Benefits from the 4E strategy after 2 years of its application

This summary presents the key achievements of this period from the “4E” perspective. A video summarizing the Strategy after two years is available on our website.

• Carried out investment activities to maintain domestic mining production at the level of 450 thousand tonnes of Cu in ore and the annual average metallurgical production at the level of 540 thousand tonnes,
• The Revolving-Casting-Refining (RCR) Furnace in the Legnica Copper Smelter improved the division’s capacity to process materials purchased from third parties and increased the overall production capacity.
• Energy reviews in all Divisions and the Head Office pointed to new areas for energy savings projects in accordance with the Energy Management System.
• Built the competence to develop the power engineering area, including RES (investments in photovoltaic power plants in Legnica Copper Smelter, Głogów Copper Smelter and the Piaskownia Obora Sandpit).
• Increased the efficiency of tailings storage in the Żelazny Most Tailings Storage Facility expansion project, by building the Southern Quarter.
• Used external sources to co-finance research and innovation projects.
• Built an effective and diverse organisational culture based on KGHM Group’s values.
• Streamlined the Group’ structure, by ensuring a more efficient use of its potential from the viewpoint of the operation of the entire Group.
• Maintained cost discipline and introduced saving initiatives.
• Achieved higher efficiency of financing through diversification of its sources and adaptation of the financing to the needs of the Group.
• Took action to shorten the receivables turnover and extend the liability turnover period (by using debt factoring).
• Ensured continuous and secure availability of factoring for the Group.

• Introduced smart solutions to enhance employee safety.
• Implemented the same OSH procedures in Group companies and KGHM Polska Miedź S.A. divisions, including a uniform occupational safety management system for all assets of KGHM INTERNATIONAL LTD.
• Took numerous actions as part of the “Copper Heart” employee volunteerism program.
• The Group paid corporate income tax to the state budget and to local budgets: approx. PLN 400 million per year.
• The Group paid tax on extraction of certain minerals to the state budget: approx. PLN 1.5 billion per year.
• Created development and training opportunities for employees, in the form of various training courses, development programs and HR projects (e.g. “4E Skills Academy”).
• Implemented new installations compliant with the BAT (Best Available Techniques) conclusions for the non-ferrous metals industry.
• Made investments in renewable energy sources (RES), mainly development of photovoltaic plants.
• Developed electromobility – electrical passenger cars and off-road vehicles are being tested; as part of the replacement of machinery resources, diesel engines in SMG are being replaced with low-carbon ones.
• Extended the non-financial reporting area to ensure consistent internal and external communication in the Company.
• Achieved high standards of active communication with the market and investors.

• Ensured consistent management of the deposit and mining operations, adapting them to the geological structure.
• Optimised metallurgical production – an RCR furnace in the Legnica Copper Smelter, a roasting furnace in the Głogów Copper Smelter.
• Introduced a new financing structure, changing it from a long-term to a short-term one.
• Consolidated procurement programs and digitalised logistics operations.
• Ensured efficient planning and execution of overhaul downtimes.
• Increased electricity production from our own sources.
• Pursued the Implementation Doctorates program and other programs in cooperation with higher education institutions and research institutes and oriented towards improvement of the operation of the core production business.
• Took measures to bridge generation and competence gaps, by carrying out the “Competent in the mining-metallurgical sector” program in cooperation with the Ministry of National Education.
• Continuously broadened employee competences through adaptation and development projects.

• Launched the pilot of the “Localisation system of people and machinery in underground mines”.
• Developed the “Broadband data transmission in underground mines” in mining divisions.
• Developed the “Centre of Advanced Data Analysis (CZAD)”: the application of algorithms to the analysis of belt conveyor loading in mines has been tested.
• Developed the “Robotisation of production and auxiliary processes”: started the construction of a CuXRF robot for scanning for copper content at the working faces in mines.
• Implemented projects associated with the National Cybersecurity System and improvement of the IT security of the Group.
• Developed a Project Management System (PMS 2.0.).
• Promoted digitisation, automation and circulation of electronic documents and information in areas such as: administration, logistics, procurement, IT, legal service, data archiving, HR and payroll, communication and PR, contracts and agreements, finance management, properties.
• Developed IT technologies for accumulating and transferring knowledge in the Group and archiving research and project documentation in the area of invention and patent proceedings in the 1959-2020 period.