and Wałbrzych
  • Help for seniors
  •  Home office and restricted contacts
  • Protective procedures

Preventative methods

  • Thermal cameras
  • NITROSEPT disinfectant liquid
  • Disinfection and masks in common-use areas and during transport
  • Personal safety measures when travelling into/out of the mines

Communication & education

  • Numerous communication channels
  • Continuous announcements on internal procedures and sanitary services guidelines
  • Billboards, educational films, handouts, newspapers and company TV
  • Special Infolines for employees

Employee safety as a strategic priority for the KGHM Group

Summary of 2020

Safety and development
  • ISO 45001:2018
    Granting of an Occupational Health and Safety Management System Certificate
  • Leader’s Gold Card of Workplace Safety
    A 29% decrease in the number of recognised workplace accidents to 213 at year’s end
  • Historically-low accident ratio
    Thanks to the outstanding behaviour and commitment of all employees

Change in LTIFR y/y in KGHM Polska Miedź S.A



* LTIFR (Lost Time Injury Frequency Rate);  TRIR (Total Recordable Incident Rate)

Key elements of the strategy advanced in 2020


  • High production from domestic Stability assets (mined production 442 kt; metallurgical production 560 kt)
  • Stable production from international assets (Sierra Gorda 81.8 kt; Robinson 47.4 kt; Carlota 5 kt; Franke 12.5 kt; Zagłębie Sudbury 2.1 kt)
  • Continuation of projects aimed at automatisation


  • Continuation of the Deposit Access Program (GG-1 shaft reached a depth of 1231 m)
  • Continuation of Development of the
    Żelazny Most Tailings Storage Facility
  • Continuation of exploration projects in Poland
  • 22.42% of the general energy consumption of KGHM was supplied by its own internal sources and by developing RES
  • The capacity to base 35% of production on purchased metalbearing materials was achieved


  • Continuation of the CuBR venture
  • Continuation of Implementation Doctorates Program
  • Advancement of R&D work
  • Start of initiatives related to testing EV mining machinery
  • Continuation of projects financed
    under KIC Raw Materials and Horizon


  • Enhanced Energy efficiency
  • Continuation of digital transformation under the KGHM 4.0 Program
  • Optimisation of the international assets portfolio
  • Work on improving support processes efficiency

People and the

  • Actions to adapt to BAT Conclusions (incl. the BATAs Program dedicated to restricting emissions of arsenic)
  • Continuation of the Occupational Health and Safety Program (LTIFR: 7.31, TRIR: 0.52)
  • Implementation of the new BHP ISO 45001:2018 standard in the Company’s Divisions
  • Intensification of actions to fight COVID-19

Financial Stability

  • Greater use of factoring
  • Optimisation of the financing structure
  • Basing the Group’s financing structure on long-term instruments
  • Effective market and credit risk
    management in the KGHM Group

Strategy – actions to protect our climate

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Strategy execution after 2 years - summary


We are adapting our activities to changes in our environment

  • Consistent management of deposits and extraction
  • Optimisation of metallurgical production – RCR furnace at Legnica, the concentrate roaster at Głogów
  • New financing structure – from shortterm to long-term
  • Increased power generation from internal sources​
  • Actions were undertaken to eliminate generational gaps – HR programs
  •  Employee skills raised through adaptive and development projects
  • Reviews of international assets

Our response to increase in competitiveness in the
production and mining sector and Industry 4.0.

  • Domestic mine production remains at the level of 450 kt of copper in ore; average annual metallurgical production at the level of 540 kt
  • RCR furnace in Legnica – increased production capacity and the capability to process purchased materials
  • Skills raised in energy development, including RES
  • Development of the Żelazny Most Tailings Storage Facility by building the Southern Quarter
  • External sources to finance R&D projects
  • Financial efficiency increased – diversification of sources and adaptation of financing to the KGHM Group’s needs ​

We rely on electromobility, the development of proecological regulations, the Circular Economy and
environmentally-friendly production in accordance
with the highest safety standards

  • Improved safety statistics in Poland and abroad
  • Intelligent solutions introduced to enhance employee safety
  • Numerous actions taken under the „Copper Heart” employee volunteer program
  • Corporate income taxes paid by the Group to National and local budgets – around PLN 400 million annually
  • Minerals extraction tax paid to the State budget – around PLN 1.5 billion annually
  • New installations, in accordance with BAT (Best Available Techniques) conclusions for the nonferrous metals industry
  • Investments in renewable energy sources (RES), mainly in developing photovoltaics
  • Electromobility – tests of electric personnel and terrain vehicles; a switch from diesel engines to lowemission vehicle engines in the machinery park

We are implementing the idea of Industry 4.0., striving
towards automation and robotisation of production,
carrying out the digital transformation of the KGHM
Group and building a knowledge-based society

  • Pilot version of a „System for locating persons and machines in the underground mines”
  • Development of „ Broad-band data transmission in the underground mines”
  • Development of the „Centre of Advanced Data Analysis (CZAD)”
  • Development of the „ Robotisation of production and auxiliary processes” -construction commenced on a CuXRF robot for scanning for copper content at the working faces
  • Development of information technology to collect and transfer knowledge within the KGHM Group
  • A new company – KGHM Centrum Analityki in Zielona Góra – R&D in the area of BigData to analyses industrial processes
  • Projects related with the National Cybersecurity System and strengthening IT security within the Group

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