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

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

In December 2020, two years passed from the adoption and approval by the Supervisory Board of the Update for the KGHM Polska Miedź S.A.’s Strategy for 2019-2023.

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.

Key achievements of the KGHM Polska Miedź S.A.’s Strategy for 2019-2023 after two years of pursuing it


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

  • 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.
Ecology, safety and sustainable development

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

  • 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.

We adapt our activities to changes in our environment

  • 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.

We implement the idea of Industry 4.0., we are striving towards automation and robotisation of production, we are digitally transforming the KGHM Group, we are building a knowledge-based society

  • 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.

With respect to domestic companies, the main goal of the development intent is to ensure continuity of operations and occupational safety within the KGHM Polska Miedź S.A.’s core production business and to integrate the Group around the sustainable development concept, which included implementation of growth initiatives consistent with the Circular Economy concept in order to reduce the Group’s adverse environmental impact. In the case of the international part of the Group, the Company is concentrating on maximising the value of its asset portfolio.

In terms of the development directions adopted in the Company’s Strategy, investments focus on projects leading to improved efficiencies in the core production business. The investment policy of KGHM Polska Miedź S.A. is based on advancing the Company’s five-year investment plan, enabling execution of the long-term production plan.

The Company continues to advance key mining and metallurgical investments, such as:

  • The Deposit Access Program (Deep Głogów along with access and development tunnels)
  • Development of the Żelazny Most Tailings Storage Facility
  • Investment projects supporting drainage of the Polkowice-Sieroszowice Mine
  • Investment projects adapting metallurgical installations to BAT conclusions for the non-ferrous metals industry and to restrict emissions of arsenic (BAT-As)
  • Projects optimizing the utilisation of Legnica Hybrid Smelter’s production capacity (using the existing infrastructure and expanding it to increase its processing of scrap)
  • Investment projects related to replacing equipment and optimisation at the Głogów I Copper Smelter and Refinery

In addition, with respect to development of the domestic resource base, the Company conducted further exploration work under the existing concessions for deposit prospecting and exploration.

The directions adopted also include the advancement of actions under the circular economy concept. Additionally the Company continues to engage in the work on new smart technologies and production management systems based on online communication between elements of the production process and advanced data analysis, in accordance with the assumptions for the KGHM 4.0 Strategic Program.

The Company is also intensifying actions aimed at improving energy efficiency through investments in its own generating capacity, in particular those which have little to no emissions. Investment projects were also commenced in the photovoltaic energy sector. In accordance with the current Strategy of the Group for the years 2019-23, it is expected that by the end of 2030, 50% of KGHM Polska Miedź S.A.’s demand for electricity is to be met by its own sources of energy generation and renewable energy sources.

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