Dear Stakeholders,
We ended 2022 with ambitious projects and investment plans, in good financial condition, with
stable production and satisfying financial results, despite the fact that it was another year full of
challenges and changes for our Company. The time of uncertainties and difficulties arising from
the COVID-19 pandemic almost smoothly passed into a socially, politically and economically tragic
period associated with the full-scale Russian aggression against Ukraine and war just beyond our
eastern border. We responded to these challenges and needs, both in terms of the business and
our social responsibilities, in a rapid, adequate and above all professional and efficient manner.
I invite you to review the results of the Company and of the KGHM Polska Miedź Group for 2022.
STABLE PRODUCTION AND SOLID RESULTS
Thanks to the enormous discipline and commitment of our employees, effective management and
forward-looking actions, we achieved very satisfying results: we maintained the targeted levels of
payable copper and silver production, we recorded higher revenues of the KGHM Group and a
good operating result at the Group level. Despite the fact that we had to operate in a difficult
macroeconomic environment. The Russian aggression against Ukraine, which among others
impacted the prices of metals and energy commodities, the uncertain economic outlook for China,
the rising prices of electricity, fuels and foodstuffs, which led high inflation – this is what we had to
contend with, and are still confronting. A large part of the global growth in prices derives precisely
from the rise in prices of energy carriers, which are frequently an inseparable cost factor in the
entire economy, including in the metals mining and processing sectors.
Consolidated revenues of the KGHM Group in 2022 amounted to PLN 33.8 billion, or 13.3%
more than in the prior year. Adjusted EBITDA amounted to PLN 8.9 billion, with profit for 2022 of
PLN 4.8 billion. At the end of 2022, the value of consolidated assets rose to PLN 53.6 billion, and
equity to PLN 32.2 billion. The Group also maintained a safe level of debt, with the ratio of net
debt/EBITDA at the end of 2022 amounting to 0.8.
At this point I would like especially to thank all of our employees for their honest and hard
work as well as their commitment and responsibility. Thanks to rich experience, openness and the
constant enhancement of skills, our Company has built a unique culture of cooperation and has
achieved a high position in the international arena, holding seventh place amongst the world’s
copper producers and second place globally in terms of silver production.
The mission of the Company reflects the goal of „to always have copper”, while the consistently-
advanced vision remains „to use our resources efficiently to become the leader in sustainable
development”.
In 2022 we continued key investment projects. We completed the sinking of the GG-1 shaft to
the level of 1 348 m, which is currently the deepest mine in Poland. This unique project
required of us an innovative approach and the application of the most modern technological
solutions, whilst reflecting climate-related questions. We are also implementing our own solutions
in advancing another key investment, the Tailings Segregation and Compacting Station at the
Żelazny Most
Tailings Storage Facility. We completed a maintenance shutdown at the Głogów
Copper Smelter and Refinery ahead of schedule. We are constantly striving to extend KGHM’s value
chain and to develop in accordance with the Circular Economy concept. At the Legnica Copper
Smelter and Refinery we are continuing the Hybrid Legnica Smelter and Refinery program, which
is a response to the needs connected with copper recycling.
ENERGY STRATEGY
In January 2022, we expanded the four, proven „E”s of our strategy (Efficiency, Ecology,
Elasticity/flexibility and E-industry) with a fifth, key element – Energy. We plan to have 50%
of the electricity consumed by KGHM come from our own sources, including RES, by 2030. Already
our mine in Sierra Gorda is completely powered by energy from renewable sources. In Poland
we are also developing PV projects – both by building our own installations as well as by buying
green energy from the market. In 2022 among others we signed a contract for the purchase of all
the energy to be generated by the new Żuki solar power plant in the Greater Poland voivodeship,
that is 5 300 MWh/year from nearly 10 thousand PV panels. In 2022 we also submitted the first
application in Poland regarding assessment of small modular reactor (SMR) technology to
Poland’s National Nuclear Agency, while in February we signed an agreement with NuScale on
the commencement of work to implement advanced SMRs in Poland. We are also considering
possibilities related to wind farms and the potential of hydrogen.
We are also a leader of the energy transformation in Poland due to watershed R&D projects. In the
Copper Basin, innovative technology using alloys of copper and silver is being tested, which may
significantly reduce losses in the transmission of electricity. Already, on an experimental section of
line in the Copper Basin, they are around 20% lower.
SUSTAINABLE DEVELOPMENT AND RESPONSIBLE BUSINESS
Actions related to ecology and protecting the environment are of priority importance for us.
We are implementing the Climate Policy adopted in 2021, we calculated the balance of Scope
1, 2 and 3 greenhouse gas emissions for 2021 for the KGHM Polska Miedź S.A. Group and we are
continuing the Program to adapt the technological installations of the Company to the
requirements of BAT conclusions for the non-ferrous metals industry and to restrict emissions
of arsenic (BATAs). In 2022 we brought another six installations into operation, which are
substantially improving air quality.
We care about the safety of the environment in which we operate, local communities and our
employees. Our efforts related to workplace safety are attested to not only by external audits, or
by the Workplace Safety Leader Gold Card awarded once again for the years 2023 – 2024 for
achievements in the area of OHS improvement, but also to data on accident rates. The LTIFR ratio
for KGHM Polska Miedź S.A. is 5.05. The number of accidents at work was 149 and was lower
by 16 compared to the 12 months of 2021. The TRIR ratio for the international assets (combined
for employees of the KGHM INTERNATIONAL LTD. Group and Sierra Gorda S.C.M. as well as
subcontractors for these entities) in 2022 was 0.34.
Safety is also one of the main areas adopted by the Company in 2022 in its Human Rights
Policy, which stands as a clear declaration of and commitment by KGHM to the question of
respecting human rights. These are indisputable and universal principles, which against a backdrop
of war are exceptionally important, but also verifiable. The Group’s commitment to providing
humanitarian aid to refugees and victims from Ukraine was a simple test of our social
responsibility.
I wish to thank everyone involved in these actions – our volunteers, employees, partners and non-
governmental organisations for their cooperation and engagement. Special thanks to our local
communities for being good neighbours and for their mutual efforts to develop the regions in
which we jointly operate.
My thanks also to our shareholders and customers for the trust which you have extended to
us.
In July 2022 a quarter-century had passed since the market debut of the copper giant KGHM Polska
Miedź S.A. Today, after more than 25 years, with pride we can state that KGHM remains one of the
main drivers of the Warsaw Stock Exchange, while the shares of KGHM represent an important
component of the WIG, WIG20, and WIG30 indices.
AMBITIONS AND PLANS FOR 2023
Another challenging year lies before us. KGHM’s approved budget for 2023 assumes stable
operating, economic and financial results, a safe level of debt and the advancement of ambitious
development and investment goals alongside the highest expenditures in these areas in our
history. We are planning to strengthen the production potential of individual segments of the
Group, in accordance with the profiles and natures of individual assets. We are also expecting a
more rapid rate of development of our mining projects and wish to emphasise that we are
supplying metals which are vital to the development of the world’s economy and represent raw
material security for Poland.
On behalf of the Management Board of KGHM Polska Miedź S.A. I hereby present you with the
Annual Report of the Company and of the KGHM Polska Miedź Group for 2022 and I invite you to
review the data and non-financial indicators contained in the Report.
Respectfully,
Tomasz Zdzikot
President of the Management Board
KGHM Polska Miedź S.A.
Lubin, 21 March 2023