Investments
KGHM Polska Miedź S.A.
In 2022, capital expenditures on property, plant and equipment amounted to PLN 2,868 million. Together with expenditures incurred on uncompleted development work, capital expenditures stood at PLN 2,877 million and were greater than in the previous year by 11.3%.
Structure of expenditures on property, plant and equipment and intangible assets of KGHM Polska Miedź S.A. (in million PLN)
| 2022 | 2021 | Change (%) | Q4 22 | Q3 22 | Q2 22 | Q1 22 | |
|---|---|---|---|---|---|---|---|
| Mining | 2,116 | 1,747 | +21.1 | 801 | 511 | 420 | 384 |
| Metallurgy | 621 | 664 | (6.5) | 218 | 142 | 177 | 84 |
| Other activities | 57 | 91 | (37.4) | 18 | 23 | 11 | 5 |
| Development work – in progress | 9 | 7 | +28.6 | 2 | 2 | 1 | 4 |
| Leases per IFRS 16 | 74 | 77 | (3.9) | 10 | 21 | 34 | 9 |
| Total | 2,877 | 2,586 | +11.3 | 1,049 | 699 | 643 | 486 |
| including borrowing costs | 182 | 119 | +52.9 | 59 | 52 | 25 | 46 |
CAPEX execution in 2022
* excl. Leasing per IFRS 16
Investment activities comprised projects related to the replacement of equipment and maintaining mine production, as well as development projects:
Projects related to the replacement of equipment aimed at maintaining production equipment in an undeteriorated condition, represent 43% of total expenditures incurred.
Projects related to maintaining mine production aimed at maintaining mine production on the level set in approved Production Plan (development of infrastructure to match mine advancement) represent 32% of total expenditures incurred.
Development projects aimed at increasing production volume of the core business, implementation of technical and technological activities optimising use of existing infrastructure, maintaining production costs and adaptation of the company’s operations to changes in standards, laws and regulations (confirmatory projects and those related to environmental protection) represent 23% of total expenditures incurred.
Adaptation projects aimed at adapting the company’s operations to changes in laws, existing standards or other regulations, especially as regards occupational health and safety, securing property, cybersecurity, ethical and anti-corruption standards, environmental impact, quality standards and management systems, represent 2% of expenditures incurred.
KGHM INTERNATIONAL LTD.
| 2022 | 2021 | Change (%) | Q4 22 | Q3 22 | Q2 22 | Q1 22 | |
| Victoria Project | 49 | 38 | +28.9 | 12 | 12 | 15 | 10 |
| Removal of superlayer and other | 155 | 224 | (30.8) | 22 | 42 | 38 | 53 |
| Total | 204 | 262 | (22.1) | 34 | 54 | 53 | 63 |
| 2022 | 2021 | Change (%) | Q4 22 | Q3 22 | Q2 22 | Q1 22 | |
| Victoria Project | 221 | 147 | +50.3 | 57 | 57 | 63 | 44 |
| Removal of superlayer and other | 692 | 867 | (20.2) | 103 | 202 | 168 | 219 |
| Total | 913 | 1,014 | (10.0) | 160 | 259 | 231 | 263 |
Capital expenditures of the KGHM INTERNATIONAL LTD. segment in 2022 amounted to USD 204 million, which represents a decrease by USD 58 million (-22%), compared to 2021. Expenditures on the Victoria project increased, while the decrease in other expenditures resulted chiefly from lower spending on the preparation of the deposit for future operations by the Robinson mine.
Sierra Gorda S.C.M.
n 2022, expenditures on property, plant and equipment, and intangible assets, included in the cash flow statement of Sierra Gorda S.C.M., amounted to USD 420 million, the majority of which, i.e. USD 166 million (40%) was expenditure on removal of the superlayer to access further parts of the deposit, and the remaining amount was incurred on development and replacement of property, plant and equipment.
Capital expenditure on Sierra Gorda S.C.M.
| J.m. | 2022 | 2021 | Change (%) | Q4 22 | Q3 22 | Q2 22 | Q1 22 | |
| Expenditure on property, plant and equipment | mln USD | 420 | 284 | +47,9 | 119 | 78 | 74 | 149 |
| Expenditure on property, plant and equipment – segment (55% share) | mln PLN | 1 031 | 605 | +70,4 | 296 | 211 | 182 | 342 |
The 48% increase in expenditures compared to 2021 was primarily due to the acquisition of the Oxide project from KGHM INTERNATIONAL LTD. in 2022.