9.8.3 The Oxide project in the KGHM INTERNATIONAL LTD. Group

in PLN millions, unless otherwise stated

In the fourth quarter of 2021, an agreement for the sale of the Oxide project, which was held by the subsidiary KGHM Chile SpA, to Sierra Gorda S.C.M. was concluded between KGHM Polska Miedź S.A. and the second partner in the joint venture Sierra Gorda S.C.M. – Sumitomo (Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation). On 15 December 2021 the sales agreement was signed, with the sale date set at 1 January 2022.

As at 31 December 2021 the Oxide project was reclassified from intangible assets not yet available for use (assets related to exploration and evaluation of mineral resources) to non-current assets held for sale in the amount of PLN 176 million.

The cash inflow from the sale transaction took place on 4 March 2022. The profit on the sale in the amount of PLN 135 million was recognised in the item “Other operating income”.

Pursuant to the accounting policy adopted by the Group, the Group’s share in unrealised profit on the transaction between the Group and the entity accounted for using the equity method, decreased the profit due to this transaction in correspondence with the carrying amount of the Group’s interest in this entity. Since as at 31 December 2022 the carrying amount of the Group’s interest in the joint venture Sierra Gorda S.C.M. amounts to PLN 0, elimination of the unrealised profit proportionally to the Group’s interest (55%) will be recognised when the carrying amount of the Group’s interest in Sierra Gorda S.C.M. will be above the level of PLN 0.