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Our competitive advantages

Our competitive advantages

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Global reach of operations

Over the recent decades, KGHM Polska Miedź S.A. has become a global player in the mining and processing market, present on four continents, distinguished by a diversified and constantly expanding product portfolio. Such a large scale of operation substantially curtails the risk of disturbance in the continuity and quality of production and facilitates the continuous transfer of knowledge and experience between its various units.

Access to rich and safe deposits owned in Poland and abroad

KGHM Polska Miedź S.A. has a geographically diversified portfolio of mining projects and production facilities located in Europe and North and South America. The copper ore resources controlled by KGHM – more than 40 million tonnes – make it an important player in the global mining sector. At the heart of KGHM is the largest copper ore deposit in Europe and one of the largest in the world, located in south-western Poland, which is also rich in associated metals.

Fully integrated production process with a complete chain of natural resource extraction and processing - from appraisal and exploration to sales

Production at KGHM Polska Miedź S.A. is a fully integrated process whereby the end product of one technological phase forms the input (intermediate product) for the subsequent phase. It is worth noting that as part of its operations, the Company is dynamically expanding elements related to the implementation of the circular economy concept. To this end, it has been developing recycling in its production process and striving to further improve the utilisation of post-production waste as the so-called secondary sources of raw materials.

Unique know-how and skills

The experience and skills of our employees have helped transform KGHM from a local miner into an international group acting as a major player in the global market for non-ferrous metals. Employee knowledge is, and will continue to be, one of the key factors determining the Company’s competitive advantages. One important area in which internal competence is being developed is sustainability.

Over 60 years of experience in underground copper mining

Mining and processing copper to form a finished, marketable product is a difficult and complex process. The Company has unique, long-standing experience and know-how valued by experts and customers from around the world. The mining industry is dominated by open-pit mining. Underground mining, as applied at KGHM’s plants, is a much rarer form of extracting raw materials that has many advantages in terms of environmental and climate concerns. Because most of the work is carried out underground, interference with the environment occurs on a much smaller scale. This means less inconvenience for local communities and definitely easier reclamation processes for post-mining areas.

KGHM is uniquely qualified to work at great depths. In 2022, the European record for shaft depth was broken (1.34 km, GG-1 shaft). The project was linked to the strategic investment involving the mining of a new part of the copper deposit in the Deep Głogów area.

Extensive portfolio of products/elements

KGHM has geographically diversified mining assets. It mines copper ore, associated elements and precious metals. At plants located in Poland, operations are additionally based on metallurgy, refining and processing. The copper deposit mined by KGHM in Poland is one of the largest in the world. Its abundance will allow it to continue operations for decades to come. The Group also produces silver, gold, molybdenum, nickel, rhenium, lead, platinum and rock salt. While KGHM is famous for its metal production, other products are also produced in its technological processes – they include raw and refined lead, sulphuric acid, nickel sulphate and selenium. KGHM is also the only European producer of rhenium from its own resources – a valuable and very rare metal used mainly in the aerospace and petrochemical industries.

Extension of the value chain

The main business model of the KGHM Polska Miedź S.A. Group is divided into seven areas: exploration and prospecting, mining and reclamation of deposits, ore enrichment, smelting and refining (including recycling), processing and sale of finished products. Organized in this way, the core production process allows optimization and efficient management of raw material resources, while minimizing waste in accordance with the idea of the circular economy.

KGHM Polska Miedź S.A. sees the potential for extending the value chain. KGHM cooperates with its Group companies to implement the concept of intensifying the acquisition of copper-bearing scrap to use it as feedstock in its metallurgical furnaces. By diversifying upstream, the Company boosts the utilisation of its production capacity and makes a positive contribution to the environment by recovering valuable metals from waste. In 2022 alone, a total of more than 150,000 tonnes of copper scrap was processed and thus returned to use. The Company simultaneously strives to increase the share of highly processed products in the KGHM Group’s total sales (wire rod, wire, low-loss copper-silver alloy power cables).

Innovation

KGHM is carrying out innovation and research and development activities (related to, among other things, testing self-driving electric mining machines, robotization of production and auxiliary processes, broadband data transmission in underground workings). The projects are conducted at various business levels, in cooperation with independent entities (e.g. science establishments). These translate into, among other things, increased process efficiency, reduced production costs, improved occupational health and safety, effective environmental protection measures and efficiency in the exploration of new deposits.

Best practice

Inventors Market

KGHM supports employee innovation through, among other things, the Inventors Market initiative. It was organized in November 2022 in all branches of the Company. In accordance with its Inventing Bylaws, also sought after are solutions of a technical or technical-organisational nature (technology area), but also in the area of improving occupational health and safety.

Partnerships with companies and institutions

KGHM is building lasting partnerships with established companies and domestic and international institutions. The company is a member of many national and international organizations (including employers’ associations), business and industry associations, foundations and other entities representing the European mining industry. It maintains an ongoing dialogue with technology experts, universities, suppliers, governments, community groups, industry leaders and civil society organizations at all stages of the life cycle of its projects. Through ongoing cooperation with stakeholders and the exchange of opinions, KGHM is making a significant contribution to society while becoming a more valuable company for shareholders.

Best practice

CuValley Hack

2022 saw the he second edition of CuValley Hack, a hackathon organized by KGHM Polska Miedź S.A. and KGHM Centrum Analizki sp. z o.o. as part of the Copper Valley initiative. The hackathon attracted 250 participants, whose teams presented 40 projects (three projects acquired in the second edition are in the process of implementation at KGHM).

Integration within the KGHM Group

The KGHM Polska Miedź S.A. Group is internally integrated and, in many aspects, comprehensive in its operations. It includes entities with unique competencies, key to the production line and the implementation of development projects. They ensure, among other things, the continuity of electricity supply, the development of technology, provide construction services, including underground construction and mining work, manufacture and service mining machinery and equipment. They are also implementing circular economy activities.

Financial stability

One of the pillars of growth of the KGHM Group is to ensure the Group’s financial stability and implement solutions aimed at increasing its value. As part of enhancing its competitive advantage, KGHM Polska Miedź S.A. strives for basing the Group’s financing structure on long-term instruments, shortening the cash conversion cycle and managing market and credit risk effectively. These actions improve the liquidity of the Company and the Group and affect the availability of funds for the Company’s growth, implementation of strategic tasks and increase profits by reducing costs of financing. This allows the Group to plan and conduct a number of significant long-term investment projects.

About KGHM

Organizational Structure of the Company and the Group