GRI Indexes:

Who are we?

We are a global, innovative organization involved in technologically advanced exploration, mining and smelting operations.
We have a geographically diversified portfolio of mining projects. Our assets are located on three continents – Europe, North America and South America. The Company operates in compliance with the highest environmental standards and legal regulations. The achievements of KGHM Polska Miedź S.A. in the area of corporate social responsibility are widely recognized everywhere where the Company’s operations are located. The employees are KGHM’s most valuable asset.

The KGHM Group comprises over 70 entities located on three continents: in Europe, North America and South America, employing more than 33,000 people.

Some of our subsidiaries form their own groups, the largest of which, both in terms of the number of entities and level of capital, is Capital Group KGHM INTERNATIONAL LTD. (KGHMI) with its main assets located in Canada, the USA and Chile. It comprises 25 subsidiaries (including KGHM INTERNATIONAL LTD.).

In 2016, the KGHM Group also had interests in three joint ventures:
Sierra Gorda S.C.M., Elektrownia Blachownia Nowa sp. z o.o. w likwidacji and NANO CARBON Sp. z o.o.

KGHM Polska Miedź S.A. shares are listed on the Warsaw Stock Exchange.

KGHM Polska Miedź S.A. is a multi-plant enterprise comprising the Head Office and ten plants: three mining plants (ZG Lubin, ZG Polkowice-Sieroszowice, ZG Rudna), three copper smelters (HM Głogów, HM Legnica, HM Cedynia), an Ore Processing Plant (ZWR), a Hydro-Engineering Plant, a Mine-Smelter Emergency Rescue Unit and a Central Information Processing Center.

Scope KGHM Polska Miedź S.A.’s operations

Our organizational structure

KGHM Polska Miedź S.A.
Type of activities Mined and metallurgical metals production
Cu, Ag, Au
Main production assets
Underground mines:
- ZG Lubin
- ZG Polkowice-Sieroszowice
- ZG Rudna
Copper smelters and refineries:
- HM Legnica
- HM Głogów I
- HM Głogów II
Walcownia HM Cedynia
Main development projects
- Deep Głogów

- Pre-production and exploration projects in south-west Poland
KGHM INTERNATIONAL LTD.
Type of activities Mined metals production:
Cu, Ni, Au, Pt, Pd
Main production assets
- Robinson mine in the USA (surface)
- Morrison mine in the Sudbury Basin in Canada (underground)
- Franke mine in Chile (surface)
Main development projects

- Victoria project in the Sudbury Basin in Canada – construction of an underground copper and nickel mine
- Ajax project in Canada – construction of a surface copper and gold mine, processing plant and associated infrastructure
Sierra Gorda S.C.M.
 Type of activities Mined metals production:
Cu, Mo, Au, Ag
Main production assets
Sierra Gorda mine in Chile (surface)
Main development projects
Sierra Gorda Oxide

The KGHM Polska Miedź Group’s operations relating to prospecting and the exploration of copper, nickel and precious metal ore deposits are based on concessions to explore deposits in Poland held by KGHM Polska Miedź and on legal titles to prospect and mine these raw materials in the USA, Canada and Chile held by KGHM INTERNATIONAL LTD. and KGHM AJAX MINING INC.

GRI Indexes:

Our values

All our activities are guided by values we believe are important. KGHM’s values shape the decisions we make at every level of the organization and justify the choice of changes and improvements implemented. In addition, they ensure consistency and a clear vision of the future.
ZERO HARM
We are all jointly responsible for our safety.

We protect the lives and health of our employees. We respect the natural environment and the local communities in which we operate. Our Company’s stability and long-standing sustainable development includes the safety of our employees, the local communities and other stakeholders of KGHM.

TEAMWORK
Cooperation is the keystone of our success.

Our Company’s stable growth over many years is largely the result of teamwork. The work of teams of people, their experience and, most importantly, their ability to share knowledge make it possible for us to meet our goals, develop the Company and optimistically anticipate all that the future brings. Teamwork also creates opportunities to learn more about ourselves, build close relationships within the Company and open ourselves to diverse opinions and cultures.

RESULTS DRIVEN
We achieve results while focusing on KGHM’s long-term success.

We set ourselves ambitious targets and meeting them requires our continuous development. This is possible thanks to the capacity and tools available in the Company, as well as making use of our accumulated knowledge. Our ability to adapt to changes and the continuous investment in people and resources are the keys to our Company’s success.

ACCOUNTABILITY
We are jointly responsible for the actions taken for the benefit of our stakeholders.

We build trust in the environment in which we operate by acting in a responsible manner. We take full responsibility for our actions. We follow a good neighbor policy. In this way, we set a good example, keep our promises and establish long-term relationships, built on trust, with our social partners.

COURAGE
We face new challenges in a well thought-out manner.

We are determined, creative and open to the world and ourselves. We are not afraid of being criticized or having internal discussions, because this is the only way we can develop. Therefore, we take up courageous and well thought-out challenges. We are successful.

KGHM is a global company open to new directions of development, with rich traditions in mining and metallurgy. Today, as a company of considerable size, KGHM can have an impact on the well-being of communities, regions and even countries—our values help us do so in a wise and responsible way.

Key financial and non-financial data

Important data - KGHM Polska Miedź S.A.

 Production capital
 
2016
2015
C1 cost
1,30M PLN
1,47M PLN
Payable copper
535,6kt
574,3kt
Copper wire and rod Cu OFE and CU Ag
267,4kt
263,7kt
Round copper billets
13kt
12,7kt
Metallic silver
1 191t
1 283t
Gold
3 540kg
2 703kg
 NATURAL CAPITAL
 
2016
2015
Total direct and indirect greenhouse gas emissions by weight (in tonnes CO2 equivalents)
3 425 024tCO2
3 889 891tCO2
Total water withdrawal from external sources
22 425 024m3
24 084 614m3
Total weight of waste
31,2M t/year
31,3M t/year
Recovered
20,4M t/year
20,3M t/year
Landfilled
10,8M t/year
11,1M t/year
 SOCIAL CAPITAL
 
2016
2015
Donations of the KGHM Polska Miedź Foundation to organizations and institutions
13,2M PLN
21,2M PLN
Sponsoring expenditure (sports, culture, science)
26,6M PLN
33,6M PLN
Corporate income tax
735,5M PLN
779,7M PLN
Minerals extraction tax
1 337,8M PLN
1 438,8M PLN
 HUMAN AND INTELLECTUAL CAPITAL
 
2016
2015
Total number of employees
18 266
18 155
Number of employees who participated in a single training event
31 133
31 730
Number of accidents
370
298
Fatal
13
3
Severe
2
2
LTIFR*
12,7
10,2

* LTIFR - Loss Time Injury Frequency Rates, total number of accidents / total number of worked hours x 1M

Key figures – the KGHM Group

* The Group defines adjusted EBITDA as profit/loss for the period pursuant to IFRS, excluding inocme tax (current and deferred), finance costs, other operating income and costs, the share of losses of joint ventures accounted for using the equity method, impairment losses on interest in a joint venture, depreciation/amortisation, impairment losses on property, plant and equipment included in the cost of sales, selling costs and administrative expenses.

Key figures – KGHM INTERNATIONAL LTD. and Sierra Gorda S.C.M

 Production capital
KGHM INTERNATIONAL LTD.
 
2016
2015
Payable copper
89 828t
97 608t
Payable molybdenum
362t
440t
TPM
2 612,2kg
2 963,9kg
Nickel
2,1tys. t
2,2tys. t
Sierra Gorda S.C.M.*
 
2016
2015
Payable copper
51 542t
46 329t
Payable molybdenum
5,513t
3,765t
TPM
713,3kg
709,8kg

* The production data for the Sierra Gorda S.C.M. presents 55% of actual production due to the percentage of shares in the Company held by the KGHM International Ltd. The social, human and natural capitals present 100% data for the Sierra Gorda S.C.M.

KGHM INTERNATIONAL LTD. and Sierra Gorda S.C.M

 SOCIAL CAPITAL
 
2016
2015
Donations
$0.2M USD**
$0.56M USD
Income tax
$32.78M USD***
$158.13M USD***
 NATURAL CAPITAL
 
2016
2015
Direct greenhouse gas emissions according to weight (CO tonnes equivalents)
324 800 tCO2
365 792 tCO2
Total water withdrawal from external sources
51.7mln m3
44.8mln m3
Energy consumption
7,7mln GJ
8,4mln GJ
 HUMAN CAPITAL
 
2016
2015
Number of lost time accidents
22
22
Fatal
0
1

** Converted according to average NBP exchange rate as of 30/12/2016: USD 1/PLN 4.18
*** Data from KGHM INTERNATIONAL LTD. only

Calendar 2016

January 2016

 

KGHM Group, Sumitomo Metal Mining and Sumitomo Corporation representative confirmed their intention to work together to develop the Sierra Gorda mine.

May 2016

 

Fifty-fifth anniversary of KGHM Polska Miedź S.A. Signing an annex to an unsecured loan agreement concluded on Friday, August 1, 2014 with the European Investment Bank for PLN 2B, extending the period of availability of the loan for another 12 months.
The other terms and conditions of the agreement did not undergo any material changes.

October 2016

 

The KGHM Group received a prestigious Golden Card Leader of Workplace Safety
Fiftieth anniversary of KGHM Zanam’s operations
Twentieth anniversary of the merger between the Polkowice Mine and Sieroszowice Mine
Resuming the production of raw copper in the Głogów I Copper Smelter and Refinery using modern technology

December 2016

 

Publication of a report on changes in the parameters for the key foreign mining assets of the KGHM Polska Miedź Group

 

March 2016

Signing an annex to a contract dated April 28, 2014 for the sale of copper wire rod between the Company and NKT Cables Group GmbH. The value of the contract amounted to PLN 3,371M in the period 2014–2016. In accordance with an option included in the contract, the contract was extended until 2017.

 

June 2016

Decision of the Ordinary General meeting of KGHM Polska Miedź to pay dividend for 2015 of PLN 300M.
Concluding a framework contract between KGHM Polska Miedź S.A. and China Minmetals Corporation for the sales of copper cathodes in 2017–2021. Depending on the utilization of the quantitative option, the value of the contract is estimated within a range of USD 1,178M (i.e. PLN 4,562M) and USD 2,828M (i.e. PLN 10,949M) (at the USD/PLN exchange rate applicable on June 20, 2016 according to the National Bank of Poland).

 

November 2016

Death of eight miners following a spontaneous rock mass tremor in the Rudna mine.
Cooperation of the KGHM Group and MIT Enterprise Forum Poland – a support program for start-ups in the area of commodities and the mining industry