KGHM Group in 2016
The KGHM Group is one of the world’s leading producers of copper and silver, with more than 55 years of experience in the extractive industry and non-ferrous metal processing. In Poland, we operate one of the world’s largest copper ore deposits, thereby guaranteeing continuous production for many decades to come. The KGHM Group also produces gold, molybdenum, lead and rock salt, among other things, and is one of the leading exporters and one of the largest companies in Poland.
Who are we?
We are a global, innovative organization involved in technologically advanced exploration, mining and smelting operations.
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
Cu, Ag, Au
- ZG Lubin
- ZG Polkowice-Sieroszowice
- ZG Rudna
Copper smelters and refineries:
- HM Legnica
- HM Głogów I
- HM Głogów II
Walcownia HM Cedynia
- Pre-production and exploration projects in south-west Poland
Cu, Ni, Au, Pt, Pd
- Morrison mine in the Sudbury Basin in Canada (underground)
- Franke mine in Chile (surface)
- 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
Cu, Mo, Au, Ag
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.
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| | 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 |
| | 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 (CO2 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