Dear Stakeholders,

KGHM in 2020, as one of the few companies in the sector which triumphed over the macroeconomic crisis, achieved its goals and ended the year with a satisfactory result. On behalf of the Management Board of KGHM Polska Miedź S.A. I hereby present you with results of the Company and of the KGHM Polska Miedź Group for 2020.

Last year, the world stood in the shadow of a wave of sickness from the COVID-19, the most serious pandemic in over a century, with an unpredictable course and impact on the economy of the entire globe. The pandemic caused a shock to the financial markets, leading to interruptions in its functioning, and even resulted in the short-term, unprecedented, complete lack of the ability to engage in financial transactions. This resulted in rapid and deep price collapses on commodities markets. Of significance for the markets was the situation on the oil market, where one of the contracts fell below zero, raising questions about the stability of the commodities pricing system.

In the case of KGHM, the turbulence on the copper market was to a large extent related to commodities logistics, which in turn were connected with the restrictions on travel and transport. The quarantines introduced in various countries caused substantial interruptions to production in many sectors. Another factor affecting the decision-making process during this time was the tremendous uncertainty as to the course and depth of the crisis. The belief was widely held that the nature of the crisis was completely different from others, in that it had not been caused by interruptions to the functioning of the financial system, but by the rapid collapse of economic activity by companies and households, as well as by restrictions to physical mobility, the consequence of which might have been a wave of bankruptcies and a long-term crisis.

The uncertainty on the financial markets and the potential threat posed to the operations required rapid and decisive actions to limit the risk to the Company’s functioning.

The Strategy of the Company for the years 2019-2023 and the commitment of our employees to its advancement, sanitary discipline, flexibility in making decisions – this all played a part in the achievement of our results. Today we can proudly point to solid results in the areas of finance, development, environmental protection and energy, as well as – and pre-eminently – as regards safety and countering the effects of COVID-19.

The main source of the Group’s operating results are those achieved by KGHM Polska Miedź S.A. We maintained production at a stable level; the continuity of these processes were not under threat. Prudent estimates of risk enabled us to maintain our planned level of production. I would

like here to present you with the major effects of the management and operational actions of KGHM in the past year.

The highest level of EBITDA since the acquisition of the international assets of the KGHM Group, over PLN 6.6 billion; the continued full operating capacity of our assets; excellent sales results; safety and continued employment for our thousands of workers – these are the achievements of which we are especially proud. Assets in the consolidated statement of financial position amounted to PLN 42 780 million and were higher compared to their level as at 31 December 2019 by PLN 3 371 million.

We continued actions to ensure long-term financial stability by basing the financing structure on diversified and long-term financing sources. We are consistently reducing our level of debt, and at the end of 2020 the debt ratio, measured as the relationship of net debt to EBITDA, fell to 0.9 from 1.5 at the end of the prior year. Equity of the KGHM Group amounted as at 31 December 2020 to PLN 21 081 million and was higher by PLN 879 million than at the end of 2019. The profit for the period of PLN 1 797 million was higher than last year by +26.5%.

In 2020 the KGHM Polska Miedź S.A. Group was fully capable of meeting its financial obligations. The cash and cash equivalents held by the Group and the external financing obtained guarantee continued liquidity and enable the achievement of investment goals. Cash and cash equivalents in 2020 increased by PLN 1 506 million and as at 31 December 2020 amounted to PLN 2 522 million.

Despite the pandemic, in KGHM we did not slow down. In terms of the long-term outlook, we continued to advance key investments. Our strategic investment in building the Southern Quarter of the Żelazny Most Tailings Storage Facility is on track. In mining we advanced investment projects supporting the dewatering in the Polkowice-Sieroszowice mine. We continued the Deposit Access Program, including work on sinking the GG-1 shaft.

In metallurgy we advanced investment projects involving the replacement of equipment and optimisation at the Głogów I Copper Smelter and Refinery. We completed this work ahead of schedule and despite the operational difficulties imposed by the pandemic-related restrictions. At the Legnica Copper Smelter and Refinery we invested in optimisation projects utilising the production capacity of existing infrastructure and its development aimed at increasing scrap processing. These actions are part of our plans to produce green copper and are aligned with the ecological pillar of our development strategy.

Amongst the projects in our investment portfolio which are of unwavering importance are those connected with protecting the natural environment, including investment projects aimed at limiting polluting emissions. Both at the Legnica Copper Smelter and Refinery as well as at the Głogów Copper Smelter and Refinery we carried out projects to adapt the metallurgical installations to BATAs conclusions. The new Gas Treatment installation at the Legnica Copper Smelter and Refinery, whose construction started in 2020, will ultimately reduce residual pollution by up to 99 percent. Our business model is combined with care for the environment; every segment of this model incorporates standards which ensure the safe and environmentally-friendly conduct of operations.

In the past year we also intensified our actions in the area of energy generation, aiming to increase the amount of energy supplied by our own resources, including renewables (RES). As part of a Company Program called „Development of energy generation, including RES” we adopted among others a Spatial Planning Concept which foresees an increase in installed capacity in two photovoltaic power plant projects. These power plants will arise on land owned by KGHM’s divisions.

We initiated procedures to alter planning documentation in municipalities in which in future there will arise renewable energy sources. Meanwhile, in December 2020 KGHM ZANAM brought on-line the first photovoltaic power plant in Poland using 4.0. technology. Green energy is a global trend, one which we as a Company intend to pursue, as it brings with it many challenges and opportunities for our business. We want to produce „green copper”, utilising clean energy. We should remember that there is no climate-related transformation without copper. At the same time there is no Green Deal without KGHM.

I wish to point out that in KGHM we treat the question of our people’s safety with particular care. Thanks to the attitude and commitment of all of our employees, in 2020 we marked a record low accident rate in the form of the LTIRF_KGHM (Lost Time Injury Frequency Rate KGHM). It amounted to 7.3, or a decrease by 29 percent compared to 2019 and as much as 61 percent compared to 2010. So too KGHM INTERNATIONAL LTD. in 2020, despite the exceptionally tough conditions presented by the pandemic, recorded its best result in history in terms of occupational health and safety.

In the past year, because of the coronavirus pandemic, the health and safety of employees and their families took on an exceptional significance and became an unprecedented priority. As a result we undertook a variety of actions of a prophylactic, communications and procedural nature, aimed at minimising the negative impact of the pandemic and restricting the

possibility of the disease’s spread. Thanks to the commitment and responsibility demonstrated by our employees, both in KGHM Polska Miedź S.A. and in the international mines of the Group, there were no production shutdowns directly attributable to the pandemic. We also provided support to our communities, assisting in equipping the health services, engaging in volunteer actions or help for seniors, while the Group company Nitroerg commenced the manufacture of a disinfectant liquid which found its way into schools, institutions and hospitals throughout Poland.

At this point I would like to express my gratitude to all of our stakeholders. The dialogue we have engaged in for years enabled us to develop mutual respect, of such importance given the challenges and tough decisions we had to face so many times  over the past year.

My special thanks goes to our employees, not only for their toil and hard work on behalf of the Company’s and KGHM Group’s development, but also for their enormous responsibility and discipline, as demonstrated numerous times in 2020.

Thanks also to our shareholders and customers for the trust you have shown in us. My sincere respects to our local communities for being good neighbours and for their mutual efforts to develop the regions in which we both operate.

2021 will be an exceptional year for KGHM. This year marks the 60th anniversary of the founding of our company, for which we have ambitious and courageous plans which are reflected in our budget plans. The PLN 2.9 billion targeted for the operations in Poland and PLN 0.3 billion for the international and Polish supporting operations is more than the average in recent years. We bet on development, as we know that the future is made of copper, and KGHM is one of the giants in the production of this metal. The copper and commodities that we produce build the technologies of the future, and at the same time the future of the Group and the reality that surrounds us.

I invite you to review our data and non-financial indicators, whose reporting is especially important to us, along with the attached Non-financial report for the year 2020.

Respectfully,

Marcin Chludziński

President of the Management Board

KGHM Polska Miedź S.A.

Lubin, 23 March 2021