Dear Stakeholders,
The year 2023 in KGHM was a demanding time, full of challenges and uncertainties. Despite the
difficult macroeconomic environment, volatile commodities prices and high cost pressures, KGHM
advanced projects whose aim was to strengthen the productivity and efficiency of individual
segments of the Group. Development of the resource base and production potential, while
continuing to optimise costs, represent strategic goals for Polska Miedź. For KGHM as a global
company, operating on several continents, a priority is to enable equal access to information to all
participants of the international capital markets. We see dialogue with our stakeholders, amongst
whom shareholders play a particular role, as a key element in the effective functioning of the
Company. We invite you to familiarise yourself with the results of the Company and of the KGHM
Polska Miedź S.A. Group for 2023.
EFFICIENT PRODUCTION AND GOOD RESULTS
I wish to begin my summation by thanking our employees. It is thanks to the responsibility,
commitment and enormous professionalism of the staff of KGHM that we have achieved
satisfactory results. Thanks to the knowledge and experience of our employees we create products
which enable sustainable development. The efforts of the staff of Polska Miedź have enabled
achievement of the goals set for 2023, given a still-very difficult macroeconomic environment.
The destructive aggression of Russia against Ukraine, the volatility of prices on the metals and
energy commodities markets, including a decrease by nearly 4% y/y in the cash settlement copper
price on the LME, inflation and the weakening rate of economic growth in the world’s most
important economies, have meant that we have had to operate in highly demanding conditions.
Thanks to the commitment and engagement of the employees of Polska Miedź, we recorded very
good mined production results in the Polish mines, and achieved stable Group operating result.
The Company achieved and exceeded its target production volumes for 2023 in all of its main
product lines, i.e.:
• Copper in concentrate: 395.4 thousand tonnes compared to 390 thousand tonnes in the
production plan
• Silver in concentrate: 1 319.9 tonnes compared to 1 261 tonnes in the production plan
• Electrolytic copper: 592.4 thousand tonnes compared to 582 thousand tonnes in the
production plan, including from own concentrates (385.5 thousand tonnes compared to
385 thousand tonnes planned)
• Metallic silver: 1 403.3 tonnes compared to 1 301 tonnes in the production plan.
The consolidated revenues of the KGHM Group for 2023 amounted to PLN 33.5 billion,
adjusted EBITDA was PLN 5.4 billion, while Group equity reached PLN 28.6 billion.
WE ARE INVESTING IN THE FUTURE
KGHM continues exploratory work within its concessions and is engaged in concession-related
proceedings aimed at ensuring an appropriate resource base for its operations, prolonging the
lives of the mines and extending the value chain.
The past year was marked by the advancement of mining projects and continuation of the Deposit
Access Program. In June, we connected the GG-1 shaft with the Rudna mine. The shaft in Kwielice
is the deepest mine working in Poland (1348 meters), and is an example of the expert know-how
and innovation of the employees of the KGHM Group. We also commenced preparatory work to
build another important facility in the Deep Głogów region – the GG-2 shaft.
The Central Air Conditioning System and a Surface-based Air Conditioning Station brought online
at the Rudna mine significantly improved the working conditions of the miners. The benefits of the
Deposit Access Program will be enjoyed for many years, but even now the investment is bringing
tangible results. Thanks to the improved working conditions in the mine areas around the GG-1
shaft, there was a substantial increase in ore extraction and in the amounts of copper and silver in
the Deep Głogów mining region.
We are developing in accordance with the Circular Economy concept. We continued to develop the
Żelazny Most Tailings Storage Facility and we completed the three stages of construction of the
Southern Quarter, and are in the process of completing the construction of the Tailings Compacting
Station. At the Legnica Copper Smelter and Refinery we are advancing the Hybrid Smelter program,
which is our response to the needs associated with copper recycling.
In August we completed a very important for us, but also for our surroundings, Program to adapt
the technological installations to the requirements of BAT Conclusions. Thanks to these
investments in the infrastructure of the metallurgical plants in Legnica and Głogów, our
installations have been adapted to BAT conclusions in terms of environmental protection and
restricting emissions of arsenic. Our production was once again certified as responsible by receipt
of a Copper Mark certificate, which this year also comprised the Cedynia Wire Rod Plant, while
analysis of the environmental and carbon footprint of our cathodes, wire rod and Cu-OFE rod –
carried out by the Mineral and Energy Economy Research Institute of the Polish Academy of
Sciences – demonstrated that the copper products of KGHM have a lower footprint than the global
average.
As a global player on the copper and silver production market, by strengthening its mining and
production base reserves, KGHM is engaged in processes which facilitate the world’s sustainable
development.
WE ARE CHANGING FOR A BETTER FUTURE AND CLIMATE
As a responsible participant in the green transformation, we consciously deal with the challenges
created by changing regulations and the resulting obligations in the form of the impact of our
activities on the climate, as well as the impact of climate changes on KGHM.
Activities related to rational and responsible production are our priority. We are advancing the
Climate Policy and intensified our actions in the direction of the energy transformation. Since
January 2023, one hundred percent of the electricity consumed by the Sierra Gorda mine comes
from renewable energy sources (RES). Our plans foresee that by 2030, the increase in the share of
RES in our energy mix will lead to a substantial drop in CO
2
emissions.
We are carrying out solar power plant projects on Company land (at the Głogów Copper Smelter
and Refinery, the Cedynia Wire Rod Plant, the Tailings Division and at the Obora Sand Pit), and are
preparing additional projects which will arise on land belonging to KGHM, though we are also active
on the M&A market in terms of RES and are engaged in a variety of due diligence processes as well
as valuations of assets available for sale.
WE ARE MEETING THE NEEDS OF EMPLOYEES AND OUR SURROUNDINGS
In conducting our business we pay particular attention to the safety of our working environment,
our local communities and our employees. For many years KGHM has operated under the „Zero
harm” principle. We employ early warning systems and innovative solutions, and we are engaged
in research projects which improve efficiency and workplace safety. We also have exceptionally
well-trained rescue staff who are amongst the global elite of emergency rescue specialists.
We know that being a good neighbour means accepting responsibility for local communities. In the
past year we conducted over 300 volunteer actions, thanks to which our employees were able to
assist those in need and to share their knowledge and experience. We commenced a KGHM
Academy, under whose banner all of the preventive programs, workshops and pro-social actions
are now carried out. In 2023 more than eight thousand participants took advantage of them.
At this point I would like to thank everyone who participated in these activities for their cooperation
and involvement: our volunteers, employees, partners and NGOs. I wish to recognise our local
communities and thank them for their efforts to develop the regions in which we jointly function.
MAXIMISING POTENTIAL
I also wish to thank our shareholders and customers for the trust they have bestowed on us.
Copper, silver and other metals with the KGHM brand have for years been synonymous with the
highest quality, and have been appreciated and recognised around the world. I vow to work hard
on strengthening the status of preferred supplier of services and products of the highest market
standards.
Sentiment on global markets indicates another demanding year, but over the years the employees
of Polska Miedź have proven more than once that KGHM is capable of acting effectively even under
difficult and volatile conditions. Know-how and cooperation are business pillars on which for more
than 60 years we have been building a position as a leader in the production of copper and silver.
The year 2024 in KGHM will be marked by improved production efficiency and investments which
will enable maximal utilisation of the potential of the companies and the long-term operation of
the Group.
On behalf of the Management Board of KGHM Polska Miedź S.A. I hereby present you with the
Annual Report of the Company and the KGHM Polska Miedź S.A. Group for 2023, and invite you to
review the data, and the non-financial indicators, contained in the Report.
Sincerely,
Andrzej Szydło
President of the Management Board
KGHM Polska Miedź S.A.
Lubin, 23 April 2024