THE MANAGEMENT BOARD’S REPORT ON
THE ACTIVITIES OF KGHM POLSKA MIEDŹ S.A.
AND OF THE KGHM POLSKA MIEDŹ S.A.
GROUP IN 2024
Lubin, March 2025
KGHM Polska Miedź S.A. 2
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
TABLE OF CONTENTS
Table of contents ................................................................................................................................................................................. 2
1 KGHM Polska Miedź S.A. Group .................................................................................................................................................. 5
1.1 KGHM Polska Miedź S.A. - an overview ....................................................................................................................................................................... 5
1.1.1 Significant events in 2024 and up to the date of signing of this report ......................................................................................................... 5
1.1.2 The Company and the Group in the years 2017-2024 - synthetic overview ................................................................................................. 7
1.2 Basic principles of the Company and the Group management .............................................................................................................................. 8
1.2.1 Organisational structure of the Group and the Company and changes in the organisational structure in 2024 ................................. 8
1.2.2 Changes in the basic principles of managing the Group ................................................................................................................................ 13
1.2.3 Reporting segments .............................................................................................................................................................................................. 13
1.3 Characteristics of the Company and the Group ...................................................................................................................................................... 14
1.3.1 Business model of KGHM Polska Miedź S.A. .................................................................................................................................................... 14
1.3.2 Our assets ............................................................................................................................................................................................................... 17
1.3.3 Description of the production process .............................................................................................................................................................. 22
1.3.4 Basic products and description of the industry ............................................................................................................................................... 24
1.3.5 Competitive advantages ....................................................................................................................................................................................... 29
1.4 Strategy, plans and objectives ..................................................................................................................................................................................... 32
1.4.1 Mission, Vision and Strategy and the development plans of the Group ..................................................................................................... 32
1.4.2 Advancement of the Strategy - key achievements in individual strategic development directions ....................................................... 33
1.4.3 Development directions of the KGHM Polska Miedź S.A. Group .................................................................................................................. 36
1.4.4 Main assumptions of Budget 2025, realisation of the assumptions of Budget 2024 ............................................................................... 38
1.5 Risk management .......................................................................................................................................................................................................... 39
1.5.1 Corporate risk – key risks and risk factors and mitigation ............................................................................................................................. 43
1.5.2 Information on the impact of the war in Ukraine on the operations of the Company and the Group ................................................. 57
1.5.3 Impact of risks associated with operations in other countries ..................................................................................................................... 57
1.5.4 Market, credit and liquidity risks ......................................................................................................................................................................... 58
1.6 Other information ......................................................................................................................................................................................................... 61
1.6.1 Shareholders and the Capital Market ................................................................................................................................................................ 61
1.6.2 Significant contracts for the Company and Group .......................................................................................................................................... 66
1.6.3 Information about suppliers / customers whose share exceeds 10% of total revenues ......................................................................... 66
1.6.4 Information on transactions entered into between related parties, under other than arm’s length conditions ................................ 67
1.6.5 Litigation and claims ............................................................................................................................................................................................. 67
1.6.6 Expenditures incurred to support culture, sports, charities, media, social organisations, trade unions etc. ...................................... 67
2 Key results of the Group and reporting segments .................................................................................................................. 69
2.1 Key operational and financial indicators by business segment ............................................................................................................................ 69
2.2 Key factors influencing the results of the KGHM Polska Miedź S.A. Group in 2024 - macroeconomic conditions ..................................... 69
2.3 Results of the KGHM Polska Miedź S.A. Group ........................................................................................................................................................ 73
2.3.1 Production............................................................................................................................................................................................................... 73
2.3.2 Sales ......................................................................................................................................................................................................................... 73
2.3.3 Costs ......................................................................................................................................................................................................................... 74
2.3.4 Statement of profit and loss ................................................................................................................................................................................ 75
2.3.5 Cash flows ............................................................................................................................................................................................................... 77
2.3.6 Assets ....................................................................................................................................................................................................................... 78
2.3.7 Equity and liabilities .............................................................................................................................................................................................. 79
2.3.8 Contingent assets and liabilities due to guarantees granted ........................................................................................................................ 80
2.4 Sources of Financing in the Group ............................................................................................................................................................................. 80
2.4.1 Net debt in the Group ........................................................................................................................................................................................... 80
2.4.2 Sources of financing in the Group ...................................................................................................................................................................... 81
2.4.3 Debt position as at 31 December 2024 ............................................................................................................................................................. 82
2.4.4 Evaluation of financial resources management ............................................................................................................................................... 82
2.4.5 Loans granted by Group companies .................................................................................................................................................................. 83
2.4.6 Cash pooling in the Group ................................................................................................................................................................................... 84
2.5 Results of the segment KGHM Polska Miedź S.A. .................................................................................................................................................... 84
2.5.1 Production............................................................................................................................................................................................................... 84
2.5.2 Sales ......................................................................................................................................................................................................................... 87
2.5.3 Costs ......................................................................................................................................................................................................................... 88
2.5.4 Statement of profit or loss ................................................................................................................................................................................... 90
2.5.5 Cash flows ............................................................................................................................................................................................................... 91
2.5.6 Assets ....................................................................................................................................................................................................................... 92
2.5.7 Equity and liabilities .............................................................................................................................................................................................. 93
KGHM Polska Miedź S.A. 3
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.5.8 Investments ............................................................................................................................................................................................................ 94
2.5.9 Contingent assets and liabilities due to guarantees granted ........................................................................................................................ 96
2.6 Results of the segment KGHM INTERNATIONAL LTD. ............................................................................................................................................ 96
2.6.1 Production............................................................................................................................................................................................................... 96
2.6.2 Sales ......................................................................................................................................................................................................................... 96
2.6.3 Costs ......................................................................................................................................................................................................................... 97
2.6.4 Financial results ..................................................................................................................................................................................................... 98
2.6.5 Cash expenditures ................................................................................................................................................................................................. 99
2.7 Results of the segment Sierra Gorda S.C.M. ............................................................................................................................................................. 99
2.7.1 Production............................................................................................................................................................................................................... 99
2.7.2 Sales ....................................................................................................................................................................................................................... 100
2.7.3 Costs ....................................................................................................................................................................................................................... 100
2.7.4 Financial results ................................................................................................................................................................................................... 101
2.7.5 Cash expenditures ............................................................................................................................................................................................... 102
2.8 Results of other segments ......................................................................................................................................................................................... 103
2.8.1 Revenues ............................................................................................................................................................................................................... 103
2.8.2 Financial results ................................................................................................................................................................................................... 103
2.8.3 Cash expenditures ............................................................................................................................................................................................... 104
3 Corporate governance statement ........................................................................................................................................... 105
3.1 Indication of legal basis and collection of corporate governance principles and the scope of their application ...................................... 105
3.2 Information policy and communication with investors ........................................................................................................................................ 106
3.2.1 Description of the application of DPSN 2021 ................................................................................................................................................. 106
3.2.2 Explanations on the waiver of the application of DPSN 2021 ..................................................................................................................... 108
3.3 The Management Board and the Supervisory Board ........................................................................................................................................... 108
3.3.1 Management Board of KGHM Polska Miedź S.A. (Management Board) ................................................................................................... 109
3.3.2 Supervisory Board of KGHM Polska Miedź S.A. (the Supervisory Board) .................................................................................................. 117
3.3.3 Description of the application of DPSN 2021 ................................................................................................................................................. 127
3.3.4 Explanations on the waiver of the application of DPSN 2021 principles ................................................................................................... 128
3.4 Systems and functions................................................................................................................................................................................................ 129
3.4.1 Description of the application of DPSN 2021 ................................................................................................................................................. 129
3.4.2 Main characteristics of internal control and risk management systems as applied by KGHM Polska Miedź S.A. in the process of
preparing separate and consolidated financial statements .................................................................................................................................... 130
3.4.3 Explanations on the waiver of the application of DPSN 2021 ..................................................................................................................... 132
3.5 General Meeting and relations with shareholders ................................................................................................................................................ 133
3.5.1 General Meetings of KGHM Polska Miedź S.A. (General Meeting) .............................................................................................................. 133
3.5.2 Principles regarding amendments to the Company’s Statutes ................................................................................................................... 134
3.5.3 Shareholders and their rights............................................................................................................................................................................ 134
3.5.4 Description of the application of DPSN 2021 ................................................................................................................................................. 136
3.5.5 Explanations on the waiver of the application of DPSN 2021 ..................................................................................................................... 137
3.6 Conflicts of interest and transactions with related parties .................................................................................................................................. 138
3.6.1 Description of the application of DPSN 2021 ................................................................................................................................................. 138
3.7 Remuneration .............................................................................................................................................................................................................. 139
3.7.1 Description of the application of DPSN 2021 ................................................................................................................................................. 139
3.7.2 Explanations on the waiver of the application of DPSN 2021 ..................................................................................................................... 143
4 Sustainability reporting of the KGHM Polska Miedź S.A. Group .......................................................................................... 144
4.1 General information.................................................................................................................................................................................................... 144
4.1.1 [ESRS 2] General disclosures ............................................................................................................................................................................. 144
4.2 Environmental information ....................................................................................................................................................................................... 244
4.2.1 Disclosures in accordance with the European Union taxonomy for sustainable activities in 2024 ..................................................... 244
4.2.2 [E1] Climate change ............................................................................................................................................................................................. 273
4.2.3 [E2] Pollution ........................................................................................................................................................................................................ 297
4.2.4 [E3] Water and marine resources ..................................................................................................................................................................... 309
4.2.5 [E4] Biodiversity and ecosystems ..................................................................................................................................................................... 315
4.2.6 [E5] Use of resources and circular economy .................................................................................................................................................. 321
4.3 Information on social issues ...................................................................................................................................................................................... 331
4.3.1 [S1] Own staff resources .................................................................................................................................................................................... 331
4.3.2 [S2] Workers in the value chain ........................................................................................................................................................................ 349
4.3.3 [S3] Affected communities ................................................................................................................................................................................. 353
4.3.4 [S4] Consumers and end users ......................................................................................................................................................................... 360
4.4 Business conduct ......................................................................................................................................................................................................... 365
4.4.1 [G1] Business conduct ........................................................................................................................................................................................ 365
Useful terms and abbreviations ..................................................................................................................................................... 378
List of tables ..................................................................................................................................................................................................................... 381
KGHM Polska Miedź S.A. 4
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
List of diagrams................................................................................................................................................................................................................ 385
List of charts ..................................................................................................................................................................................................................... 386
KGHM Polska Miedź S.A. 5
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
1 KGHM POLSKA MIEDŹ S.A. GROUP
1.1 KGHM POLSKA MIEDŹ S.A. - AN OVERVIEW
1.1.1 Significant events in 2024 and up to the date of signing of this report
Date
Event
Section
Change in macroeconomic conditions
2024
An increase in average annual copper prices by 8% and an increase in silver prices by 21%
2.2
2024
A decrease in average annual USD/PLN exchange rate by 5%
2.2
KGHM Polska Miedź S.A. on the Warsaw Stock Exchange
2024
A decrease in the share price of KGHM Polska Miedź S.A. by 3% from PLN 122.70 to PLN 115.00
1.6.1
Changes in the composition of the KGHM Polska Miedź S.A. bodies
9 January 2024
Information on the resignation of Marek Świder from his position of Vice President of the
Management Board (Production) of the Company
3.3
13 February 2024
Information on changes in the composition of the Supervisory Board and the Management Board of
the Company
3.3
6 March 2024
Information on the resignation of Zbigniew Bryja from his position in the Supervisory Board and on
changes in the composition of the Management Board of KGHM Polska Miedź S.A.
3.3
29 March 2024
Information on the resignation of Mirosław Kidoń from his position in the Management Board of
KGHM Polska Miedź S.A.
3.3
6 August 2024
Information on the appointment as of 1 September 2024 of Iga Dorota Lis to the Management Board
of KGHM Polska Miedź S.A. for the position of Vice President of the Management Board (International
Assets)
3.3
8 January 2025
Information on changes in the composition of the Supervisory Board and the Management Board of
the Company
3.3
Impairment of assets
10 January 2024
Identification of indications of the possibility of impairment, or indications that the impairment loss
recognised in prior periods may be reduced, in terms of the Polish and international assets of the
KGHM Polska Miedź S.A. Group
2.3, 2.5
22 March 2024
Information on the results of the conducted tests for impairment
2.3, 2.5
5 February 2025
Identification of indications to verify the recoverable amount of Polish and international assets of the
KGHM Polska Miedź S.A. Group.
2.3, 2.5
4 March 2025
Information on the results of the conducted tests for impairment of Polish and international assets of
the KGHM Polska Miedź S.A. Group
2.3, 2.5
Allocation of profit
8 May 2024
Management Board proposal on covering the loss for 2023 and recommendation of the dividend
payout in the amount of PLN 300 million
1.6.1
7 June 2024
Resolution of the Ordinary General Meeting of KGHM Polska Miedź S.A. regarding the coverage of the
loss for 2023 and dividend payout in 2024, as recommended by the Management Board
1.6.1
16 July 2024
Payout of the dividend in the amount of PLN 300 million (PLN 1.50 per share)
1.6.1
Bond issuance program
29 May 2024
Consent of the Management Board to establish a bond issuance program up to the amount of
PLN 4 billion and conclusion of a bond issuance agreement
1.6.2
14 June 2024
Decision of the Management Board of the Company on the issuance of series C bearer bonds of the
company KGHM POLSKA MIEDŹ S.A. with a nominal value of PLN 1 billion and detailed terms of the
issuance
1.6.1
26 June 2024
Issuance of series C bearer bonds of the company KGHM POLSKA MIEDŹ S.A.
1.6.1
22 August 2024
Introduction of series C bearer bonds of the company KGHM POLSKA MIEDŹ S.A. to the alternative
trading system on Catalyst
1.6.1
16 September 2024
First listing of series C bonds on the Catalyst market
1.6.1
KGHM Polska Miedź S.A. 6
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Date
Event
Section
Significant agreements
7 February 2024
Consent of the Management Board to sign a unsecured, revolving credit agreement with Bank
Gospodarstwa Krajowego in the amount of USD 450 million
1.6.2
23 February 2024
Unsecured revolving credit agreement with Bank Gospodarstwa Krajowego
1.6.2
11 September 2024
Consent to issue a corporate guarantee to Sierra Gorda S.C.M.
1.6.2
16 September 2024
Agreement for the corporate guarantee to secure Sierra Gorda S.C.M.'s obligations
1.6.2
16 September 2024
Sierra Gorda S.C.M. revolving credit agreement with a syndicate of banks
1.6.2
Changes in the structure of the Group
29 February 2024
Acquisition of 100% of shares in the following companies: INVEST PV 40 Sp. z o.o.,
INVEST PV 58 Sp. z o.o. and INVEST PV 59 Sp. z o.o.,
1.2.1
20 May 2024
Declaration of bankruptcy of NANO CARBON Sp. z o.o. in liquidation
1.2.1
30 September 2024
1
Merger of KGHM Cuprum sp. z o.o. – CBR with Centrum Analityki sp. z o.o.
1.2.1
2 December 2024
2
Merger of Polska Grupa Uzdrowisk sp. z o.o. with Fundusz Hotele 01 Sp. z o.o. and Fundusz Hotele 01
Sp. z o.o. S.K.A.
1.2.1
Other
18 December 2024
Approval by the Supervisory Board of the Budget of KGHM Polska Miedź S.A. and of the Budget of the
KGHM Group for 2025
1.4.4
13 March 2025
Statement on the Company’s compliance with the corporate governance principles contained in Best
Practice of GPW Listed Companies 2021
3.1
1
Registration in the National Court Register
2
Registration in the National Court Register
KGHM Polska Miedź S.A. 7
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
1.1.2 The Company and the Group in the years 2017-2024 - synthetic overview
Basic items of the consolidated financial statements
2024
2023
2022
2021
2020
2019
2018
2017
Revenues from contracts with customers
PLN mn
35 320
33 467
33 847
29 803
23 632
22 723
20 526
20 358
Profit/(loss) for the period
PLN mn
2 870
(3 691)
4 774
6 155
1 797
1 421
1 658
1 525
Adjusted EBITDA
3
PLN mn
8 457
5 362
8 865
10 327
6 623
5 229
4 972
5 753
Total assets
PLN mn
53 892
51 383
53 444
48 027
42 780
39 409
37 237
34 122
Liabilities
PLN mn
22 834
22 753
21 298
20 889
21 699
19 207
18 012
16 337
Earnings per share (EPS)
4
PLN
14.34
(18.49)
23.86
30.78
9.00
7.11
8.29
7.84
Share price of the Company at the end of the
period
PLN
115.00
122.70
126.75
139.40
183.00
95.58
88.88
111.20
Net debt/EBITDA
5
0.8
1.0
0.8
0.6
0.9
1.5
1.6
1.3
Payable copper production
6
kt
729.7
710.9
733.1
753.7
709.1
701.6
633.9
656.4
Payable silver production
7
t
1 341
1 428
1 327
1 366
1 353
1 417
1 205
1 234
C1 payable copper production cost
8
USD/lb
2.67
2.87
2.20
1.96
1.59
1.70
1.81
1.59
Cash expenditures on property, plant and
equipment and intangible assets
PLN mn
5 855
4 776
4 118
3 890
3 457
3 232
2 875
2 796
Basic items of the separate financial statements
2024
2023
2022
2021
2020
2019
2018
2017
Revenues from contracts with customers
PLN mn
29 894
29 084
28 429
24 618
19 326
17 683
15 757
16 024
Profit/(loss) for the period
PLN mn
2 788
(1 153)
3 533
5 169
1 779
1 264
2 025
1 323
Adjusted EBITDA
PLN mn
4 463
3 563
5 400
5 474
4 458
3 619
3 416
4 160
Total assets
PLN mn
50 405
48 896
47 995
43 458
39 342
35 989
34 250
30 947
Liabilities
PLN mn
19 251
20 078
18 320
17 618
18 616
16 100
15 205
13 691
Earnings per share (EPS)
9
PLN
13.94
(5.77)
17.67
25.85
8.90
6.32
10.13
6.62
Electrolytic copper production
kt
588.7
592.4
586.0
577.6
560.4
565.6
501.8
522.0
Metallic silver production
t
1 316
1 403
1 298
1 332
1 323
1 400
1 189
1 218
C1 payable copper production cost
USD/lb
3.07
2.98
2.38
2.26
1.62
1.74
1.85
1.52
Cash expenditures on property, plant and
equipment and intangible assets
PLN mn
3 635
3 074
2 731
2 407
2 422
2 366
1 907
1 991
Macroeconomic data (average annual)
2024
2023
2022
2021
2020
2019
2018
2017
Copper prices per the LME
USD/t
9 147
8 478
8 797
9 317
6 181
6 000
6 523
6 166
Silver prices per the LBMA
USD/oz t
28.27
23.35
21.73
25.14
20.54
16.21
15.71
17.05
Exchange rate
USD/PLN
3.98
4.20
4.46
3.86
3.90
3.84
3.61
3.78
3
Comprises Sierra Gorda S.C.M. proportionally to the interest held (55%)
4
Attributable to shareholders of the Parent Entity.
5
Adjusted EBITDA for the year, excluding EBITDA of the joint venture Sierra Gorda S.C.M.
6
Comprises Sierra Gorda S.C.M. proportionally to the interest held (55%)
7
As above
8
As above
9
Attributable to shareholders of the Parent Entity.
KGHM Polska Miedź S.A. 8
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
1.2 BASIC PRINCIPLES OF THE COMPANY AND THE GROUP MANAGEMENT
1.2.1 Organisational structure of the Group and the Company and changes in the organisational structure in
2024
Organisational structure of the Company KGHM Polska Miedź S.A.
In 2024, the multi-divisional organisational structure of the Company operating under the name of KGHM Polska Miedź S.A.
consisted of the Head Office of the Company and 10 Divisions.
Diagram 1. Organisational structure of KGHM Polska Miedź S.A.
Mining
− Lubin Mine Division
− Polkowice-Sieroszowice Mine Division
− Rudna Mine Division
− Concentrators Division
− Tailings Division
Metallurgy
− Głogów Copper Smelter and Refinery
− Legnica Copper Smelter and Refinery
− Cedynia Wire Rod Plant
Other
− Head Office
− Mine-Smelter Emergency Rescue
Division
− Data Center Division
Entities subject to consolidation
At the end of 2024, the Group consisted of the Parent Entity KGHM Polska Miedź S.A., 36 direct and indirect subsidiaries
consolidated using the simultaneous method, and the KGHM INTERNATIONAL LTD. Group consolidated by including its
consolidated financial statements in the statements at the highest level of the Group's consolidation. A total of 64 entities
are subject to consolidation (including KGHM Polska Miedź S.A.).
At the end of 2024, two jointly controlled entities are measured using the equity method in the consolidated financial
statements: Sierra Gorda S.C.M. and NANO CARBON Sp. z o.o. in bankruptcy.
Towarzystwo Ubezpieczeń Wzajemnych "CUPRUM" whose assets, revenues and profit or loss do not have a material impact
on the data presented in the consolidated statement of financial position and the consolidated statement of comprehensive
income is excluded from consolidation.
The detailed structure of the KGHM Polska Miedź S.A. Group and the KGHM INTERNATIONAL LTD. Group as at 31 December
2024 is presented in the diagrams below.
KGHM Polska Miedź S.A. 9
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Diagram 2. KGHM Polska Miedź S.A. Group structure as at 31 December 2024
10
10
Percentages represent the total share of the Group
1/ joint venture accounted for using the equity method
2/ unconsolidated subsidiary
Subsidiaries consolidated using the indicator method
100%
100%
KGHM (SHANGHAI) COPPER
TRADING CO., LTD.
KGHM Polska Miedź S.A.
100%
100%
INOVA Spółka z o.o.
100%
OOO ZANAM VOSTOK
Polska Grupa Uzdrowisk
Sp. z o.o.
PeBeKa S.A.
100%
BIPROMET S.A.
100%
WPEC w Legnicy S.A.
PMT Linie Kolejowe
Sp. z o.o.
100%
TUW-CUPRUM /1
CBJ sp. z o.o.
100%
INVEST PV7 Sp. z o.o.
INVEST PV40 Sp. z o.o.
INVEST PV58 Sp. z o.o.
INVEST PV59 Sp. z o.o.
100%
Zagłębie Lubin S.A.
100%
„MCZ” S.A.
Walcownia Metali
Nieżelaznych „ŁABĘDY” S.A.
Cuprum Development
sp. z o.o.
100%
Future 3 Sp. z o.o.
100%
100%
Future 4 Sp. z o.o.
100%
100%
MERCUS Logistyka
sp. z o.o.
„Energetyka” sp. z o.o.
49%
99%
CENTROZŁOM
WROCŁAW S.A.
100%
87%
100%
PHU „Lubinpex”
Sp. z o.o.
100%
NITROERG SERWIS
Sp. z o.o.
NITROERG S.A.
87%
100%
100%
100%
NANO CARBON Sp. z o.o.
in bankruptcy /2
Uzdrowisko Świeradów
-Czerniawa Sp. z o.o.
99%
Uzdrowisko Połczyn
Grupa PGU S.A.
100%
Future 1 Sp. z o.o.
Future 5 Sp. z o.o.
100%
Uzdrowiska Kłodzkie S.A.
- Grupa PGU
100%
Uzdrowisko Cieplice
Sp. z o.o. - Grupa PGU
KGHM Metraco S.A.
100%
100%
99%
100%
KGHM CUPRUM
sp. z o.o. – CBR
100%
100%
POL-MIEDŹ TRANS
Sp. z o.o.
KGHM ZANAM S.A.
100%
KGHM INTERNATIONAL
LTD. Group
KGHM Kupfer AG
100%
85%
Group structure presented in a
separate diagram
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KGHM Polska Miedź S.A. 10
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Diagram 3. KGHM INTERNATIONAL LTD. Group Structure as at 31 December 2024
11
11
Percentages represent the total share of the Group
Subsidiaries consolidated using the indicator method
100%
Carlota Copper Company
100%
KGHMI HOLDINGS LTD.
100%
Quadra FNX FFI S.à r.l
100%
Carlota Holdings Company
100%
100%
Aguas de la Sierra Limitada
DMC Mining Services (UK) Ltd.
100%
DMC Mining Services
Colombia SAS
100%
FRANKE HOLDINGS LTD. /3
100%
3/ real share of the Group 80%
1/ joint venture accounted for using the equity method
2/ shares in the company FRANKE HOLDINGS LTD. are held by: Centenario Holdings Ltd. 66.2%,
KGHM International Ltd. 30.3% and FNX Mining Company Inc. 3.5%
Wendover Bulk Transhipment
Company
100%
100%
KGHM AJAX
MINING INC.
Robinson Nevada Mining
Company
Sugarloaf
Ranches Ltd. /1
80%
80%
FNX Mining Company Inc.
100%
0899196 B.C. Ltd.
100%
100%
Robinson Holdings (USA) Ltd.
KGHM Chile SpA
100%
55%
Sierra Gorda
S.C.M. /2
Centenario Holdings Ltd.
100%
Minera Carrizalillo SpA
100%
KGHM INTERNATIONAL LTD.
PROJECT NIKOLAS COMPANY
INC.
100%
DMC Mining Services Ltd.
100%
DMC Mining Services
Corporation
100%
Quadra FNX Holdings Chile
Limitada
FNX Mining Company USA
Inc.
100%
DMC Mining Services Chile
SpA
100%
DMC Mining Services
Mexico, S.A. de C.V.
100%
Quadra FNX Holdings
Partnership
100%
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KGHM Polska Miedź S.A. 11
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Polish companies
In 2024, the group of Polish companies has increased by 3 special purpose companies, which are operators of photovoltaic
farms, i.e.: INVEST PV40 Sp. z o.o., INVEST PV58 Sp. z o.o., INVEST PV59 Sp. z o.o., however, the size of the group of Polish
companies did not change as three of them were acquired by other group companies as a result of merger processes within
the group.
Other equity investments in the group of domestic companies completed in 2024 included the acquisitions of newly-issued
shares in the increased share capital of several direct and indirect subsidiaries.
Detailed information is provided in the tables below.
Table 1. Equity investments of KGHM Polska Miedź S.A.
Acquisition of
newly-issued
shares of
PMT Linie
Kolejowe
Sp. z o.o.
On 19 January 2024 the Extraordinary Shareholders Meeting adopted a resolution to increase the company’s share
capital by PLN 70.2 million. All of the newly-issued shares in the increased share capital were acquired by KGHM
Polska Miedź S.A. and fully paid for in cash on 31 January 2024. The share capital of the Company following the
increase amounts to PLN 104.7 million. The increase was registered in the National Court Register on 12 April
2024. The funds raised due to the increase in share capital will be used to advance the investment project called
“Modernisation of the Railway Infrastructure”. This is the second of four tranches of funds to be contributed by
KGHM Polska Miedź S.A. to the company as part of the increases in the share capital for the purpose of acquiring
non-current assets in order to realise the above-mentioned investment project. The first tranche in the amount of
PLN 17.2 million was contributed in July 2023.
KGHM Polska Miedź S.A. owns 100% of the shares of the company.
Acquisition of
100% of shares
in the
companies:
− INVEST PV40
Sp. z o.o.
− INVEST PV58
Sp. z o.o.
INVEST PV59
Sp. z o.o.
On 29 February 2024, KGHM Polska Miedź S.A. acquired shares in three further special purpose companies, i.e.
INVEST PV 40 Sp. z o.o., INVEST PV 58 Sp. z o.o. and INVEST PV 59 Sp. z o.o., which are operators of photovoltaic
farms, respectively - PV Głogów 1, PV Głogów 2 with the total capacity of 10 MW, located in the Głogów municipality,
Lower Silesia Voivodeship, PV Gniewino 1, PV Gniewino 2 with the total capacity of 14 MW, located in the Gniewino
municipality, Pomeranian Voivodeship, and PV Koryta I, PV Koryta II, PV Koryta III with the total capacity of 17.9
MW, located in the Daszyna municipality, Łódź Voivodeship.
The transaction price amounted to PLN 215 million (PLN 141 million paid in 2023, PLN 74 million paid in the current
reporting period), of which PLN 41 million was the payment for the acquisition of shares, while PLN 174 million
was related to subrogation of liabilities (owner loans). As at the end of the reporting period, the final purchase
price of the shares was determined to amount to PLN 31 million. The transaction price includes the companies'
working capital of PLN 19 million. The total value of the shares (enterprise value) of the aforementioned three
companies amounted to PLN 186 million.
In 2023, KGHM Polska Miedź S.A. acquired 100% of the shares in the first special purpose company INVEST PV7
sp. z o.o., the operator of the PV Żuki photovoltaic farm with the capacity of 5.2 MW located in the Turek
municipality, Greater Poland Voivodeship.
Acquisition of
shares of
Zagłębie Lubin
S.A.
On 22 October 2024 the Extraordinary General Meeting of the company adopted a resolution on increasing the
company's share capital by PLN 25 million. All of the newly-issued shares in the increased share capital were
acquired by KGHM Polska Miedź S.A. and fully paid for in cash on 31 October 2024. The share capital of the
Company following the increase amounts to PLN 216.7 million. Allocation of funds from the increase in the share
capital – supplementation of working capital. The increase was registered in the National Court Register on
8 November 2024.
KGHM Polska Miedź S.A. owns 100% of the shares of the company.
Table 2. Mergers of companies within the KGHM Polska Miedź S.A. Group.
Merger of KGHM
Cuprum sp. z o.o.
- CBR with
Centrum
Analityki
sp. z o.o.
On 18 September 2024, the Extraordinary Shareholders' Meetings of the companies: KGHM Cuprum sp. z o.o. - CBR
(the acquiring company) and KGHM Centrum Analityki sp. z o.o. (the acquired company), adopted the resolutions
on consent for the merger (merger by acquisition) of the above-mentioned companies, through the transfer to the
acquiring company of all assets of the acquired company in exchange for 1 187 newly-issued shares in the share
capital of the acquiring company, created as a result of an increase in the share capital of the acquiring company by
PLN 0.6 million, which the acquiring company granted to the sole shareholder of the acquired company, i.e. the
Company KGHM Polska Miedź S.A. As a result of the foregoing, the share capital of KGHM CUPRUM sp. z o.o. - CBR
was increased from PLN 17.3 million to the amount of PLN 17.9 million. On 30 September 2024, the merger of the
aforementioned companies was registered in the National Court Register.
Merger of Polska
Grupa Uzdrowisk
sp. z o.o.
with Fundusz
Hotele 01
Sp. z o.o. and
Fundusz Hotele
01 Sp. z o.o.
S.K.A.
On 30 October 2024, the Extraordinary Shareholders' Meetings of the companies: Polska Grupa Uzdrowisk sp. z o.o.
(the acquiring company) and Fundusz Hotele 01 Sp. z o.o. and Fundusz Hotele 01 Spółka z o.o. S.K.A. (the acquired
companies), adopted resolutions on consent to the merger (merger by acquisition) of the above-mentioned
companies, through the transfer of all assets of the acquired companies to the acquiring company. The acquired
companies are non-operating subsidiaries of the acquiring company. Due to the 100% share in the acquired
companies by the acquiring company, the merger took place without increasing the share capital of the acquiring
company. On 2 December 2024, the merger of the aforementioned companies was registered in the National Court
Register.
KGHM Polska Miedź S.A. 12
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Amongst the group of Polish indirect subsidiaries, Polska Grupa Uzdrowisk sp. z o.o. (hereinafter: PGU), in which KGHM
Polska Miedź S.A. holds 100% of the shares, acquired shares in the increased share capital of the subsidiaries - companies
from the spa industry, allocating the funds for the realisation of investments. The funds contributed by KGHM Polska Miedź
S.A. to the share capital of PGU in 2022 provided the source of funding for increases in share capitals.
Table 3. Equity investments of an indirect subsidiary - Polska Grupa Uzdrowisk sp. z o.o.
Acquisition of
newly-issued
shares of
Uzdrowisko
Świeradów-
Czerniawa Sp. z
o.o. – Grupa PGU
On 25 January and 22 March 2024, in total PGU acquired 303 newly-issued shares in the increased share capital of
the company, for the total amount of PLN 0.6 million. The increase in share capital was made in December 2023,
through the issuance of 307 shares with the total nominal value of PLN 0.2 million. The increase in share capital
was registered in the National Court Register on 18 April 2024. After the increase, the company's share capital
amounts to PLN 7.8 million. As a result of the foregoing, the share of PGU in the company decreased from 99.48%
to 99.46%. The slight decrease in the shareholding results from the acquisition of shares by minority shareholders,
that is former and current employees of the company.
Acquisition of
newly-issued
shares of
Uzdrowisko
Cieplice Sp z o.o.
– Grupa PGU
On 25 January and on 4 March 2024, in total PGU acquired 53 758 newly-issued shares in the increased share capital
of the company, for the total amount of PLN 8.9 million. The increase in share capital was made in December 2023,
through the issuance of 53 799 shares with the total nominal value of PLN 2.7 million. The increase in share capital
was registered in the National Court Register on 17 April 2024. After the increase, the company's share capital
amounts to PLN 10.6 million. As a result of the foregoing, the share of PGU in the company increased from 98.85%
to 99.12%.
Acquisition of
newly-issued
shares of
Uzdrowisko
Połczyn Grupa
PGU S.A.
On 16 February 2024 the Extraordinary General Meeting of the company adopted a resolution on increasing the
company's share capital by PLN 6.9 million. All newly-issued shares in the increased share capital were acquired by
Polska Grupa Uzdrowisk sp. z o.o. and paid for in cash on 8 March 2024 in the amount equal to the value of the
issuance, i.e. PLN 12 million. The share capital of the company following the increase amounts to PLN 25.7 million.
The increase was registered in the court on 26 March 2024.
Polska Grupa Uzdrowisk sp. z o.o. is the sole shareholder of the company.
Acquisition of
newly-issued
shares of
Uzdrowiska
Kłodzkie S.A. –
Grupa PGU
On 16 February 2024 the Extraordinary General Meeting of the company adopted a resolution on increasing the
company's share capital by PLN 8.2 million. All of the newly-issued shares in the increased share capital were
acquired by PGU and paid for in cash in the amount equal to the value of the issuance, i.e. PLN 17.6 million. The
share capital of the company following the increase amounts to PLN 55.9 million. The increase of the share capital
was registered in the National Court Register on 20 March 2024. Polska Grupa Uzdrowisk sp. z o.o. is the sole
shareholder of the company.
Other changes
Pursuant to the court decision of 20 May 2024, NANO CARBON Sp. z o.o. in liquidation (a jointly-controlled entity in which
a subsidiary, Polska Grupa Uzdrowisk sp. z o.o., holds a direct share of 49%) was declared bankrupt.
International companies
In 2024, a new special purpose company “Project Nikolas Company Inc.” was established within the group of international
companies for the purpose of disposal of a part of KGHM's assets in the Sudbury Basin, to which the following divested
Sudbury assets were transferred from the Canadian company FNX Mining Company Inc.: the McCreedy West, Levack (with
Morrison deposit), Podolsky mines and the following exploration concessions: Kirkwood, Falconbridge, NW Foy, Rand and
North Range. Pursuant to the Share Purchase Agreement signed on 11 September 2024, the sales transaction of the
company Project Nikolas Company Inc. was finalised on 28 February 2025. The new owner of the special purpose company,
and therefore of the disposed assets of the Sudbury Basin, is the company Magna Mining Inc.
In 2024, the process of liquidation of one entity was started. The liquidation of KGHM Kupfer AG., whose current name is
KGHM Kupfer AG i.L., has been in progress since 1 May 2024.
Table 4. Equity investments in international assets
Acquisition of
shares of KGHM
Ajax Mining Inc.
with its
registered office
in Canada
On 13 February 2024, KGHM INTERNATIONAL LTD. and Abacus Mining & Exploration Corporation (joint venture
partner), increased the share capital of the company KGHM Ajax Mining Inc. by the amount of CAD 1 400 000.00,
proportionally to their share in the share capital of the Company (i.e. KGHM INTERNATIONAL LTD. 80%; Abacus
Mining & Exploration Corporation 20%), acquiring in exchange newly-issued shares – KGHM INTERNATIONAL LTD.
112 shares and Abacus Mining & Exploration Corporation 28 shares, i.e. the total of 140 newly-issued shares in the
share capital of KGHM Ajax Mining Inc.).
On 6 December 2024, KGHM INTERNATIONAL LTD. and Abacus Mining & Exploration Corporation (joint venture
partner), increased the share capital of the company KGHM Ajax Mining Inc. by the amount of CAD 3 000 000.00,
proportionally to their share in the share capital of the Company (i.e. KGHM INTERNATIONAL LTD. 80%; Abacus
Mining & Exploration Corporation 20%), acquiring in exchange newly-issued shares – KGHM INTERNATIONAL LTD.
240 shares and Abacus Mining & Exploration Corporation 60 shares, i.e. the total of 300 newly-issued shares in the
share capital of KGHM Ajax Mining Inc.).
KGHM Ajax Mining Inc. is developing an open pit copper and gold mine in Canada (the Ajax project). The project is
currently suspended (care & maintenance). In accordance with the agreement between the partners on financing of
the Ajax project, the amount of the Abacus Mining & Exploration Corporation's share in the increase in share capital
was financed by KGHM INTERNATIONAL LTD. in the form of a loan granted to Abacus Mining & Exploration
Corporation.
KGHM Polska Miedź S.A. 13
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Table 5. Loans granted to international companies
Granting of a
loan to the
subsidiary KGHM
INTERNATIONAL
LTD.
On 12 February 2024, KGHM Polska Miedź S.A. granted a loan to its subsidiary, KGHM INTERNATIONAL LTD. in the
amount of USD 30.6 million (PLN 122.9 million, at the exchange rate of USD/PLN 4.0189 as at 15 February 2024), for
the repayment of the loan granted to Robinson Holdings (USA) Ltd. and further distribution of funds in the form of
a loan repayment to Robinson Nevada Mining Company, to finance the purchase of mining machinery in the first
half of 2024. The interest rate of the loan is under arm’s length conditions. The agreement is in force until 31 August
2029.
On 22 May 2024, KGHM Polska Miedź S.A. granted a loan to its subsidiary, KGHM INTERNATIONAL LTD. in the amount
of USD 17.5 million (PLN 68.7 million, at the exchange rate of USD/PLN 3.9243 as at 22 May 2024), for the repayment
of the loan granted to Robinson Holdings (USA) Ltd. and further distribution of funds in the form of a loan repayment
to the Robinson Nevada Mining Company, to finance the purchase of machines to perform independent work on
the Tailings Storage Facility of the Robinson mine. The interest rate of the loan is under arm’s length conditions.
The agreement is in force until 30 September 2029.
1.2.2 Changes in the basic principles of managing the Group
In 2024, there were no changes in the principles of managing the group in domestic or international companies.
1.2.3 Reporting segments
The Group’s main entities, which are engaged in the mining sector, comprise three primary reporting segments which are
independently evaluated by management bodies. These are: KGHM Polska Miedź S.A., KGHM INTERNATIONAL LTD. and
Sierra Gorda S.C.M. Other companies, excluding Future 1 Sp. z o.o., Future 3 Sp. z o.o., Future 4 Sp. z o.o., Future 5 Sp. z o.o.
are part of the segment called Other segments.
The following diagram presents the significant production assets and projects underway within the reporting segments:
KGHM Polska Miedź S.A., KGHM INTERNATIONAL LTD., Sierra Gorda S.C.M. and Other segments.
Diagram 4. Reporting segments of the KGHM Polska Miedź S.A. Group
KGHM Polska Miedź S.A.
KGHM INTERNATIONAL
LTD.
Sierra Gorda S.C.M.
Other segments
Activities
Mined and metallurgical
production of metals –
Cu, Ag, Au
Mined production of
metals - Cu, Ni, Au, Pt,
Pd, Ag
Mined production of
metals - Cu, Mo, Au, Ag
− Companies supporting
the core business of
KGHM Polska Miedź
S.A.
− Companies
comprising the so-
called Polska Grupa
Uzdrowisk
− Companies playing an
important role in
advancing CSR policy,
− Other companies,
including special-
purpose companies in
the holding structure
Main production
assets
Underground mines
− Lubin mine
− Polkowice-
Sieroszowice mine
− Rudna mine
Metallurgical plants
− Legnica Copper
Smelter and Refinery
− Głogów Copper
Smelter and Refinery
Cedynia Wire Rod Plant
Robinson mine in the
USA (open pit)
Sierra Gorda mine in
Chile (open pit)
Most important
development
projects
− Głogów Głęboki-
Przemysłowy (Deep
Głogów)
− Pre-production
projects and
exploration projects in
south-west Poland
− Victoria project in the
Sudbury Basin in
Canada - construction
of an underground
copper and nickel
mine
− Sierra Gorda Oxide
project in Chile
The following companies were not included in any of the aforementioned segments:
− Future 1 Sp. z o.o., which acts as a holding company with respect to the KGHM INTERNATIONAL LTD. Group,
− Future 3 Sp. z o.o., Future 4 Sp. z o.o., Future 5 Sp. z o.o. (which operate in the structure related to the establishment of
a Tax Group).
These companies do not conduct operating activities which could impact the results achieved by individual segments, as a
result of which their inclusion could disrupt the data presented in the consolidated financial statements due to the
significant internal settlements with the other entities from the Group.
The segments KGHM Polska Miedź S.A., KGHM INTERNATIONAL LTD. and Sierra Gorda S.C.M. have separate Management
Boards, which report their operational results to the Management Board of the Parent Entity.
KGHM Polska Miedź S.A. 14
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
The segment KGHM Polska Miedź S.A. only includes the Parent Entity, while the segment Sierra Gorda S.C.M. only includes
the joint venture Sierra Gorda. The above diagram presents the other companies of the KGHM Polska Miedź S.A. Group
with a breakdown by segment: KGHM INTERNATIONAL LTD. and Other segments.
1.3 CHARACTERISTICS OF THE COMPANY AND THE GROUP
1.3.1 Business model of KGHM Polska Miedź S.A.
The KGHM Polska Miedź S.A. Group is one of ten largest producers of mining copper worldwide and the second largest
producer of silver
12
. It has over 35 thousand employees in more than 60 companies on four continents - Europe, North
America, South America and Asia. The activity of the KGHM Group is based on seven key segments that form a complete
value creation chain. They include areas such as exploration of raw materials, their mining, production, transport, delivery
of products to customers and stakeholders, as well as responsible waste management, in order to mitigate the adverse
impact on the environment.
Diagram 5. Business model of the KGHM Polska Miedź S.A. Group
The KGHM Group's business model also includes complementary subsidiaries, extending the core production business in
areas such as manufacturing of mining machinery, explosives and metal recycling, among others. Production in the KGHM
Group is a fully integrated technological process in which the end product of one phase becomes a semi-finished product
used in the next phase. This structure allows for efficient use of raw materials and cost optimisation.
12
Source: CRU, December 2024 and World Silver Survey, April 2024, based on production volumes in 2023.
KGHM Polska Miedź S.A. 15
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Table 6. Description of the business model of the KGHM Polska Miedź S.A. Group
Segment
What does it involve?
Why is it important?
Exploration and
evaluation
The stage of geological work associated with the evaluation of
new areas of potential mineralisation, known as exploration.
This stage aims to document new, economically viable deposits
and ends with the preparation of geological documentation for
the particular concession area.
Safeguarding the perspective of continued
mining of documented ore resources is one of
the cornerstones of KGHM's development and
the growth of the Company's value.
Ore mining
Mining of deposits is performed with the use of the open-pit
method or - as in the case of the Parent Entity - the
underground method using blasting technology and self-
propelled mining machinery.
Ore mining is the basic element of KGHM's
business which enables the production of metals
and sales on the market.
Ore enrichment
Copper ore enrichment is the mechanical processing resulting
in the production of a concentrate with copper content
enabling its metallurgical processing.
The enrichment process is necessary as the
copper ore deposits mined by KGHM in Poland
have an average copper content of
approximately 1.5%. The technology used allows
for the effective, up to 90%, recovery of copper,
silver and other elements from the mined ore.
Smelting and
refining
Production in smelters of KGHM Polska Miedź S.A. is based
mainly on the processing of own copper concentrates, but it
also uses purchased raw materials. Among other things,
electrolytic copper as well as silver and gold bars are produced
at this stage.
Due to the production capacity of Polish copper
smelters, the KGHM Group is one of the world
leaders in the metallurgical industry.
Processing
Copper cathodes produced in KGHM's smelters are processed
into copper wire rod, oxygen-free wire and low-alloy wire
(Cedynia Wire Rod Division).
Processed products of a consistent high quality
respond to market needs and find buyers
worldwide.
Sales and trading
Sales are carried out while ensuring the safety of trading,
taking into account the principles contained in the sales, credit
risk management and market risk policies. One of the solutions
aimed at providing the security of trading is the appropriate
diversification of sales - both product and geographic - or
diversification of customers.
Ensuring the sale of manufactured products
guarantees a sustainable and stable income.
Trade is based on the Fair Trade principles.
Restoration
Safe and environmentally-friendly closure of mines, sand pits
and other industrial facilities.
The element of KGHM's environmental policy
and the basis for responsible business conduct.
The responsibility whose fulfilment builds trust
and credibility.
CE/recycling
Product lifecycle based on the circular economy - the Circular
Economy approach at every stage of the value chain.
+ complementary value chain:
Stakeholders
Customers, consumers and partners as a determinant of the KGHM Group's responsible business standards.
Activities
supporting the
Core Production
Business
R&D activities, provision of energy and heat, including from RES, production of explosives, production and
servicing of mining machinery, transport services, sales and recycling services
Other
Sponsoring and CSR activities, among others through the KGHM Foundation, as well as healthcare and spa
activities
KGHM Polska Miedź S.A. 16
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Table 7. Value-creating capitals of the KGHM Polska Miedź S.A. Group
Type of capital
Accumulation
Development
Security
Financial capital
Financial resources required for the
implementation of investment in
mining, technology development and
recycling.
Funds raised through sales
of products and services,
bond issuances and cost
optimisation.
Investment in new
technologies, development of
deposit mining and recycling
initiatives.
Long-term financial
planning, risk management
and diversification of
revenue sources. Bond
issuance program.
Productive capital
The basic raw materials for
production include copper ore, silver
and gold. These materials are mined
in KGHM's mines and enriched in
smelting and processing operations.
Mining of raw materials
such as copper, silver and
gold, which are the
foundation of the activity.
Scrap processing.
Manufacture of equipment
and machinery.
Technological components and
equipment support the
production operations.
Development through
technological innovation in raw
material processing and
optimisation of smelting
processes.
Modernisation of the
infrastructure, investing in
technological equipment
and implementing
processes to increase
production efficiency.
Natural capital
Natural resources, such as raw
materials, energy and water, are
managed while taking into
consideration their limited
availability.
Use of natural resources
such as energy, water and
mineral resources.
Implementing solutions based
on circular economy, waste
minimisation and scrap
recycling.
Rational and efficient
management of natural
resources and reduction of
emissions and
environmental impacts.
Intellectual capital
Technological expertise and
innovative processes developed by
specialised R&D teams. Investment in
solutions reducing carbon footprint.
Accumulation of
knowledge and expertise
through research,
collaboration with
universities and
technology development.
Investment in innovative
processes to reduce carbon
footprint and develop new
industrial technologies.
Maintaining specialised R&D
teams and protecting
intellectual property.
Human capital
Qualified employees providing the
foundation of the business.
Competence development and
occupational safety.
Attracting and engaging
qualified employees.
Programmes addressed to
young people (e.g.
“Competent in the
industry”).
Training programmes,
certifications and activities
supporting occupational safety
and competence development.
Creating a stable working
environment, care for
employees' well-being,
motivation and adapting
their skills to new
technological requirements.
Social and relational capital
Partnerships with local communities
and relationships with stakeholders
enabling stable operation in different
regions.
Cooperation with local
communities, indigenous
people and building
relationships with
stakeholders.
Supporting local initiatives and
implementing ESG and CSR
compliant practice of
collaboration. Establishment of
a substantive unit dedicated to
cooperation with local
government units.
Building long-term
partnerships and ensuring
compliance with regulations
and social expectations.
KGHM Polska Miedź S.A. 17
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
1.3.2 Our assets
The KGHM Polska Miedź S.A. Group holds geographically diversified mining assets (copper ore mines with associated
minerals, such as silver, molybdenum, nickel, gold and other metals) located in Poland, the USA, Chile and Canada as well
as copper smelters in Poland. The key international asset – the Sierra Gorda mine, which is a joint venture of KGHM
INTERNATIONAL LTD. and South32 – is located in Chile. In addition, the KGHM Polska Miedź S.A. Group has a mine project
which is at the pre-operational phase (Victoria), as well as other exploration projects.
Diagram 6. Location of the production assets of the KGHM Polska Miedź S.A. Group
Poland
Polkowice-Sieroszowice mine
Location
Lower Silesia, Poland
The Polkowice-Sieroszowice mine is located in Lower Silesia, to the
west of the town of Polkowice. Currently, it conducts mining works
in four mining areas: Polkowice, Radwanice Wschodnie,
Sieroszowice and in a part of the Głogów Głęboki – Przemysłowy
(Deep Głogów) area.
Within the Sieroszowice mining area, there are also rich deposits of
rock salt above the copper-bearing horizon.
Mining of the deposit is conducted using room-and-pillar methods
with natural roof settlement, using blasting technology.
The Polkowice-Sieroszowice mine’s current production capacity is
around 12.2 million tonnes of ore per year.
Ownership
KGHM Polska Miedź S.A. Division
Type of mine
underground
Main ore type
copper ore
Associated metals
silver, lead, rock salt, gold
Type of orebody
stratiform
End product
copper ore
Copper in extracted
ore in 2024
200.2 kt
Legend:
Mines of KGHM
Mine projects of KGHM
Metallurgical facilities of KGHM
CANADA
(Ontario, Sudbury Basin)
McCreedy
West (Cu, Ni, TPM)
Victoria (Cu, Ni, TPM)
Exploration in the region
CANADA
(British Columbia)
Ajax
(Cu, Au)
USA
(Nevada & Arizona)
Robinson (Cu, Au, Mo)
Carlota
(Cu)
Exploration in the region
CHILE
(Antofagasta & Atacama)
Sierra
Gorda
(Cu, Mo, Au, Ag)
Exploration in the region
POLAND
(Lower Silesia)
Polkowice
-
Sieroszowice (Cu, Ag)
Lubin (Cu, Ag)
Rudna (Cu, Ag)
Deep Głogów (Cu, Ag)
Exploration in the region
Głogów I & Głogów II smelters/refineries
Legnica smelter/refinery
Cedynia (wire rod)
KGHM Polska Miedź S.A. 18
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Rudna mine
Location
Lower Silesia, Poland
The Rudna mine is located in Lower Silesia, to the north of the town
of Polkowice. It mines the copper ore deposit in the Rudna mining
area as well as in parts of the mining areas of Sieroszowice, Lubin-
Małomice and Głogów Głęboki-Przemysłowy (Deep Głogów).
The deposit is currently mined at a depth from 844 meters to 1 300
meters. Mining is conducted using room-and-pillar methods with
natural roof settlement with hydraulic backfill, using blasting
technology. The current average production capacity is approx.
11.8 million tonnes of ore per year.
Ownership
KGHM Polska Miedź S.A. Division
Type of mine
underground
Main ore type
copper ore
Associated metals
silver, lead, gold
Type of orebody
stratiform
End product
copper ore
Copper in extracted
ore in 2024
180.4 kt
Lubin mine
Location
Lower Silesia, Poland
The Lubin mine is located in Lower Silesia, Poland, to the north-
west of the town of Lubin. It mines the copper ore deposit in the
mining area Lubin-Małomice at a depth from 550 meters to 1006
meters.
Mining is conducted using room-and-pillar methods with natural
roof settlement with hydraulic backfill, in the vicinity of the support
pillar of the town of Lubin, using blasting technology.
The current capacity of the mine is approximately 8.4 million
tonnes of ore per year.
Ownership
KGHM Polska Miedź S.A. Division
Type of mine
underground
Main ore type
copper ore
Associated metals
silver, lead, gold
Type of orebody
stratiform
End product
copper ore
Copper in extracted
ore in 2024
70.9 kt
Głogów Copper Smelter and Refinery
Location
Lower Silesia, Poland
A complex of metallurgical plants located in Głogów comprising
two copper concentrate smelting lines based on the one-stage
smelting of concentrate in a flash furnace directly into blister
copper. Apart from electrolytic copper, the Głogów Copper Smelter
and Refinery produces crude lead (around 30 thousand tonnes
annually), silver (around 1400 tonnes), gold (around 3 tonnes),
sulphuric acid (over 550 thousand tonnes), technical selenium and
nickel sulphate.
Ownership
KGHM Polska Miedź S.A. Division
Type of metallurgical
plant
smelter/refinery
End product
electrolytic copper
Electrolytic copper
production in 2024
466.1 kt
Legnica Copper Smelter and Refinery
Location
Lower Silesia, Poland
The copper smelter and refinery located in Legnica with a current
production capacity of 123 thousand tonnes of electrolytic copper.
In operation since the 1950s based on shaft furnace technology.
Apart from electrolytic copper, the plant also annually produces
around 30 thousand tonnes of refined lead and also around 100
thousand tonnes of sulphuric acid, as well as copper sulphate and
nickel sulphate.
Ownership
KGHM Polska Miedź S.A. Division
Type of metallurgical
plant
smelter/refinery
End product
electrolytic copper
Electrolytic copper
production in 2024
122.6 kt
Cedynia Wire Rod Plant
Location
Lower Silesia, Poland
Production at the Cedynia Wire Rod Plant, located in the vicinity of
Orsk, is based on the use of copper cathodes from the Głogów
Copper Smelter and Refinery and from the Legnica Copper Smelter
and Refinery. The basic product of the Cedynia Wire Rod Plant is
copper wire rod produced in a Contirod line amounting to around
270 thousand tonnes annually and around 18 thousand tonnes
annually of oxygen-free copper wire rod produced in an UPCAST
line, including oxygen-free, silver-bearing copper wire rod.
Ownership
KGHM Polska Miedź S.A. Division
Type of metallurgical
plant
processing
End product
copper wire rod and Cu-OFE rod
Production in 2024
271.0 kt of copper wire and 16.2 kt of
Cu-OFE rod
KGHM Polska Miedź S.A. 19
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
United States
Robinson mine
Location
Nevada, USA
The mine is located in White Pine county, Nevada, USA, around 11
km west of Ely (approx. 400 km north of Las Vegas), in the Egan
range, at an average altitude of 2 130 meters a.s.l., near highway
no. 50.
The mine is comprised of 3 large pits: Liberty, Tripp-Veteran and
Ruth. The Ruth pit is currently in operation and, from the third
quarter of 2024, the Liberty pit.
The sulphide ore is extracted by conventional methods, and is then
enriched through flotation. The end product is copper and gold
concentrate, and separately molybdenum concentrate.
Ownership
100% KGHM INTERNATIONAL LTD.
Type of mine
open pit
Main ore type
copper ore
Associated metals
gold and molybdenum
Type of orebody
porphyry/skarn
End product
copper and gold concentrate,
molybdenum concentrate
Payable copper
production in 2024
55.9 kt
Life of mine
12 years
Carlota mine
Location
Arizona, USA
The Carlota mine is located in the western part of the United States,
in the Miami-Globe mining region, in the state of Arizona at an
altitude of 1 300 meters a.s.l. Surrounding the mine is
mountainous, desert terrain.
Copper ore extraction by the Carlota mine is by conventional
methods typical for open-pit metals mines, i.e. the ore is mined by
blasting and then is transported by haulage trucks.
Ownership
100% KGHM INTERNATIONAL LTD.
Type of mine
open pit
Main ore type
copper ore
Type of orebody
porphyry
End product
copper cathodes
Payable copper
production in 2024
2.6 kt
Life of mine
4 years
In 2023, access work was commenced while in the fourth quarter of 2024, ore was mined from the Cactus open pit - Phase III, allowing the
mine life to be extended to 2028. Due to the nature of the oxide ore, it is processed using the heap leach, solvent-extraction and
electrowinning method. The end product is electrolytic copper in the form of cathodes.
Canada
Sudbury Basin
Location
Sudbury, Ontario, Canada
The Sudbury Basin is located in central Ontario in Canada, approx.
400 km north of Toronto. In this region, KGHM INTERNATIONAL
LTD. owns a variety of assets, though since April 2019 mining has
only been conducted in the underground McCreedy West mine,
due to the fact that the Morrison/Levack mine has been placed into
care & maintenance. Extraction is performed through mining
methods which are dependent on the geometry of the deposit –
mainly a mechanised method of selective extraction using
undercutting of successive levels from bottom to top and the
separation of sub-levels.
Ownership
100% KGHM INTERNATIONAL LTD.
Type of mine
underground
Main ore type
copper, nickel, platinum, palladium
and gold ore
Type of orebody
footwall/contact Ni
End product
copper and nickel ore with precious
metals
Payable copper
production in 2024
2.0 kt
Life of mine
5 years
All of the ore extracted from the mine, containing copper, nickel and precious metals, is processed in the Clarabelle plant in Sudbury,
owned by Vale.
In 2024, the disposal process of part of KGHM's assets in the Sudbury Basin was continued, resulting in signing of the Sale Purchase
Agreement in a special purpose company to Magna Mining Inc. on 11 September 2024.The finalisation of the divestment process and the
closure of the transaction, resulting in the transfer of operational control of the disposal assets and thus updating KGHM's asset portfolio,
is expected in the first quarter of 2025.
KGHM Polska Miedź S.A. 20
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Victoria project
Location
Sudbury Basin, Ontario, Canada
This project is located in the province of Ontario, around 35 km
west of the town of Sudbury. In 2002, rights were acquired to the
mineral deposit in the Victoria area and a campaign of exploration
in this region commenced. The current development scenario for
the project calls for the sinking of two shafts to access the deposit
(a production shaft and a ventilation shaft).
Based on analytical work performed in 2017, the current base
scenario assumes the Victoria project will be developed in two
stages, comprised of the sinking of a first shaft along with
additional exploration, followed by a second shaft for production.
Ownership
100% KGHM INTERNATIONAL LTD.
Type of mine
underground
Main ore type
copper-nickel ore
Associated metals
gold, platinum and palladium
End product
copper, nickel and precious metals
ore
Forecast annual
production
15 kt of nickel, 18 kt of copper
Life of mine
15 years
In 2024, work on the project site comprising the development of surface infrastructure and the sinking of the exploration shaft continued.
As at the end of 2024, the shaft excavation was at a level of approximately 760 meters below the shaft headframe. Underground stations
at the 300L and 600L level were also constructed. Moreover, in 2024, surface work was also continued, including the construction of the
mine site drainage system, mine water reservoir, waste drainage system, construction of the workshop and the warehouse, site
preparation work for the second waste rock dump. Engineering work also continued, as well as actions related to cooperation with key
stakeholders in the project.
Ajax project
Location
Kamloops, British Columbia, Canada
The Ajax project is located in British Columbia in Canada, 400 km
north-east of Vancouver near the town of Kamloops.
The project assumes the construction of an open-pit copper and
gold mine and an ore processing plant, with associated
infrastructure. Up to 2016 work had been carried out on a
Feasibility Study for the project, setting out the preliminary
economic conditions for the venture.
In compliance with Canadian law, the Ajax project underwent the
Environmental Assessment process.
Ownership
KGHM INTERNATIONAL LTD. 80%,
Abacus Mining and Exploration Inc.
20%
Type of mine
open pit
Main ore type
copper ore
Associated metals
precious metals (gold and silver)
End product
copper concentrate
Forecast annual
production
53 kt of copper, 114 thousand troy
ounces of gold
Life of mine
19 years
In 2017, the Ministers of Environment and of Energy, Mines and Petroleum Resources of British Columbia (provincial authorities) decided
against the granting of an Environmental Assessment Certificate (EA Certificate) for the project.
In 2018, the Government of Canada, through the Governor-in-Council (federal authorities), issued a negative decision regarding the
realisation of the Ajax project.
As a result of the decision to not grant an Environmental Assessment Certificate, in 2024 work continued which was mainly related to
monitoring and securing of the project terrain in accordance with the regulatory requirements.
KGHM Polska Miedź S.A. 21
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chile
Sierra Gorda mine and Sierra Gorda Oxide project
Location
Region II, Chile
The Sierra Gorda mine is located in the Atacama desert, in the
Sierra Gorda administrative area in the Antofagasta region, in
northern Chile, approx. 60 km south-west of the city of Calama.
The mine is situated at an altitude of 1 700 meters a.s.l. and 4 km
from the town of Sierra Gorda.
On 1 July 2015, the Sierra Gorda mine commenced commercial
production (since then it has prepared statements of profit or loss).
The ore extraction comprises its extraction using explosives,
loading and hauling away in trucks to the processing plant, where
it is subsequently crushed and milled.
The end product of Sierra Gorda’s processing plant is copper
concentrate and molybdenum concentrate.
Since January 2023, the Sierra Gorda mine has been using 100%
electricity from renewable sources - green energy is one of Sierra
Gorda's strategic objectives.
Ownership
13
55% KGHM INTERNATIONAL LTD.,
45% South32
Type of mine
open pit
Main ore type
copper ore
Associated metals
molybdenum, gold
End product
copper concentrate, molybdenum
concentrate
Payable production in
2024
146.4 kt of copper in concentrate,
6.0 million pounds of molybdenum in
concentrate – on a 100% basis, share
of KGHM Polska Miedź S.A. is 55%
Life of mine
23 years for the current deposit
based on phase 1 of the investment.
In addition, a possibility exists of
extending the operation to include
new deposits.
In 2024, design studies were continued on the project involving the construction of the 4th production line of the processing plant, and
they are on the advanced stage of preparing the feasibility study. The expected, potential increase in ore processing (on a 100% basis) is
approx. 18% up to 57-58 million tonnes per year.
The Sierra Gorda Oxide project involves the leaching of the copper oxide ore of Sierra Gorda on a permanent heap and the production
of high-quality copper cathodes in a solvent extraction and electrowinning (SX-EW) installation, with production capacity of approximately
30 thousand tonnes/year. At present most of the oxide ore planned for processing has already been excavated and is currently stored
near the site of the future plant.
Other assets
Over the last few years, there have been no significant changes in the structure of the main assets in the group of Polish
companies. In terms of assuring the operations of the core business of KGHM Polska Miedź S.A. the Polish companies
operating mainly on its behalf are significant, including among others:
− PeBeKa S.A. - mining work contractor,
− KGHM ZANAM S.A. – a supplier and service provider for mining machinery, also providing production maintenance
services in selected areas and participating in advancement of investment tasks;
− KGHM Metraco S.A. - a supplier of copper scrap,
− “Energetyka” sp. z o.o. – the company securing part of the energy needs of KGHM Polska Miedź S.A.,
− POL-MIEDŹ TRANS sp. z o.o. - a company providing rail freight services.
In terms of other entities - non-core companies - a significant portion of assets are investments in the area of broadly defined
healthcare, including Polska Grupa Uzdrowisk sp z o.o. and companies realising the corporate social responsibility policy,
such as “Miedziowe Centrum Zdrowia” S.A.
Moreover, amongst the international companies the following group of companies operates under the DMC Mining Services
brand: DMC Mining Services Ltd. Companies operates, FNX Mining Company Inc., DMC Mining Services Mexico, S.A. de C.V.,
DMC Mining Services Corporation, DMC Mining Services Colombia S.A.S., DMC Mining Services (UK) Ltd. and DMC Mining
Services Chile SpA, which provide services in shaft sinking, preparatory work, construction of above-ground and
underground mine facilities, mine drilling, underground excavation and development of mine infrastructure, tunnel drilling
for general construction purposes and engineering services.
13
On 22 February 2022 the transaction of sale of 45% of the shares in Sierra Gorda S.C.M. by Sumitomo Metal Mining Co., Ltd. and Sumitomo
Corporation to South32, an Australian mining group with its registered head office in Perth, was completed. The transaction was conducted
on the basis of sales agreements entered into on 14 October 2021.
KGHM Polska Miedź S.A. 22
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
1.3.3 Description of the production process
Production process of KGHM Polska Miedź S.A.
Production in KGHM Polska Miedź S.A. is a fully integrated production process, in which the end product of one
technological phase is the starting material (half-finished product) used in the next phase. The mining part of KGHM Polska
Miedź S.A. comprises three mining divisions: Lubin mine, Rudna mine and Polkowice-Sieroszowice mine. In the next phase,
the Ore Enrichment Plant Division prepares concentrate for smelters and the Hydrotechnical Plant Division is responsible
for storing and managing the waste generated in the copper ore enrichment process. There are two smelting divisions
within KGHM’s organisational structure: Legnica Copper Smelter and Refinery and Głogów Copper Smelter and Refinery as
well as Cedynia Wire Rod Plant.
Mining
The technology of mining the copper ore in all three mines is based on the room-and-pillar system with the use of blasting
technology for ore extraction. It includes access and preparatory works, comprised of the excavation of a drift network on
all sides of the site to be mined, cutting of the unmined rock mass with rooms and drifts separating a number of
technological pillars, as well as extraction of the ore followed by the transport of the ore to underground dumping stations,
where the large rocks (oversized) are crushed and sifted through a grate, and then the crushed muck is transported to the
storage areas near the shafts, from which it is transported to the surface by skip hoisting shafts.
Copper ore mining operations are fully mechanized, carried out in a 4-shift system, with the use of motorised mining rigs,
most of which are equipped with air-conditioned cabins and operator support systems. Mining work is conducted in the
following cycle: drilling the blasting holes with the support of motorised drilling rigs, loading blasting material into drilled
holes by motorised blasting rigs, group blasting in mining areas, followed by a time of waiting (without the presence of
mining crews) for the possible occurrence of seismic tremors caused by the blasting works and the ventilation of the areas
blasted. The next stage involves the loading of the muck using motorised loaders into haulage vehicles and its transport to
dumping stations. The shielded face is protected by roof anchor bolts using bolting rigs. The crushed ore is transported by
conveyors belts or mine rail trolleys to the storage sites near the shafts and then transported to the surface. After the ore
is unloaded at the shaft top, it is transported by conveyors belts or railway to the Ore Enrichment Plant Division Areas
located at each of the three mines.
The operations and processes applied in all three concentrators are the same. However, due to the variation in the
lithological and mineralogical composition of the ores from the different mines, the technological diagrams of each plant
differ. The processing technologies used include the following unit operations: screening and crushing, grinding and
grading, flotation and concentrate dewatering.
The flotation process results in concentrate with an average copper content of approx. 22-23%, and flotation waste.
Concentrate with the highest copper content of 25.9% is produced in the Rudna Concentrator, while the concentrate with
the lowest copper content of 13.7% is produced in the Lubin Concentrator. The Polkowice Concentrator produces
concentrate of 24.8% copper content.
The dried concentrate of approx. 8.7% moisture content is transported by rail to the following smelters/refineries:
the Legnica Copper Smelter and Refinery located in Legnica, the Głogów I Copper Smelter and Refinery and the Głogów II
Copper Smelter and Refinery, located in Głogów.
The flotation waste, in the form of slimes, is transported through pipelines to the Żelazny Most Tailings Storage Facility,
where the sedimentation of the solid particles takes place and the clarified water is collected and redirected to the
concentrators. The storage site also serves as a retention-dosage reservoir for excess mine and process water in circulation.
Excess water is hydrotechnically discharged (periodically) to the Odra River. This method was developed and implemented
in partnership with research institutions, and it has been officially approved for use under the provisions of the Water Law.
Research shows that the discharge of mine process waters into the Odra River cannot cause changes that would prevent
the proper functioning of aquatic ecosystems and would make the waters unable to meet the quality requirements
specified for them.
Metallurgy
The copper smelters/refineries produce electrolytic copper from own concentrates as well as from purchased metal-
bearing material (copper concentrates, copper scrap).
The Legnica Copper Smelter and Refinery uses a multi-stage process whose main steps include: the preparation of the
charge for smelting, its reductive melting in a shaft furnace to form matte copper, conversion to the form of blister copper
with the copper content of approx. 98.5%. The next steps include fire refining in anode furnaces to produce anodes of
99.2% copper content and electrorefining. The Legnica Copper Smelter and Refinery operates a melting process for high-
grade copper scrap and its refining in the Revolving Casting-Refining (RCR) furnace. The final product is electrolytic copper
cathodes with 99.99% copper content.
KGHM Polska Miedź S.A. 23
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
The Głogów Copper Smelter and Refinery applies one-stage flash furnace technology, based on a license of the Finnish
company Outokumpu. The concentrate dried to a moisture content of 0.3% H2O, is smelted in a flash furnace into blister
copper with approx. 98.6% copper content, which is subject to fire refining in anode furnaces. On the other hand, slurry
slag containing approx. 12%-14% copper is sent for de-coppering in an electric furnace, and the resulting CuPbFe alloy is
sent to converters, from which copper at purity level of 98.5% copper is also sent for refining in anode furnaces. The anodes
obtained in the fire refining process undergo electrorefining, the final product of which is electrolytic copper in the form of
cathodes with 99.99% copper content.
Approx. 49% of the electrolytic copper produced by KGHM Polska Miedź S.A.’s smelters and refineries are further processed
in the Cedynia Copper Wire Rod Division, where copper wire rod is produced by a continuous smelting, casting and rolling
process as well as oxygen-free copper rod and oxygen-free, low-alloy, silver-bearing copper rod using the UPCAST
technology are produced.
The anode slime produced during the electrorefining process at KGHM’s smelters and refineries contains precious metals,
and is the raw material used by the Precious Metals Plant at the Głogów Copper Smelter and Refinery to produce the
following products: refined silver, gold, platinum-palladium concentrate and selenium. The electrolyte in the Tank Hall, once
the copper is removed, is used to produce crude nickel sulphate.
The lead-bearing dust and slimes collected as a result of the removal of dust from technological exhaust gases at the
smelters and refineries are smelted, together with decopperised convertor slag from the flash furnace production line, in
Dörschel furnaces at the Lead Section of the Głogów Copper Smelter and Refinery into crude lead containing 99.3% lead.
Crude lead undergoes a refining process at Legnica Copper Smelter and Refinery, which results in a final product in the
form of refined lead with 99.85% lead content.
Diagram 7. Integrated geological, mining and metallurgical activities in KGHM Polska Miedź S.A.
KGHM Polska Miedź S.A. 24
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Production process of KGHM INTERNATIONAL LTD.
The core business of the companies of KGHM INTERNATIONAL LTD. Group is the mined production of metals, such as
copper, nickel, gold, platinum and palladium, from both open-pit and underground mines, as well as advancement of
mining and exploration projects. The following drawing shows a simplified flowchart of the core business of the KGHM
INTERNATIONAL LTD. Group.
Diagram 8. Simplified flowchart of the core business of the KGHM INTERNATIONAL LTD. Group
The detailed description of the production process in KGHM Polska Miedź S.A. and in international assets can be found on
the corporate website under the tab Production processes.
1.3.4 Basic products and description of the industry
Copper cathodes
Copper wire rod
Silver
Copper concentrate
Molybdenum oxides
Molybdenum
concentrate
Gold
Ore containing copper,
nickel and TPM
Oxygen-free copper rod
ETP/OFE nuggets
A detailed description of the product groups offered, markets and customers serviced can be found in section 4.1.1 [SBM-
1 Strategy, business model and value chain.
The primary products of the KGHM Group, i.e. copper concentrates, cathodes, copper wire rod and silver in the form of
bars and grains, are traded on the highly-competitive global market as well as in reference to the commodity markets.
Markets for the individual products offered by KGHM have varied rules and customs concerning trading and standard
prices. Their incomparability is also due to the characteristics of products, which impacts their usage and the diversity of
market participants.
KGHM Polska Miedź S.A. 25
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Copper
The primary products offered by the companies of the KGHM Group are concentrates, cathodes and copper wire rod.
They are the result of various stages of processing copper ore and recycling of copper scrap. For all of these products, the
price benchmark (i.e. the global benchmark of copper prices for physical sales contracts of copper-bearing materials and
products) is stock market quotations, with the cash settlement of the London Metal Exchange (LME) being most commonly
used. Less commonly used are alternative quotations of copper on the stock exchanges in New York (COMEX) and the
Shanghai (Shanghai Futures Exchange -SHFE). Grade “A” type refined copper cathodes, with a copper content of at least
99.99%, are quoted on the LME (under the standard BS:EN 1978:1998 - Cu-CATH-1). In order to be able to apply stock
exchange prices to purchase/sale transactions of the products to which this quality standard is not applied (i.e. all types of
copper-bearing materials such as copper concentrates, copper scrap or more processed products like copper wire rod),
market participants have developed a premium and discount system, which adjusts stock quotations. This allows the setting
of a market price for a product which takes into account its processing stage, its physical state and chemical makeup, as
well as costs of transport and insurance to an agreed delivery destination and the current availability of the metal in a given
location.
Copper concentrate
Copper concentrate is a product made by processing/enriching copper ore, which usually has a relatively low metal content
and is not suitable for direct metallurgical processing. The copper content in concentrate, depending on the copper ore
from which the concentrate is produced, varies from a dozen or so to approx. 50-55%, which enables further processing in
copper smelters and refineries. The cost of transporting products with a lower copper content (for example copper ore)
basically eliminates them from trade in the global market (with certain exceptions), therefore it may be assumed that copper
concentrate is the first product of processing copper ore that may be generally traded. As a result of metallurgical processes
copper is produced as well as the by-products of processing (mainly precious metals, sulphuric acid, lead etc.). The main
participants of the concentrate markets are mines supplying the product on the market and smelters and refineries, for
which the concentrates are materials for production. Trading companies also play a role in the international trading,
intermediating in the purchase/sale transactions and offering additional services expected by the parties. In 2024, the total
global production of copper in copper concentrate is estimated at 18.4 million tonnes (according to CRU).
Chart 1. Geographical breakdown of global copper concentrates production in 2024
(source: CRU, KGHM Polska Miedź S.A.)
The KGHM Group belongs to the world’s top 10 largest producers of mined copper. For years, this group has invariably
been dominated by huge and often highly diversified groups in terms of product and geographical location, such as BHP,
Freeport McMoRan and the Chilean tycoon Codelco. Over the recent years, the expansion of Chinese entities has been
noticeable, dominating the production of refined copper but have also gained a significant share in the mined production
of copper.
Asia 26%
South and Central
America 40%
Other Europe 9%
Poland 2%
North America 9%
Africa 9%
Oceania 5%
KGHM Polska Miedź S.A. 26
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 2. Structure of copper mined production by global producers in 2024
(Source: Wood Mackenzie)
Copper concentrates require processing into refined copper, which involves incurring processing costs and incomplete
metal recovery at individual stages of production. Therefore, the transaction price should include a number of discounts
from the quotations set by the commodity exchange for refined copper. The benchmark of discounts on the market (for
smelter treatment and refining charges TC/RC) is determined during negotiations by the main producers of concentrates
and their customers (mainly Chinese and Japanese smelters and refineries). However, some copper producers have
withdrawn from the benchmark system and rely on formulas relating to the current spot market.
KGHM Group companies participate in the copper concentrate market mainly through the sale of the concentrate from
Sierra Gorda in Chile and from the Robinson in the USA. At the same time, the Company purchases copper concentrates
from the market with characteristics suitable for more efficient utilisation of the production capabilities of the smelters and
refineries in Poland.
Copper cathodes
Primary commodities exchanges (including the LME and SHFE) enable cathodes to be registered (Grade A type, with a
copper content of at least 99.99% under the BS:EN 1978:1998 – Cu-CATH-1 standard), and therefore their trading on
exchanges and through LME-approved warehouses. The copper cathodes produced by KGHM are registered on the LME,
SHFE and INE (Shanghai International Energy Exchange) under the brands HML, HMG-B and HMG-S. Unregistered cathodes
are also traded on the physical market (for example those that do not meet quality parameters or the minimal yearly
production conditions required by exchanges). One example of unregistered cathodes produced by KGHM is the Carlota
brand. The main participants in the cathodes market are mining and smelting companies producing copper in the form of
cathodes and wire rod plants and other companies engaged in copper processing, which use cathodes to produce wire rod,
other rods, flat bars, pipes, sheets and tapes. Similarly as in the case of copper concentrates, trading companies and
financial institutions intermediating in the cathodes trade also participate in the market. In 2024, CRU estimated total global
production of refined copper at 26.6 million tonnes.
In terms of refined copper, the KGHM Group ranks among 15 largest electrolytic copper producers worldwide. Chinese
entities play a major role in this group (three Chinese companies are in the top five, rounded off by Codelco and Aurubis)
Chart 3. Structure of refined copper production by global producers in 2024
(Source: Wood Mackenzie)
It is a standard practice on the Grade “A” copper cathodes market to add a producer’s premium to the prices set by global
exchanges. Its level allows the producer to cover the cost of transport and insurance to the agreed delivery destination,
and it also includes the premium for quality (of a given cathodes brand) and supply-demand situation on a given market.
The companies of the KGHM Group participate on the cathodes market mainly by selling cathodes from the Group’s Polish
assets. The Głogów Copper Smelter and Refinery produces cathodes of the HMG-S and HMG-B brands, while the Legnica
Copper Smelter and Refinery produces cathodes of the HML brand, registered on the exchanges in London (LME) and in
BHP 6%
Codelco 6% Freeport-McMoRan 6%
Southern Copper 4%
Glencore 4%
Zijin Mining Group 4%
Rio Tinto 3%
Anglo American 2%
China Molybdenum 2%
KGHM 2%
Others 61%
Jiangxi Copper Corp. 5%
Tongling 5%
Codelco 4%
Aurubis 4%
Jinchuan 4%
Freeport-McMoRan 4%
Glencore 3%
Zijin Mining Group 3%
ENEOS Holdings 3%
Southern Copper 2%
Mitsubishi Materials 2%
Sumitomo Metal Mining 2%
KGHM 2%
Daye Nonferrous Metals 2%
China Molybdenum 2%
Others 53%
KGHM Polska Miedź S.A. 27
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Translation from the original Polish version
Shanghai (SHFE and INE). Moreover, the KGHM Group offers cathodes produced through the leaching and electrowinning
(SX/EW) process in the Carlota mine in the United States. Production of refined copper by companies of the KGHM Group
amounted to 599.3 thousand tonnes in 2024, which represents 2.2% of global production.
Chart 4. Geographical breakdown of refined copper production in 2024
(source: CRU, KGHM Polska Miedź S.A.)
Chart 5. Geographical breakdown of global refined copper consumption in 2024
(source: CRU, KGHM Polska Miedź S.A.)
Copper wire rod
Copper wire rod is manufactured in the continuous process of melting, casting and drawing in plants processing refined
copper. The material used in this production cycle is mainly copper in the form of cathodes, although higher-grade copper
scrap may also be used. Wire rod is a half-finished product used in the production of single wires and strands used to
produce conducting cores in cables and electric wires (for example: enamelled cable, car cables, power cords etc.) Similarly
as for copper cathodes, trading companies are also involved in trading of half-finished products, apart from companies
with production facilities (wire rod plants and companies processing wire rod into cables and bundled wires). The wire rod
market, due to the quality characteristics of the product, is more of a local market, which also means that it is highly
competitive and demanding. In 2024, total global production of copper in the form of wire rod is estimated by CRU at
21 million tonnes.
Chart 6. Geographical breakdown of global copper wire rod production in 2024
(source: CRU, KGHM Polska Miedź S.A.)
Asia 61%
South and Central America 9%
Europe 13%
North America 6%
Africa 10%
Other 1%
Asia 78%
South and Central America 1%
Europe 12%
North America 8%
Other 1%
Asia 75%
Europe 13%
North America 10%
South and Central America 2%
KGHM Polska Miedź S.A. 28
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 7. Geographical breakdown of global wire rod consumption in 2024
(source: CRU, KGHM Polska Miedź S.A.)
The wire rod price structure, apart from the copper quotations on the London Metal Exchange, also includes a producer’s
premium (added to the price of cathodes) and the refining charges due to the costs of processing of cathodes into wire rod.
KGHM Polska Miedź S.A. offers wire rod which is produced in the Cedynia Wire Rod Plant in Orsk.
Copper wire rod and wires are utilised in numerous sectors of the modern economy, while the products created from them
(cables and bundled wires) account for approximately 60% of world copper consumption (source: CRU). The vast majority
of wire rod and wire (estimated at more than 10 million tonnes per year; source: CRU) is used in the construction and
infrastructure sectors. Distribution of electricity, building wiring and transmission as well as distribution networks are the
most dominant subsectors. Amongst the most popular products manufactured from wire rod and wires are power lines,
cables in the electrical installations in buildings and winding wires (together approximately 70%; source: CRU). In 2024,
production of wire rod and wire by KGHM Polska Miedź S.A. reached 287.2 thousand tonnes.
Silver
Approximately 72% of global metallic silver production is a by-product of mining ores of other metals (source: Metal Focus
- Silver Five-Year Forecasting Quarterly). Silver, due to its unique physical characteristics, is used in the jewellery, electronics
and electrotechnical industries, as well as in medicine, optics, the energy industry and many others. It is also applied in the
latest technological solutions, among others in infrastructure, the automotive industry and photovoltaics. In total, industry
utilises approximately 58% of global silver production (source: Metal Focus - Silver Five-Year Forecasting Quarterly). It is also
a valued investment precious metal. According to Metals Focus preliminary estimates, in 2024 global production of mined
silver amounted to approx. 26 thousand tonnes.
Chart 8. Chart 13. Geographical breakdown of global mined silver production in 2024
(source: Metal Focus – preliminary data, KGHM Polska Miedź S.A.)
The participants in the silver market typically rely on quotes from the London Bullion Market Association, which, when
adjusted for current market conditions, represent the price of silver in physical transactions.
KGHM sells silver in the form of bars and grains (production takes place at the Głogów Copper Smelter and Refinery) and
is one of the largest producers of metallic silver worldwide. In 2024, KGHM Polska Miedź S.A.’s silver production reached
1 316 tonnes, which places the Company among the world’s top silver producers. This metal in the form of bars is registered
under the brand KGHM HG and has a registered certificate on the COMEX (New York Mercantile Exchange) as well as Good
Delivery certificates issued by the London Bullion Market Association. Silver is supplied in the form of grains to the jewellery
and metals industries, which produce alloys containing silver. A significant part of silver in the form of bars (ingots) is
purchased by financial institutions.
Asia 74%
Europe 13%
North America 10%
South and Central America 1%
Other 2%
Mexico 25%
China 13%
Peru 13%
Chile 7%
Poland 5%
Bolivia 5%
Russia 5%
USA 4%
Australia 4%
Other 19%
KGHM Polska Miedź S.A. 29
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1.3.5 Competitive advantages
The KGHM Group is distinguished for its strong position in the global metals market, being one of the largest producers of
copper, silver and other precious and rare metals. Its competitive advantages include its extensive own raw material base,
comprising both Polish and foreign deposits, which provides geographical diversification and operational stability.
Due to its vertical integration and extensive infrastructure, the KGHM Group can efficiently manage the entire value chain:
from mining to processing and the sale of its products and services. Moreover, a strong focus on innovation, sustainability
and advanced production technologies allows the company to optimise costs and adapt to market expectations, including
meeting the growing environmental and stakeholder demands.
Diagram 9. Competitive advantages of the KGHM Polska Miedź S.A. Group
Diversified portfolio of assets, global scope of operations and access to rich deposits
KGHM Polska Miedź S.A. is a global mining and processing entity carrying out mining projects on three continents.
For over a decade, KGHM Polska Miedź S.A. has owned mining assets not only in Poland but also in Canada, the USA and
Chile, being part of the elite group of companies which can claim to have a full value chain, including exploration, mining,
smelting/refining and processing as well as sales.
The copper ore deposits controlled by KGHM guarantee an important position in the global mining sector. The heart of
KGHM is the Europe’s largest, and one of the world’s largest, copper ore deposits, located in south-western Poland, which
is also rich in associated metals, mainly silver.
At the same time, the Company continues its exploration and evaluation work in many locations in Poland and worldwide.
A broad range of exploration work is conducted, i.e. greenfield exploration and geological appraisal (exploring new
deposits), brownfield exploration areas (exploration of deposits which have been partially documented) as well as in-mine
and near-mine exploration works (exploration of areas adjacent to the currently worked assets in order to extend their
mine life).
Integrated production process
A unique competitive advantage is the fact that the KGHM Group has a full, integrated process - from deposit exploration,
mining, ore enrichment, smelting, refining, processing to the sale of finished products. Fully integrated subsidiaries,
providing complementary services and extending the core business in areas such as mining machinery production,
explosives or metal recycling, also add value. KGHM Polska Miedź S.A. is dynamically developing elements related to the
implementation of the circular economy concept as part of its activities, developing recycling and striving to make even
better use of post-production waste as so-called secondary raw material sources in the production process.
KGHM Polska Miedź S.A. 30
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Unique know-how and rich experience
In its over 60-years’ history, KGHM Polska Miedź S.A. developed interdisciplinary human capital, experience, knowledge and
skills that will remain one of the fundamental assets for creating a competitive edge in the industry and for building a strong
international position of Poland as an industrial centre. KGHM is uniquely qualified to carry out work at great depths,
extracting copper ores and other precious metals in underground mines ("Lubin", "Rudna" and "Polkowice-Sieroszowice").
The deepest mining area in Poland (owned by KGHM) – the GG-1 shaft in Kwielice – is at a depth of 1 348 meters.
Consequently, it is the deepest underground project in the non-ferrous metals industry in Europe.
The extraction of copper ore, its processing and production of a finished product that is fit for sale is a difficult and complex
process. Therefore, the Company’s unique, long-standing experience and know-how in this field is desired by experts
worldwide and attracts scientific and business interest.
Partnership with companies and institutions
KGHM builds permanent partnerships with renowned Polish and international companies and institutions. The Company
is a member of numerous Polish and international organisations, including employer organisations, economic associations,
sector societies, foundations and other entities representing the European mining industry. It engages in ongoing dialogue
with, among others, technological experts, universities, suppliers, governments, social groups, industry leaders and citizen
social organisations at all stages of the lifecycles of its projects.
Financial stability
One of the pillars of growth of the KGHM Group is to ensure its financial stability and implement systemic solutions aimed
at increasing its value. As part of enhancing its competitive advantage in this respect, KGHM strives to base its financing
structure on long-term instruments, shorten the cash conversion cycle and manage the KGHM Group’s market and credit
risk effectively. These actions improve the liquidity of the Company and the KGHM Group and affect the availability of funds
for the growth, realisation of strategic tasks and increase profits by reducing costs of financing. This allows a number of
significant long-term investment projects to be planned and advanced.
A responsible employer appreciating commitment and cultural diversity
The KGHM Polska Miedź Group employs around 34 thousand people. The employees are the foundation due to which the
Group may continuously build its business potential. KGHM Polska Miedź S.A. is a stable and responsible employer, focused
on the health and safety of employees, their professional development and continuous improvement of working conditions.
Therefore, the Company undertakes extensive efforts to create safe and engaging workplaces.
Due to the rich experience, commitment, continuous improvement of competence and synergy resulting from the cultural
diversity of the employees, the KGHM Group has built a unique culture of cooperation and reached a high position on the
international arena.
Extension of the value chain
KGHM Polska Miedź S.A. is consistently extending the value chain, both upstream and downstream, to increase its
competitiveness and efficiency. In the upstream area, it invests in the development of its own raw material deposits, such
as exploration projects in Poland, Sierra Gorda in Chile or the acquisition of copper-bearing scrap to ensure a stable supply
of raw materials. Downstream, KGHM is developing its processing operations, producing high-quality copper, silver, gold
and other metals with a high additional value that are provided to demanding industries such as electronics, power industry
and automotive sector. This approach allows the full potential of the raw materials to be used and the profitability of the
business to be increased.
Integrity and sustainable development within the KGHM Group
The integrity of the KGHM Group means the coherence and synergy of activities in different areas of operation, such as
mining, processing, environmental management and social relations.
The Group consists of entities with unique and significant expertise, both in the field of broadly-defined operational
assurance of the core production line – directly related to the core production line – as well as ensuring future development
prospects, continuity of electricity supply or dealing with technology development. In addition, KGHM Polska Miedź S.A. has
a number of subsidiaries engaged in complementary activities, including comprehensive research and development
services, advanced data analysis work, as well as laboratory testing and analysis services.
KGHM Polska Miedź S.A. 31
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Due to vertical integration, the company controls the entire value chain from the acquisition of raw materials to the
production of finished products and their sale, ensuring higher efficiency, stability of supplies and high product quality.
Integrity also includes the commitment to climate and environmental action and adherence to ethics, transparency and
social responsibility, building trust with customers, investors and partners. The comprehensive approach allows KGHM to
distinguish from its competitors as a stable, innovative and sustainable growth-oriented organisation, as evidenced by the
numerous awards and distinctions received by the Company, among others, for its activities related to its presence on the
capital market, communication with investors and CSR initiatives.
Innovation
KGHM heavily invests in innovation and research to increase the efficiency and safety of its operations, its competitiveness
and the impact of its operations on sustainable development. The Company is developing modern technologies in the area
of mining and processing, such as process automation, digitisation of mines and the use of artificial intelligence to optimise
production. Examples include the testing of battery-powered mining machines, the robotisation of production and auxiliary
processes, and broadband data transmission in underground mining areas. KGHM also carries out research projects related
to the recovery of rare metals and the mitigation of environmental impact which is in line with the trends of the circular
economy.
While cooperating with scientific centres and research institutions, as well as appreciating the creative potential and
ingenuity of its own staff, the Company strengthens its position as a leader in the technology and raw material industries.
Innovation and advanced technology enable KGHM to operate in accordance with the highest technical standards of
occupational safety.
A rich portfolio of products and mined minerals
The KGHM's portfolio of products primarily comprises electrolytic copper, metallic silver, molybdenum, gold and other
platinum-group metals or rare metals such as rhenium and lead. These products are used in a wide range of industries,
including: electronics, energy, automotive and jewellery. The Company is the only European producer of rhenium from its
own resources - a valuable and very rare metal used mainly in the aviation and petrochemical industries. Other products
are also derived from the processing of copper ore, including crude and refined lead, sulphuric acid, nickel sulphate and
selenium.
KGHM also acquires rock salt as a by-product of mining of its own copper deposits in Poland. The extraction of rock salt is
possible through integration of mining operations, which allows for the efficient mining of all the raw materials in the
deposits.
KGHM is committed to the quality of its products, as confirmed by numerous certificates such as the LME London Metal
Exchange certificate for copper and silver and ISO 9001 certificates, which recognise high quality management standards.
The Company’s metallurgical Divisions (Głogów Copper Smelter and Refinery, Legnica Copper Smelter and Refinery and
Cedynia Wire Rod Plant) also hold the prestigious Copper Mark certificate, confirming responsible practices in copper
production in line with global sustainability principles, thereby contributing to building trust among partners and
customers.
KGHM Polska Miedź S.A. 32
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1.4 STRATEGY, PLANS AND OBJECTIVES
1.4.1 Mission, Vision and Strategy and the development plans of the Group
In the current reporting period, the Company continued the implementation of the “Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an outlook to 2040”, adopted on 14 January 2022 by the Supervisory Board of the Company,
based on the development directions: Elasticity/flexibility, Efficiency, Ecology, E-industry and Energy. A special place in the
Strategy is occupied by the green transformation based on renewable energy and modern technologies. The mission and
vision remained unchanged, in the following wording - mission: To always have the copper, and vision: To use our resources
efficiently to become the leader in sustainable development. The implementation of the Strategy is supported by KGHM's
values: zero harm, teamwork, results driven, accountability and courage.
Diagram 10. Mission, Vision and Development Directions of the Strategy of KGHM Polska Miedź S.A.
The Strategy of the KGHM Polska Miedź S.A. Group is comprised of five pillars (1. Core business, 2. New activities, 3.
Supporting activities, 4. Health and 5. Prosociality), based on five development directions.
Diagram 11. Five Pillars based on five development directions in the Strategy of the KGHM Polska Miedź S.A. Group
The Group’s Strategy also identifies climate objectives related to the reduction of emissions by KGHM, which are consistent
with the “Climate Policy of KGHM Polska Miedź S.A.”, a document complementary to the Strategy and its climate targets set
for 2030 and 2050.
At the same time, in 2024, the Management Board of the Company carried out work to review and update the Strategy,
adapting it to changing industry conditions, current challenges and the Group's operational situation.
KGHM Polska Miedź S.A. 33
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1.4.2 Advancement of the Strategy - key achievements in individual strategic development directions
The key achievements in advancing the strategic activities in individual strategic directions of development in 2024 are
presented below:
Table 8. Key achievements in individual strategic development directions
Efficiency
− The Deposit Access Programme was continued - 43.1 km of tunnelling were excavated in the Rudna and
Polkowice-Sieroszowice mines. All of the work carried out under the Mine Projects Group enables the successive
opening of new mining areas.
− The development of the Żelazny Most Tailings Storage Facility was continued, in particular of the Southern
Quarter and the Tailings Segregation and Compacting Station.
− R&D activities were carried out, aimed at seeking innovative solutions mainly for the Core Production Business
of the Company.
− The KGHM Invention Exchange was held (12-29 November 2024).
− Work was carried out in the scope of measures reducing the level of water hazards – the project to construct
the anti-filtration barrier was continued in order to limit the inflow of mine water to mining areas of the
Polkowice-Sieroszowice mine and to increase the capacity to pump-out the mine water.
− Use of external sources to finance R&D projects continued. In 2024, the Company received, among others, a
grant in the amount of PLN 1.5 million under the EU programmes EIT KIC Raw Materials and Horizon Europe
for the implementation of 6 R&D projects, and a grant of PLN 14 million under the programme “Aid for energy-
intensive sectors related to sudden increases in natural gas and electricity prices” from the National Fund for
Environmental Protection and Water Management.
Elasticity/Flexibility
− Modernisation work was carried out at the Legnica Copper Smelter and Refinery in the scope of electro-refining
process.
− The maintenance shutdown at Głogów Copper Smelter and Refinery has been completed. The renovation and
investment work comprised key core business equipment and a number of investment tasks that will increase
the efficiency of the plant.
− Activities to extend the Company's value chain continued, including those related to the commissioning of
design work for the construction of the Upcast II production line together with the Conform installation in
Cedynia Wire Rod Plant, among others, to make the Company's product lineup more flexible.
− Exploration projects continued in Poland for copper deposit exploration and evaluation (Retków-Ścinawa,
Głogów, Synklina Grodziecka, Radwanice, Kulów-Luboszyce) and other (Non-Copper) concessions for
exploration and evaluation (Nowe Miasteczko hydrocarbon deposit and Mieroszyno potassium-magnesium salt
deposit in the vicinity of Puck).
− Development projects in international assets continued, including the sinking of the exploration shaft as part
of the Advanced Exploration phase of the Victoria project in Canada, which aims to specify the grade of the
mineral resources. Sierra Gorda's mine operations continued to operate solely on the basis of electricity from
RES.
− In February 2024, an unsecured, revolving credit agreement with Bank Gospodarstwa Krajowego in the amount
of USD 450 million for a financing period of up to 60 months, with an option to extend it by a subsequent 24
months was concluded.
− On 26 June 2024, the Company issued C series bonds on the Catalyst market, a segment of debt instruments
trading on the Warsaw Stock Exchange, with the total nominal value of PLN 1 billion and the bond redemption
date of 26 June 2031.
− In September 2024, Sierra Gorda SCM Joint Venture concluded revolving credit facility agreement with a
syndicate of banks in the amount of USD 500 million for the period of 36-month, with an option to extend it by
a subsequent 24 months. The purpose of the financing secured by corporate guarantees of KGHM Polska Miedź
S.A. and South32, was refinancing debt and other general corporate purposes.
Ecology, Safety and
Sustainable
Development
− A balance of Scope 1, 2 and 3 greenhouse gas emissions for 2023 for the KGHM Group was performed.
− Annual reports on CO
2
emission for 2023 have been prepared to meet the needs of the system for the trading
of greenhouse gas emissions allowances. Applications were submitted for the allocation of emission allowances
under the system for the trading of greenhouse gas emissions allowances.
− Work on the Transformation Plan for KGHM Polska Miedź S.A. for climate change mitigation continued.
− Actions were continued related to managing water and reducing the salt content of water discharged to the
Odra river, aimed at increasing care for the environment.
− Work has started on the BREF reference document for metal mining (MIN BREF) as part of the Seville process,
in accordance with the Industrial Emissions Directive.
− The preparation of EPD environmental declarations in accordance with EN 15804+A2 for wire rod and wire has
begun.
− The analysis has been launched with a view to developing a feasibility study for the capture and storage of
carbon dioxide (CO
2
).
− Głogów Copper Smelter and Refinery and Legnica Copper Smelter and Refinery have once again been awarded
the Copper Mark certificate confirming that copper production is efficient and compliant with the highest
standards.
− The audit and external supervision resulted in gaining a positive recommendation on maintaining a certified
Integrated Management System including, among others, ISO 14001 (Environmental Management System).
− Implementation of the Occupational Health and Safety Improvement Programme continued. The Company was
recognised for its efforts to promote occupational health and safety by, among others, Safe Work Leaders
Forum of the Central Institute for Labour Protection in Warsaw.
KGHM Polska Miedź S.A. 34
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E-industry
− Projects aimed at automation of production lines of the Company's Mining Divisions continued, including the
implementation of initiatives related to testing of battery-powered electric mining machines, as well as the
testing of the electric rock crusher and the preparation of a prototype of bolting rig with an automated bolting
turret to begin functional testing.
− The system for locating and identifying machinery and people in the underground mines was integrated and
extended.
− Tests of the new flotation technology - Reflux Flotation Cell in the Concentrator Divisions continued, which is
expected to enable improved process hydrodynamics and production parameters in the scope of recovery and
concentrate quality.
− Functional testing of a specialised robot capable of high-temperature operation in the Głogów II Copper Smelter
and Refinery continued and internal consultations related to the possibility of building similar robots in the
Głogów I Copper Smelter and Refinery have commenced.
− Activities in the scope of digital transformation and ICT security continued, a dedicated cyber security team
was established.
Energy
Projects were developed to increase electricity generation from own sources, including renewable energy sources
such as photovoltaic (PV) farms and wind farms (WF):
RES projects on own land:
− Implementation stage: for the Głogów Copper Smelter and Refinery I-III Photovoltaic Power Plant (7.5 MW),
the public procurement process is in progress for the selection of the General Contractor and the Oversight
Inspector for each of the designed PV installations.
− Preparatory stage: for the PV projects “Piaskownia Obora” (max. of 50 MW), PV “Wartowice I” (88 MW) and PV
“Kalinówka” (2 MW), grid connection consent was obtained with the originally assumed capacities. Positive
environmental decisions have been obtained for the PV “Tarnówek”, PV “Kalinówka” and PV “Polkowice” projects
(approx. 10 MW in total). For the PV “Kalinówka” project, the process of obtaining a building permit decision has
started. The decision on construction conditions has been obtained for the PV “HM Cedynia” project (1.5 MW).
With regard to the PV “Kopalnia Lubin Zachodni” project (5 MW), the Rural Municipality of Lubin proceeded to
develop an amendment to the local spatial development plan for the Szklary Górne cadastral area. For the PV
“Wartowice I” project, preparations are in progress for a spatial and programme concept. The “Radwanice-
Żukowice” WF project (20 MW) located partly on the Company's own land near the Głogów Copper Smelter and
Refinery is under consideration. A concept for power output to the Głogów Copper Smelter and Refinery was
prepared for the wind project.
− Work continued on making use of the potential of own land for RES projects.
Acquisition RES projects:
− On 29 February 2024, shares in three special purpose companies with photovoltaic farm projects with the total
capacity of 42 MW were acquired, consequently, taking into account previous project purchases, the Company
owns 8 photovoltaic farms with the total capacity of 47 MW located in the Lower Silesia, Łódz, Pomerania and
Greater Poland Voivodeships.
− Monitoring of the commercialisation progress of small modular nuclear reactor (SMR) technology continued, a
pre-feasibility study on the construction of a nuclear power plant using SMR technology for the Company was
completed and analysis of conclusions is in progress.
Table 9. Status of progress on realisation of strategic success ratios - level in 2024
Strategic success
ratio (Strategic KPI)
Base ratio value in
2020
2030 targets
Value of the ratio in
2024
Domestic
production of
electrolytic copper
~560 kt
~600 kt (including based on increased processing of purchased
copper-bearing materials and recycled copper).
588.7 kt
Electrolytic copper production in domestic assets represents 98% of the production target adopted in the Strategy
(600 kt in 2030) and a 3% above the 2024 budget target.
International
production of
payable copper
~150 kt
Higher production by the international assets of KGHM by
extending the life-of-mine (LOM) of active mines, developing
assets in the mine projects portfolio held and increasing the
resource base thanks to advancement of the International
Exploration Strategy.
141 kt
Payable copper production in international assets amounted to: Sierra Gorda 80.5 kt (55%); Robinson 55.9 kt;
Carlota 2.6 kt; Sudbury Basin 2.0 kt. Copper production (segments: KGHM INTERNATIONAL LTD. and Sierra Gorda
S.C.M. - 55% share) was 19% higher than in 2023, as a result of improved production parameters at the Robinson
Mine, which continued mining in areas of low copper content throughout most of 2023.
KGHM Polska Miedź S.A. 35
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Translation from the original Polish version
Silver production
14
~1 320 t
(in the top three)
Maintaining the position as one of the top three silver
producers in the world (approx. 1 200 t).
1 340.7 t
In 2024, the Group's silver production ensured the Company's top position in the list of "the largest silver mines in
the world" (World Silver Survey 2024 ranking) and second place in the global ranking of "the largest silver
producers".
Energy produced
22% of consumption
Minimum 50% of consumption (approx. 1.5 TWh)
656.9 GWh
(21.04% of
consumption)
In 2024, an increase in the volume of energy generated from own generation sources was recorded compared to
2023 (2023 - 578 GWh / 2024 - 656.9 GWh). In 2024, there was an increase in the share of electricity produced in
own generation assets relative to the volume of electricity consumed by the KGHM Group’s core production line
(2023 - 18.36% / 2024 - 21.04%).
Reduction in
estimated CO
2
emission from
electricity
consumption
15
~1.6 million tonnes of
eCO
2
1.0 million tonnes of eCO
2
~1.42 million
tonnes of eCO
2
In 2024, greenhouse house emissions resulting from electricity consumption amounted to approx. 1.42 million
tonnes of eCO
2
, a decrease of approx. 0.34 million t eCO
2
compared to 2023. The reduction in emission compared
to the previous year resulted from the reduction in electricity consumption and a lower emission ratio for electricity.
Achieving climate neutrality by 2050 is the overarching goal of the Climate Policy of KGHM Polska Miedź S.A.,
compliant with the objectives of the Strategy.
Diversification of
the trade offer of
metals
2%
10%
2.23%
The ratio relates to the share of sales of half-finished copper products, excluding wire rod and ETP grains in total
revenues from sales of products. In 2024, production in this assortment group amounted to 16.8 thousand tonnes
(in 2020 – 14.3 thousand tonnes).
Scrap recycling
~124 kt of copper
scrap
~350 kt of copper scrap
159 kt of copper
scrap (dry weight)
The Company is systematically increasing the amount of copper scrap processed in the copper smelters.
The highest result was achieved in 2024 compared to the base year (2020).
Revenues from
sales in external
markets of
selected
Companies of the
Group
Base 2020
Base year = 100%
The amount of
revenues from sales in
external markets in
the base year 2020.
147% to the base year for the following companies: ZANAM,
NITROERG, PeBeKa
114%
16
to the base
period for the
following
companies:
ZANAM,
NITROERG,
PeBeKa
163% to the base year for the DMC company
202%
17
to the base
period for DMC
Support activities were carried out in order to ensure the financial stability of the KGHM Group and to implement
the systemic solutions targeted at increasing the Group's value. The volume of revenues from sales in external
markets of selected companies of the Group, which is one of the key ratios for the KGHM Group’s Strategy:
− the DMC company exceeded the target for 2030,
− for three domestic companies, the ratio higher than the base ratio results from higher sales revenues
generated by the companies NITROERG S.A. and KGHM ZANAM S.A.
LTIFR
18
and TRIR
19
LTIFR 7.31
Target: 0 accidents
6.64
TRIR 0.52
Target: 0 accidents
0.30
The Company is continuously pursuing its strategic ambition to achieve the lowest possible accident rate.
14
For KGHM Polska Miedź S.A. Group
15
For KGHM Polska Miedź S.A., location-based methodology.
16
Calculated as: 2024 to 2020. Data as at 12 March 2025.
17
Calculated as: 2024 to 2020.
18
LTIFR (Lost Time Injury Frequency Rate) - the total number of accidents at work standardised to 1 million hours worked, as defined by the
Act of 30 October 2002 on social insurance due to workplace accidents and occupational illnesses (Journal of Laws of 2025, item 257 with
subsequent amendments). The ratio is calculated for the Company KGHM Polska Miedź S.A.
19
TRIR (Total Recordable Incident Rate) - the ratio of accidents at work that meet the conditions for registration as defined by the ICMM
(International Council on Mining & Metals) standard. The ratio is calculated for international assets.
KGHM Polska Miedź S.A. 36
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Level of support to
the Health Area
implemented by
the KGHM Polska
Miedź Foundation
~PLN 11.5 million
20
~PLN 7 million
PLN 8.07 million
(total for
institutions and
natural persons)
The level of support for the Health Area implemented by the KGHM Polska Miedź Foundation was higher than the
level adopted as the strategic goal for 2030.
Number of
volunteer projects
advanced
25 volunteer
campaigns
30 volunteer campaigns
137 volunteer
campaigns
(including 38
campaigns in
KGHM Group)
The “Copper Heart” employee volunteer programme, launched in KGHM in 2014, was consistently implemented.
Level of support
provided for
culture, sport and
healthcare
~PLN 38.5 million
~PLN 48 million
PLN 48.15 million
The level of support provided for culture, sport and healthcare was close to the strategic target adopted for 2030.
1.4.3 Development directions of the KGHM Polska Miedź S.A. Group
In the short-term perspective, the existing policy aimed at adapting the functioning of the Group to the business model and
the market environment as well as at cooperation between the Group’s entities will be continued. The realisation of
investments aimed at ensuring cost effectiveness and development scenarios for the individual international assets in the
Company's portfolio will be an equally important task. The Group will continue the exploratory work, the strategic objective
of which is to develop the resource base and, as a consequence, to maintain optimal production levels and maximise the
value of the Company's assets in the long term.
As part of the implementation of the climate policy and the energy transition, an increase is expected in the scope of
investment in renewable energy sources, in energy efficiency improvement projects and in projects aimed at protecting the
environment and adapting to increasing regulatory requirements in this regard.
The aforementioned objectives will be realised by continuing commenced or bringing into operation new investments,
including key investments, such as:
− outfitting the mines along with the construction of conveyor belts,
− replacement of mining machinery,
− construction of mine de-watering systems,
− construction of air cooling systems,
− development of the Żelazny Most Tailings Storage Facility above a the dam’s crown height of 195 m a.s.l.
− construction of the Tailings Segregation and Compacting Station at the Żelazny Most Tailings Storage Facility,
− Hybrid Legnica Smelter and Refinery,
− modernisation of electrorefining at the Legnica Copper Smelter and Refinery by converting to permanent starter sheet
technology,
− intensification of oxygen-free copper production at the Cedynia Wire Rod Plant by building new production lines,
− the Deposit Access Program (Deep Głogów along with access and development tunnels),
− searching for and exploring deposits in areas under exploration concessions,
− construction of installations and acquisitions in terms of photovoltaic energy.
Moreover, work will continue on new intelligent technology and production management systems based on online
communication between elements of the production process and advanced data analysis.
The KGHM Group has solid foundations for further growth and strengthening of the Company's position on the global
commodity market. However, the Group's functioning is determined by its ability to adapt to changing market conditions,
use of innovative technologies and effective management of geopolitical and regulatory risks. Adapting to global trends
related to ESG and energy transition is also of key importance.
20
Due to the epidemic conditions, the area of activity of the KGHM Polska Miedź Foundation - “Health and Safety” was the particular priority
in 2020, thus the significantly higher financing in this area in the base year.
KGHM Polska Miedź S.A. 37
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Table 10. Factors fostering the development of the KGHM Group
Internal Factors:
Stable resource base
KGHM has one of the largest monogenic copper deposits, which offers the company competitive advantage
and the ability to plan its mining operations in the long term.
Geographical
diversification
The presence of the operations in Poland, Chile, Canada and the USA enables KGHM to benefit from a diverse
range of markets and reduces the risks associated with local regulatory or political constraints.
Social responsibility
and respect for ESG
issues
KGHM's initiatives related to decarbonisation of production, energy efficiency and sustainable development
strengthen its image and adapt the company to the requirements of stakeholders and global investors.
Human capital
Availability of qualified staff, including investment in employee development and the use of long-standing
and unique experience in mining, metallurgy or processing.
Applied corporate
governance principles
Effectiveness of the established corporate governance framework, particularly in terms of the efficiency of
the governance structure and decision-making processes in the organisation.
Rational investment
policy
Rational investment policy in the medium to long term ensuring adequate resources and taking into account
the specific nature of the industry and the regulatory environment.
Experience in terms of
the hedging policy
The effects of the implemented hedging policy,
Financing
The economic potential and KGHM’s brand increase financial security – the KGHM Group has access to stable
and effective sources of external financing.
External Factors
Technological progress
and investment in
innovation
and efficiency
Continuous modernisation of mining and smelting processes, including automation and digitalisation
projects allows KGHM to increase productivity, reduce operating costs and limit its environmental impact.
Increased demand for
copper and silver
The global energy transition and increasing investment in green technologies or decarbonisation initiatives,
including the development of the RES sector, electromobility and technological infrastructure, are increasing
the demand for copper components as a strategic raw material, thereby ensuring KGHM's stable market
position. Silver, as the key component in the production of photovoltaic cells and electronics, additionally
supports the development potential.
Volatility on the
currency market
Volatility in the USD/PLN exchange rate may be a significant limitation as well as a factor contributing to the
development of KGHM Polska Miedź S.A.
Table 11. Development constraints for the KGHM Group
Internal Factors
Hampered access to
copper ore deposits in
Poland
The mining of deeper ore deposits is associated with higher costs, more difficult geological conditions and
increased risk for employees, which imposes the development and implementation of advanced
technological solutions, while the costs of investing in innovative solutions are a challenge for the
Company's finances.
External Factors
Regulatory environment,
including stricter
environmental
regulations
An increase in the number and level of restrictiveness of regulatory solutions affecting the operations of
the Company and the Group, particularly in the context of technological risk associated with the transition
to low-carbon economy or environmental risks and forces KGHM to implement additional capital-intensive
investments in environmentally friendly technologies.
KGHM is required to pay a special minerals extraction tax, on copper and silver, which was introduced in
Poland in 2012. This tax is one of the highest in the world in the mining sector and its burden depends on
the amount of raw material extracted and their market prices, which means that an increase in the price
of copper and silver on the global markets increases the level of the tax. On an annual basis, this tax
accounts for a significant part of the company's operating costs, affecting its financial results, including
operating profitability and debt levels, and therefore impacting the level of investment capacity and
competitiveness in the international market.
Rising energy costs and
an increase in the
demand for RES energy
As one of the most energy-intensive companies in Poland, KGHM, which relies on conventional energy
sources, incurs significant costs due to rising electricity prices and CO₂ certificates, increasing the cost of
mining and processing of raw material, which additionally affects the company's competitiveness in the
global market.
The growing demand for energy from RES forces the KGHM Group to diversify its energy supply and invest
in its own low- and zero-emission energy sources.
Geopolitical uncertainty
The geopolitical situation, e.g. in face of the conflict in Ukraine and conflicts in the Middle East, has a
significant impact on KGHM’s operating risk. International conflicts, economic sanctions and trade tensions
may destabilise the supply chains of commodities and the availability of materials and components, fuels
KGHM Polska Miedź S.A. 38
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
and energy on international markets. International projects, particularly those advanced in Chile, are
exposed to political risks, changing tax regulations and local social protests, which may affect the stability
of the Company's operations.
Dependence on global
copper and silver prices
Significant sensitivity to fluctuations in international commodity prices may affect the company's financial
stability, especially under the conditions of economic downturns or demand volatility. KGHM must
effectively manage financial risk and hedge prices with futures contracts, which requires detailed market
analysis and a flexible management strategy.
Competition and
alternative technologies
The increased importance of copper recycling and the development of substitutes by the technology sector
may limit the growth rate of demand for primary copper, which will affect KGHM's long-term results.
Volatility in crude oil
prices
Volatility in crude oil prices related to fluctuations in the supply due to the extension of restrictions on
crude oil production by some OPEC countries, alongside an increase in production by non-OPEC countries
and as a result of sanctions imposed by the USA against major Russian oil companies and the energy sector,
Requirements in scope of
ESG
Increasing stakeholder expectations in terms of ESG requirements, which may, among others, translate
into funding terms.
Volatility on the currency
market
Volatility in the USD/PLN exchange rate may be a significant limitation as well as a factor contributing to
the development of KGHM Polska Miedź S.A.
1.4.4 Main assumptions of Budget 2025, realisation of the assumptions of Budget 2024
Table 12. Main assumptions of Budget 2025, realisation of the assumptions of Budget 2024
Unit
2024
Budget 2024
Realisation (%)
Budget
2025
Change (%)
KGHM Polska Miedź S.A.
Production of copper in concentrate
kt
400.1
391.0
102.3
392.3
(1.9)
Production of silver in concentrate
t
1 318
1 281
102.9
1 278
(3.0)
Electrolytic copper production, including:
kt
588.7
569.2
103.4
567.1
(3.7)
- from own concentrate
kt
383.7
370.4
103.6
375.4
(2.2)
Metallic silver production
t
1 316
1 239
106.2
1 260
(4.3)
Copper products sales volume
kt
589.6
593.2
99.4
572.9
(2.8)
Silver products sales volume
t
1 347
1 292
104.3
1 261
(6.4)
Total unit cost of electrolytic copper production
from own concentrate
21
PLN/t
31 641
35 950
88.0
35 375
+11.8
Capital expenditures on property, plant and
equipment
22
PLN mn
3 573
4 100
87.1
3 800
+6.4
Other investments, including loans
23
PLN mn
391
1 488
26.3
679
+73.7
KGHM INTERNATIONAL LTD.
Payable copper production
kt
60.5
58.3
103.8
52.1
(13.9)
TPM production
koz t
53.5
48.7
109.9
36.2
(32.3)
Sierra Gorda (55%)
Payable copper production
kt
80.5
87.5
92.0
87.2
+8.3
Molybdenum production
mn lb
3.3
5.7
57.9
4.1
+24.2
Achievement of Budget targets in 2024
In 2024, the Company recorded higher production of electrolytic copper by 19.5 thousand tonnes (+3%) than assumed in
the Budget for 2024, with production from own concentrate amounting to 13.3 thousand tonnes. In the case of silver,
production was higher by 77 tonnes (+6%). The increase in production contributed to silver sales exceeding the planned
volume by 55 tonnes, while copper sales were realised at a level lower by 3.6 thousand tonnes as a result of keeping some
of the copper products in inventories.
The production of payable copper and TPM in KGHM INTERNATIONAL LTD. was higher than assumed in the Budget by 2.2
thousand tonnes (+4%) and 4.8 thousand troy ounces (+10%), respectively, mainly due to mining in the area with larger
amounts of metal than assumed in the budget.
Production of payable copper and molybdenum in Sierra Gorda was at a level 7.0 thousand tonnes (-8%) and 2.4 million
pounds (-57%) lower, respectively, than the budget targets, mainly due to lower recovery and metal content in ore.
21
The sum of costs of mining, flotation, smelter processing per cathode and support functions, together with cathode selling
costs, adjusted by the value of inventories of half-finished products and work in progress, less value of anode slimes and
divided by the volume of electrolytic copper production from own concentrate.
22
Excluding costs of borrowing, leases per IFRS 16 unrelated to an investment project, expenditures on the purchase of CO
2
emission allowances as well as expenditures on development work – uncompleted.
23
Acquisition of shares and investment certificates together with loans.
KGHM Polska Miedź S.A. 39
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Total unit cost of electrolytic copper production from own concentrate (in PLN) compared to the budget is 12% lower. This
is affected by lower prices of gas, energy, materials and external services as well as higher relief by anode slimes (increased
production from own concentrate and increased silver and gold prices).
Capital expenditures on property, plant and equipment were realised at the level of PLN 3 573 million, or 13% lower than
assumed in the Budget. Other investments however, including increases in share capital of subsidiaries and other equity
investments, amounted to PLN 391 million versus the target of PLN 1 488 million. The failure to meet the budget targets
mainly concerns lower than planned financing of KGHM INTERNATIONAL LTD., rescheduling or cancellation of certain
projects and reclassification from share acquisitions (budget) to CAPEX (execution).
Budget targets for 2025
Production – lower copper production by the Group in 2025 by 23.3 thousand tonnes (-3%) compared to the amount
recorded in 2024:
− KGHM Polska Miedź S.A. -21.6 thousand tonnes (-4%) with lower production from own concentrate by 8.3 thousand
tonnes (-2%), which is mainly due to the build-up of inventories of anodes to be consumed in the second quarter of
2026 during the maintenance shutdown of Głogów II Copper Smelter and Refinery,
− KGHM INTERNATIONAL LTD. -8.4 thousand tonnes (-14%) decrease mainly due to the mineralogical composition of the
ore scheduled for mining at the Robinson mine (decrease in copper content),
− Sierra Gorda +6.7 thousand tonnes (+8%) – an increase mainly due to the planned processing of ore with higher copper
content than in 2024.
As a result of lower production, the assumed level of copper sales by KGHM Polska Miedź S.A. is lower by 16.7 thousand
tonnes (-3%).
The total unit cost of electrolytic copper production from own concentrate (KGHM Polska Miedź S.A.) increased by 12%,
mainly due to a rise in the costs of energy-related factors, materials, external services and labour costs, as well as lower
production from own concentrate resulting in lower valuation of anode slimes due to the planned decrease in volume of
silver.
Capital expenditures on property, plant and equipment (excluding costs of borrowing, leases per IFRS 16 unrelated to an
investment project and expenditures on uncompleted development work) – an assumed increase by 6% as compared to
the amount achieved in 2024 due to the greater scope of work and the expected price increases.
The 73% increase in capital expenditures assumed in the Budget for 2025 relates primarily to the financing of investments
in renewable energy sources.
1.5 RISK MANAGEMENT
The KGHM Polska Miedź S.A. Group defines risk as the impact of uncertainty, being an integral part of the activities
conducted and having the potential to result in both opportunities and threats to achievement of the business
goals.
The current and future, actual and potential impact of risk on the KGHM Polska Miedź S.A. Group’s activities is assessed.
Based on this assessment, management practices are reviewed and adjusted in terms of responses to risk.
− Under the implemented Corporate Risk Management Policy and Procedure and the Rules of the Corporate Risk
and Compliance Committee in force, the process of corporate risk management in the KGHM Polska Miedź S.A. Group
is consistently performed.
− KGHM Polska Miedź S.A. oversees the process of managing corporate risk in the KGHM Polska Miedź S.A. Group, while
in the companies of the KGHM Polska Miedź S.A. Group, documents regulating the management of this area are
consistent with those of the Parent Entity.
− The realisation of the aforementioned Policy and Procedure and approval of their updating is made at the level of the
Management Board of KGHM Polska Miedź S.A. following recommendations by the Corporate Risk and Compliance
Committee.
− The system of managing risk and the system of managing compliance are subjected to an efficiency audit compliant
with the guidelines of “Best Practice for GPW Listed Companies 2021” on an annual basis.
− Risk factors in various areas of the KGHM Polska Miedź S.A. Group’s operations are continuously identified, assessed
and analysed in terms of their possible limitation.
− Key risk factors in the KGHM Polska Miedź S.A. Group undergo in-depth analysis in order to develop a Risk Response
Plan and Corrective Actions. Other risk factors undergo monitoring by the Department of Corporate Risk
Management and Compliance, and in terms of financial risk by the division of the Executive Director for Financial
Management.
− The reporting of key types of corporate risk of the KGHM Polska Miedź S.A. Group is performed cyclically to the
Management Board of KGHM Polska Miedź S.A. and to the Audit Committee of the Supervisory Board of KGHM Polska
Miedź S.A.
KGHM Polska Miedź S.A. 40
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
The Company publishes key documents concerning risk and risk management on its website in section Risk management,
while those of only an internal nature are published through internal IT systems available to employees. Publicly-available
documents on the subject of corporate risk management may also be addressed to various external stakeholder groups as
part of establishing business relationships. Operational documents developed at individual stages of the risk management
process are addressed to those persons who are directly engaged in carrying out this process within the KGHM Polska
Miedź S.A. Group.
In order to unify the approach to the systematic identification, evaluation and analysis of the risk of a loss of compliance,
defined as adherence to the requirements arising from existing regulations (external and internal) or from voluntarily-
assumed legal obligations and standards (including ethical standards), since 2020 a Compliance Management Policy for
the KGHM Polska Miedź S.A. Group together with a Procedure and Methodology for managing compliance in KGHM
Polska Miedź S.A. as adopted by the Management Board of KGHM Polska Miedź S.A. has been in force. The process of
managing compliance, which is connected with the process of managing corporate risk within the KGHM Group, is an
important business tool for the prevention of events which could lead to the imposition of sanctions.
The Company keeps registers containing the applicable requirements resulting from identified external regulations
determining the Company's regulatory situation within various aspects of its business, as well as ongoing monitoring of
draft requirements at various levels of the legislative process in areas of key importance to the Company. The identified
external regulations are accompanied by the register of related regulations for the Company's internal legal system.
The Company’s approach enables systematic identification, assessment and analysis of the risk of loss of compliance or
possible non-compliance with generally applicable law, internal corporate regulations and voluntarily adopted legal
obligations and standards, including ethical norms, to ensure that the process produces a design and an implementation
of measures ensuring compliance.
The foregoing is to ensure that the Company has current information on non-compliance, compliance risk and their impact
on the organisation which ensures the creation and protection of shareholder value by establishing a consistent approach
to ensuring compliance and avoiding non-compliance or non-compliance risk, as well as supports the achievement of
business objectives by implementing tools to mitigate the risk of sanctions.
The compliance management process is also a valuable tool within the Company's broader management activities carried
out in the area of sustainable development. The identification of external requirements creating obligations for the
Company to maintain a sound approach to sustainability issues, including those related to sustainability reporting
standards, allows for understanding and adaptation of the Company's operations to the dynamic regulatory environment
in this area.
The identification of the requirements related to the individual areas that make up the concept of ESG, i.e. environment,
social responsibility and corporate governance, as well as the proper management of data acquired during various stages
of the compliance management process, such as information on incidents, compliance risks or non-compliance, are part of
the Company's due diligence approach in conducting its business in accordance with the principles of sustainable
development.
In 2024, the process continued of implementing a comprehensive business continuity management system, which also
enables a detailed breakdown of the scope of actions undertaken as regards managing corporate risk in terms of the risk
of a catastrophic impact and the limited probability of occurrence. Consequently, in November 2024, KGHM Polska Miedź
S.A. completed the first ISO 22301-compliant Business Continuity Management System Audit (BCMS). The BCMS audit
covered the Divisions of KGHM Polska Miedź S.A. where the production processes comprising the core business and the
Head Office are carried out. The documentation mandatory as part of the BCMS sets forth the principles and requirements
to build the resilience of KGHM Polska Miedź S.A. as regards catastrophic events by sorting out and unifying the current
approach to management of the risk of loss of operational continuity of the core production business and preparing for
unforeseen events.
KGHM Polska Miedź S.A. 41
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
The corporate risk management process adopted in the KGHM Polska Miedź S.A. Group is inspired by the solutions adopted
by the ISO 31000 standard, best practice in risk management and the specific nature of the Group, and is comprised of the
following steps:
Diagram 12. Corporate risk management process in the KGHM Polska Miedź S.A. Group
STEP 1
Defining the
Context
The first step in the process is comprised of three actions: defining the external context, the internal context and
the risk management context.
The external context is the environment in which the KGHM Polska Miedź S.A. Group advances its Strategy. Here
the definition needs to update the understanding of the social, political, legal, regulatory, financial, economic and
technological aspects of the environment which affect its activities. During this step also assessed, based on the
results of scenario analysis, are the most important factors for transitioning to a low-emission economy and the
paths of climate change and weather models, which are processed in subsequent steps of the process.
During the process of defining the internal context, goals are analysed (strategic/business), changes in the
organisational structure are planned and performed, new areas of activities, projects, etc.
The last part of this step is to define the risk management context, which comprises the setting or updating of
goals, the scope, responsibilities and procedures and methodologies applied in the risk management process.
STEP 2
Identification and
Evaluation
In this step of the process risks which could impact the achievement of goals at the level of the KGHM Polska
Miedź S.A. Group are identified and evaluated. The main task in this step is to prepare a complete list of threats
which could facilitate, impede, accelerate or delay the achievement of goals. Each identified risk is assigned to a
category and a sub-category in the form of a Risk Model, which provides the KGHM Polska Miedź S.A. Group with
a consistent risk taxonomy.
The following input parameters, data sources and assumptions are used as part of the identification and
evaluation:
− results of the Context analysis;
− Risk Model - a key tool in the context of ensuring that the list of risks is complete;
− the results of audits and other control tasks identifying potential new risks in operational areas;
− incidents that occurred in the past in connection with the identified risks, non-standard events that caused
the risk to materialise and had an actual (loss or gain) or potentially positive or negative impact on the
achievement of objectives;
− events that may result from the materialisation of risks and their potential consequences;
− ESG risk factors,
− the approach of the most likely loss or gain rather than the greatest possible loss or gain when assessing risk.
When identified, each corporate risk is subjected to assessment using the Risk Assessment Matrix, which provides
scaled assessment ranges for the scale of impact, vulnerability and probability. A risk may have various effects,
and therefore in order to ensure the broadest possible recognition of potential impact and the limitation of
subjective evaluation, the following Impact evaluation measures have been defined:
− finance – impact of the effects of a given risk in its financial aspect by applying value ranges,
− strategy – evaluation of the risk’s impact on the ability to achieve strategic goals,
− reputation and stakeholders – impact of the risk on the Company’s reputation, trust in the brand, investor
relations, relations with stakeholders, also including the context of the effectiveness of actions related to
building a responsible business and sustainable development,
− health and safety – direct impact on health and safety and human life,
− natural environment – impact of the materialisation of risk on the natural environment, the functioning of
the ecosystem and the time required to restore the disturbed balance,
1
Defining the
Context
RISK
4
Monitoring and
Communication
3
Analysis and
Response
2
Identification
and Evaluation
KGHM Polska Miedź S.A. 42
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
− regulations and laws – evaluation of the compliance of events with existing laws, with the need to participate
in proceedings before bodies of public administration of a supervisory and regulatory nature as well as
potential sanctions as a result of such proceedings,
− operational continuity – evaluation of the impact of risk on interruptions to activities resulting in
significant/irreversible effects and loss of access to information important from the point of view of
conducted activities.
The results of the identification and evaluation of risk are presented in a graphic form, i.e. Risk Maps.
These provide a profile of the given risk and support the process of identifying the key risk.
STEP 3
Analysis and
Response
The goal of this step is to deepen knowledge and to understand the specific nature of the types of key risks
identified in the previous step. Cause and effect analyses and a more substantive description of the means of
dealing with risk are aimed at facilitating decision making on whether to maintain or eventually change current
actions.
The following input parameters, data sources and assumptions are used as part of this step for the purpose of
determining the risk management methods:
− results of the previous stages of the process, including the identified ESG risk factors,
− a comprehensive approach that takes into account points of contact with other areas, outside the Risk
Owner's area of competence, where the effects of risk materialisation may still be significant or even greater
than in the Risk Owner's area,
− an overview of the current approach to risk,
− an analysis to identify potential gaps in the way risks are managed in order to determine the necessary
Adaptation Measures.
A directional decision is called a Response to risk. A change in the approach requires specification of Corrective
Actions, i.e. organisational, process, systemic and other changes aimed at reducing the level of key risks. As a
consequence of decisions regarding the acceptance of actions identified in response to risks, the necessary
financial, human or investment resources are provided as required.
During this step KRIs – Key Risk Indicators – are also defined, i.e. a set of business process parameters or
environmental parameters which reflect changes to a given risk profile.
STEP 4
Monitoring and
Communication
The goal of this step is to ensure that the adopted Risk Response Plan is effective (ad hoc and periodic reports),
new risk categories are identified (updating of the Risk Registry), changes in the internal and external
environments and their impact on activities are identified, and appropriate actions are taken in response to
incidents (updating of information on Incidents).
Effective, well-planned and properly executed risk monitoring enables flexible and quick reactions to the changes
occurring in the external and internal environments (e.g. risk escalation, changes in the measures related to risk
response, or risk assessment parameters, etc.).
Realisation of this step guarantees that risk management in the KGHM Polska Miedź S.A. Group fulfils the
expectations of the Management Board of KGHM Polska Miedź S.A., the Audit Committee of the Supervisory
Board of KGHM Polska Miedź S.A. and other stakeholders by supplying reliable information about risk, continuous
improvement and adaptation of the quality and effectiveness of Risk Response to the demands of the external
and internal context.
KGHM Polska Miedź S.A. 43
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Translation from the original Polish version
Diagram 13. Organisational structure of risk management in KGHM Polska Miedź S.A.
Supervisory Board (Audit Committee)
Performs annual assessment of the effectiveness of the risk management process and monitors the level of risk and ways to address it.
Management Board
Has ultimate responsibility for the risk management system and supervision of its individual elements.
1st line of
defence
2nd line of defence
3rd line of
defence
Management
Risk Committees
Audit
Managers are
responsible for
identifying,
assessing and
analysing risk and
for the
implementation,
within their daily
duties, of responses
to risk. Managers are
tasked with ongoing
supervision over the
application of
appropriate
responses to risk
within the realised
tasks, to ensure the
expected level of risk
is not exceeded.
Support the effectiveness of the risk management process.
The Internal Audit
Plan is based on
assessing risk and
subordinated to
business goals, the
current level of risk
and the degree of
efficiency of its
management is
assessed.
Corporate Risk and
Compliance
Committee
Market Risk
Committee
Credit Risk
Committee
Financial Liquidity
Committee
Manages
corporate risk and
continuously
monitors key risk
Manages risk of
changes in
metals prices
(e.g.: copper and
silver), other
merchandise
(including
energy), as well
as exchange and
interest rates
Manages risk of
failure of
customers to
meet their
obligations
Manages risk of loss of
liquidity, understood as the
ability to pay current
liabilities on time and to
carry out necessary
purchases as well as the
ability to rapidly obtain
financing for operations
Corporate Risk
Management
Policy
Compliance
Management
Policy
Operational
Continuity
Management
Policy
Market Risk
Management
Policy
Credit Risk
Management
Policy
Financial Liquidity
Management Policy
Internal Audit Rules
Director of the
Corporate Risk
Management and
Compliance
Department
Executive Director for Financial Management
Executive Director for
Internal Audit
Reports to the
Management
Board
Reports to the Vice President
of the Management Board (Finance)
Reports to the
President of the
Management Board
1.5.1 Corporate risk – key risks and risk factors and mitigation
A comprehensive approach to risk management is consistent across the KGHM Polska Miedź S.A. Group and it was designed
in such a way as to support the building of a resistant corporate structure.
Our comprehensive approach in this area is also reflected in the actions taken by KGHM in the reporting period regarding
risks associated with the ESG area, i.e. environmental, social and corporate governance issues. The approach to the ESG
risk management is further described in section 4.1.2 IRO -1 Description of the process of identification and assessment of
significant impact, risks and opportunities and SBM-3 Material impacts, risks and opportunities and their interaction with
strategy and business model.
KGHM Polska Miedź S.A., as part of its risk management, takes into account issues related to climate change in
accordance with best practices and standards and distinguishes a category of climate risk, the significance of which is
equivalent for the Company to the other categories of risk. In section 4.1.1 GOV-5 Risk management and internal controls
over sustainability reporting we describe in more detail our climate risk management strategy, which is one of the elements
of the Company's commitment to operational excellence and its mission to act in accordance with sustainable business
principles.
The Risk Model is a tool used to identify risk in the KGHM Polska Miedź S.A. Group. Its structure is based on the sources of
risks and is divided into the following six categories: Technological, Value Chain, Market, External, Internal and Climate.
Several dozen sub-categories have been identified and defined for each of these categories, covering particular areas of
the operations or management. The KGHM Polska Miedź S.A. Group applies due diligence when undertaking actions aimed
at minimising exposure to risk by lowering vulnerability to individual risk factors and reducing the probability of the
materialisation of events which such factors could induce.
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The KGHM Polska Miedź S.A. Group, as part of the improvement of the corporate risk management process, applies a two-
track approach consisting not only of limitation of the risk and minimisation its negative effects, but also in optimisation
of the ability to take risks and the effectiveness of the tools used and their profitability. The two-track approach is also
reflected in the assessment of dual materiality performed as part of the ESG risk analysis, where both the materiality
of KGHM's impact on humans and the environment, but also financial materiality, understood as the impact of climate
change and sustainable development issues on KGHM, are assessed.
Diagram 14. Risk categories in the Risk Model of KGHM Polska Miedź S.A. and their definitions
Technology
This category is associated with changes in competitiveness resulting from the application of industrial
technology, IT, innovation management, protecting and/or managing intellectual property as well as the impact
of investment projects involving productivity and technology quality, or changes in the quality and efficiency of IT
infrastructure affecting business units, support functions and infrastructure.
Value chain
This category is associated with changes in the operational efficiency of logistics and warehousing in the
production process and in providing services, in managing sales, in managing waste and restoration as well as
being correlated with the process of managing the supply chain, the availability of utilities and materials in the
production process, changes in the evaluation and management of mineral deposit resources, or the
advancement of research and exploration projects.
Market
This category is associated with changes in the value of assets, the level of liabilities or profit and loss resulting in
a change in the sensitivity to interest rates, currencies, liquidity, inflation rates, customer insolvency, commodities
prices, energy and property rights. This category also involves changes in the impact of demand and supply on
the products of the KGHM Polska Miedź S.A. Group, the selection of appropriate tools to advance the marketing
strategy, changes in expected rates of return on equity investments or the efficiency of transferring risk to the
insurer.
External
This category is associated with the conditions involved in conducting activities resulting from changes in
economic conditions, changes in laws and regulations (compliance), political decisions, changes in the natural
environment as well as catastrophic natural events and force majeure. This category also comprises changes in
market share or margins due to changes in the competitive environment or substitutes, the risk of the result of
decisions in the courts or arbitration proceedings, the risk of unfavourable administrative decisions,
changes in obligations, the designation of tax liabilities or their payment deadlines.
Internal
This category is associated with changes in an entity’s activities affected by changes in its structure, organisation,
procedures, processes or business model, as well as the risk of changes in corporate image, its
products or services, the effectiveness of principles of proceedings related to ethics and anti-corruption,
company’s interests, or safeguards against loss of confidentiality, integrity, availability and
authenticity of informational assets.
Climate
This category is associated with climate-related risk (climate risk) and its impact on the KGHM Polska Miedź S.A.
Group’s business activities, comprising physical risk (violent and chronic) and risk associated with transition to a
low-carbon economy (regulatory, reputational, market and technological).
Following is the detailed description of key risks and their factors for the KGHM Polska Miedź S.A. Group in 2024, broken
down into individual categories along with means for their mitigation, including identification of the specific risk for the
Parent Entity and the KGHM INTERNATIONAL LTD. Group. A key risk is future uncertain events having the greatest impact
on the achievement of the business goals of the KGHM Polska Miedź S.A. Group, reflecting an evaluation of vulnerabilities,
i.e. the ability of the organisation to limit the possibility of the occurrence of risk and the impact of its materialisation.
KGHM Polska Miedź S.A. 45
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Translation from the original Polish version
The tables below use the following abbreviations: for the KGHM Polska Miedź S.A. Group - KGHM Group, for the KGHM
INTERNATIONAL LTD. Group - KGHM INTERNATIONAL Group, for KGHM Polska Miedź S.A. - Parent Entity. The following
graphics are used in the tables below:
1. Risk category - Technology in the Risk Model of KGHM Polska Miedź S.A.
Risk
Score
Description
Mitigation
(Parent Entity)
1.1 Risk of failure to
adapt the
technology to the
requirements of the
production process
in terms of capacity
of metallurgical
installations
Sources of risk include potential
breakdowns of key elements of the core
production line and failure to adapt
technology to production requirements,
which could affect the availability of
metallurgical infrastructure. An
important risk factor is the need to
maintain the production of concentrates
in an amount and quality required to
optimise the utilisation of the
metallurgical facilities. Exposure to the
risk is also associated with the risk of the
failure to ensure required utilities to
maintain the expected level of the
infrastructure availability ratio.
Optimum utilisation of infrastructure, maintaining an
appropriate mix of concentrates, R&D initiatives and
advancement of programmes and projects to adapt
structure of metallurgical facilities and technology to
ensure higher processing capacity for own
concentrates, purchased copper-bearing materials
and purchased scrap. Action is taken on an ongoing
basis to ensure technical working order of
maintenance and service systems. The competence of
process controllers, including employees responsible
for storage, tanks or transmission networks, are
constantly being improved. An overhaul policy and
emergency procedures are in place and suppliers are
monitored on an ongoing basis within the scope
described in instructions and contracts. Actions
undertaken are aimed at maintaining the availability
of metallurgical equipment at the expected level and
improving the productivity parameters of
metallurgical infrastructure, as well as limiting the
negative impact of this risk on operations.
2. Risk category - Value Chain in the Risk Model of KGHM Polska Miedź S.A.
Risk
Score
Description
Mitigation
(KGHM
INTERNATIONAL
Group)
2.1. Risk related to
the estimation of
costs of
decommissioning
certain mines
With respect to risk factors related to the
precision of estimated costs of
decommissioning certain mines, there
are questions related to the need to
meet obligatory environmental
conditions connected with realistic
concepts for such decommissioning.
There is also a risk that the Company will
have to cover the costs of restoration
more quickly than originally assumed,
which may have an impact on the need
to update the estimated costs
associated with such a venture.
Estimated costs of restoration and mine
decommissioning based on expert reports and
providing guarantees of future environmental
obligations related to the decommissioning and
restoration of mining areas in accordance with
existing laws and regulations. Work is also in progress
with the aim to extend the Life of Mine (LOM) of
individual active mines which will allow to reduce
and/or delay closure costs and optimise cash flow
enabling to cover potential restoration costs.
KGHM Polska Miedź S.A. 46
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(KGHM
INTERNATIONAL
Group)
2.2 Risks related to
the exhaustion of
deposits and/or
insufficient
exploration of their
parameters and
characteristics
The risk of changes in the evaluation and
management of ore deposits involves,
among others, geological factors related
to the reliable estimation of resources or
mining conditions. Risk factors related to
the limited reliability and completeness
of data, based on which new resource
projects are evaluated, may lead to the
taking of less than optimal decisions on
advancing or suspending projects. Due
to the high maturity of KGHM
INTERNATIONAL LTD. assets and their
relatively short Life of Mine, the risk also
relates to the possibility of exhaustion of
deposits before new production capacity
is secured.
Input data for models are collected in accordance with
geological documentation possessed, which is
prepared pursuant to laws in force as well as reviewed
and consulted internally with experienced staff. The
results of current work undergo particular analysis
and preliminary project assumptions are updated.
Expenditures incurred on exploration and evaluation
enable the estimation of mineral resources and
investigation of geological-mining conditions aimed at
planning further mining activities.
Individual assets focus on investment in near-mine
exploration opportunities, productivity gains, cost
optimisations and efficiency gains to expand the
reserve base and consequently expand the LOM Plan.
(KGHM
INTERNATIONAL
Group)
2.3. Risk of lower
metal recovery and
quantity and
quality relative to
budget targets
The risk is associated with factors
relating to the parameters and
characteristics of the deposit that affect
the recovery, quantity and quality of the
products. The risk may result in a decline
in production due to lower extraction
from metal-poor zones or due to the
content of undesirable elements.
Ongoing analyses and forecasts of results are carried
out in order to optimise the mixing strategy, optimise
recovery or other processes that may affect the
quantity and quality of the products obtained.
(Parent Entity)
2.4. Risk of
limitation or
inability to store
and manage mine
tailings
The Parent Entity is exposed to the risk
of a lack of sufficient tailings storage
capacity at the Żelazny Most Tailings
Storage Facility. Risk factors involve the
management and control of the facility,
maintaining the technological regime
and meeting environmental
requirements. Another source of risk are
external factors with respect to
administrative bodies and the
requirement to obtain the necessary
administrative decisions for the
functioning of the facility. Some risk
exposure is also linked to the possible
unscheduled shutdowns resulting from
infrastructure breakdowns, which may
impact the continuity of operation of the
Core Production Business.
The risk is also related to the increase in
tailings volume, including the increase in
the mass of raw materials processed in
the context of content of metals and
substances processed to products. The
limitation or inability to continue the
storage/management of tailings may
result in restrictions or suspension of
operations of the entire facility (or a part
thereof).
Preventive measures are taken to ensure that all
formal and legal requirements are met in order to
obtain the required administrative decisions with
regard to the advancement of the Żelazny Most
Tailings Storage Facility expansion project. The
monitoring of the realisation of the procedures by
offices is carried out and realistic timetables have
been developed for the realisation of activities with
the involvement of specialised staff and
management. At the same time, a number of activities
are in progress related to the development of the
most optimal and effective model of cooperation with
the local community and other stakeholders in the
project.
As part of the Core Production Business’ operations,
work is carried out to modernise the tailings transport
infrastructure and ensure that there is a sufficient
reserve capacity in the facility, with the right
technological regime during realisation.
Advance preparation of landfills and storage sites that
comply with legal requirements is carried out.
Segregation of tailings. Research and development
work on further ways of using and managing tailings.
Ongoing monitoring of waste stocks is carried out in
order to comply with the regimes determined by the
integrated permits, i.e. within certain limits and
specific rules. Waste records, reports, external
reporting and compliance assessments are carried
out.
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Translation from the original Polish version
(KGHM Group)
2.5. Risk of
exceeding the
permissible
emissions limits set
forth in permits and
leakage of
substances
hazardous to the
environment
The KGHM Group is exposed to the risk
of impact on individual components of
the natural environment resulting from
the mining activity, followed by its
processing at all stages of the
production process, which could lead to
exceeding of permissible emissions
limits. The risk also relates to leakages
which can extend beyond the company
and result in negative environmental
impacts, leading to penalties and
compensation for potential
environmental damage. The financial
effects simultaneously represent the
costs associated with investments
enabling, among other things, the
detection of environmental leakages in
multiple locations or the costs
associated with the need to stop a
leakage, e.g. as a result of an accident
and in the extreme case, the costs of
shutting down the operation of an
installation as a result of an
administrative decision. Materialisation
of the risk may also adversely affect
KGHM's reputation.
KGHM's smelter divisions have been included in the
Air Protection Programme since 2015. In view of the
legal requirements in force, KGHM has developed a
BATAs investment program adapting metallurgical
installations to the requirements contained in the BAT
conclusions, thereby reducing emissions of
pollutants, in particular arsenic emissions.
Installations belonging to KGHM are obliged to
monitor emissions of pollutants to the extent
established in the relevant permits, which now also
include the requirements of the BAT Conclusions.
Emission monitoring allows to confirm that
installations are emitting pollutants in quantities
allowed by the permits.
Preventive measures include leakage detection kits
available at each site, an environmental incident
management system and a standard of operations,
maintenance and surveillance for facilities
management. Relevant equipment standards and
leakage detection protocols also apply.
(KGHM Group)
2.6. Risk related to
the lack of
availability of
necessary utilities
The KGHM Group is exposed to the risk
of lack of availability of utilities for its
operations. Potential disruptions in the
supply of key utilities (in particular
electricity) is mainly related to risk
factors on the part of external suppliers
and breakdowns of their distribution
infrastructure. Risk is also related to the
suspension of delivery of utilities as a
result of long-lasting droughts, leading
to periodically lower water levels in
rivers, which could cause restrictions in
work of KGHM’s suppliers. Amongst
internal factors, the most important
involve questions of maintaining
operations, mining, advanced
investments and modernisation work.
The potential impacts relate to losses
associated with reduced/suspended
production. As a result of risk
materialisation, industrial water supply
interruptions and the inability of water-
using installations and units to operate
(e.g. cooling of metallurgical units) may
occur. The risk is associated with the
physical climate risk, which includes
risks resulting from the low level of the
Odra River. Potential financial losses are
related to reduced or suspended
production if the risk materialises.
Ensuring back-up systems for the supply of critical
utilities and on-going assessment of the security of
the power network. Conducting investment projects
aimed at strengthening energy security. Framework
agreements with utility suppliers increasing the
security of supplies. Systematic limitation of energy
consumption under the implemented, ISO
50001:2018 compliant Energy Management System.
Planned increase in the efficiency and flexibility of the
KGHM Group in terms of its Polish and international
assets, among others by partially satisfying the
demand for electricity from its own sources as well as
from renewable energy sources (“RES”).
Activities in line with the water permit and care for the
technical condition of the distribution infrastructure.
Reliable design of water networks for new
investments, renovations. Safeguarding the
operation of water systems during freezing weather.
Research and development activities aimed at
reducing industrial water consumption. Securing the
distribution infrastructure against accidental damage
during construction, earthworks (work not directly
related to infrastructure maintenance). Emergency
procedures including the description of the
procedure to be followed in the event of the low level
of the Odra River.
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Translation from the original Polish version
(KGHM Group)
2.7. Risk related to
infrastructure
breakdowns which
disrupt the core
production
operations,
associated with
natural hazards as
well as internal
factors related to
the applied
technology
The KGHM Group is exposed to risk
related to the technological potential
and efficiency of its infrastructure to
meet the needs of the production
process. By utilising infrastructure
required to maintain its operations,
KGHM is exposed to the risk of industrial
breakdowns resulting in unplanned
shutdowns. Such breakdowns could
result both from natural hazards, i.e.
catastrophic natural events and force
majeure as well as internal factors
dependent on the KGHM Group (on-
going operations, maintaining
production, key suppliers, servicing).
Preventive management of key infrastructure
elements affecting production continuity.
Appointment of a task and expert teams in the area
of counteracting infrastructure breakdowns. Current
geotechnical risk analyses. Gradual replacement of
older technology with newer solutions, reflecting the
corporate architecture standard. Use of prism and
radar monitoring systems with warning system in all
open pit mines.
Corporate standard for geotechnical risk
management. Improved mine design parameters.
Third party reviews and guidelines on design
parameters
In 2024, the first Certification Audit of the Business
Continuity Management System (BCMS) compliant
with ISO 22301 in KGHM Polska Miedź S.A. was
completed. The Audit of the Business Continuity
Management System covered the Divisions of KGHM
Polska Miedź S.A. where the production processes
comprising the core business and the Head Office are
carried out. The result of the audit was a positive
recommendation to grant certificates.
(KGHM Group)
2.8. Risk of
disruption to the
continuity of sales
and service
processes
Due to its extensive sales and service
structure, the KGHM Group is at risk of
disruptions of the continuity of these
processes caused primarily by external
factors. For the Parent Entity, the key risk
is the limitation of the ability to sell
sulphuric acid (due to loss of
market/customers and/or a decline in
demand also due to the war in Ukraine).
Risk related to macro- and
microeconomic factors involving
political actions which result in privileges
for a specific group of producers or the
introduction of additional fees/legal
restrictions. Risk related to unfavourable
prices (volatility to the disadvantage of
KGHM), high requirements in terms of
market parameters for selling sulphuric
acid and lower demand for the product
on international markets, including as a
result of the deterioration of the
financial condition of a key customer as
well as disruptions in transport and
logistics.
Increasing the number of internal storage tanks at
smelters as well as of reservoirs in the port in
Szczecin. Search for new markets. Long-term
contracts. Search for alternative ways to manage the
acid and utilise it in the Ore Enrichment Plants.
In the case of the KGHM
INTERNATIONAL Group, the risk is
related to lower sales of ore and
concentrates in a given year than
expected. The main risk factors relate to
sales and logistics processes, including,
among others, the operational efficiency
of the port used for transport or the
availability of rail carriages.
In 2024, general uncertainty in the
markets related to the armed conflict in
Ukraine was a factor affecting the risk
exposure. However, the KGHM Group's
vulnerability to this risk is assessed as
low due to the control mechanisms in
place and the lack of recorded incidents
in the past quarters.
Improving the efficiency of the way production is
forecast and planned in all areas. An increase in the
rate of extraction and the quality of the material
obtained. Regular discussions with potential and
current customers. Ongoing monitoring of the
customer situation, enabling a dynamic response to
customer needs (e.g. cyclical teleconferences,
availability and mobilisation of staff, use of various
information exchange channels and response to
emerging disruptions), analysis of the situation
affecting customer operations and logistics in
individual recipient countries and transit routes.
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(KGHM Group)
2.9. Risks associated
with disruptions in
the supply of
strategic materials
and components
affecting the
continuity of the
Core Production
Business
The KGHM Group is exposed to the risk
of disruptions in the management of the
supply chain resulting mainly from
external factors causing an increase in
the sensitivity of the supply chain. These
factors include, but are not limited to:
unpredictable variations in supply and
demand, changes in supplier bases,
technological changes, changing
inventory buffers and lead times,
dependence on suppliers, as well as
logistical disruptions, force majeure and
fluctuations in currency exchange rates
and metal prices. The efficiency of global
supply chains can also be affected by
high inflation. Risks are also associated
with disruptions in the transport of
concentrate to the smelters due to the
lack of rail carriages, inability to load
concentrate and/or forward it, railway
breakdowns, etc.
In 2024, general uncertainty in the
financial markets related to the armed
conflict in Ukraine was a factor affecting
the risk exposure. However, the KGHM
Group's vulnerability to this risk is
assessed as low due to the control
mechanisms in place and the lack of
recorded incidents in the past quarters.
Permanent contact with suppliers is maintained to
enable a quick response to delays through the
supplier and supply direction diversification strategy
employed in the KGHM Group and application of
alternative solutions, e.g. substitutes, changes in
production/assembly schedules. Alternative supply
channels, buffers in the form of inventories, advance
planning in terms of materials and components while
maintaining the compatibility of the solutions used in
the infrastructure are also used. Moreover, business
continuity and recovery plans have been developed
as part of the implementation of an ISO 22301-
compliant business continuity management system.
Systematic measures are taken to eliminate single
instances of delays on the side of suppliers due to
unavailability of components, logistics limitations or
delays on the side of the manufacturers of materials
and machinery or their parts. In the context of the
transport of concentrate to the smelters, agreements
have been concluded to guarantee the security of
supplies. Initiatives to improve the availability of rail
carriages are underway, the Improved Concentrate
and Ore Logistics programme has continued and
alternative means of transport have been developed
for rail transport incidents.
(KGHM Group)
2.10. Risks related
to the execution of
production plans in
relation to
availability and
efficiency of the use
of resources
The KGHM Group is exposed to the risk
of failing to meet production plans in
relation with the availability of human
resources. Key risk factors relate to,
among others, the legal requirements
regarding work in the KGHM Group
plants, the status of employment and
the applicable employment and
remuneration rules. The risk is
associated with the availability of
adequately qualified workers on the
labour market.
Ongoing identification of staffing needs in terms of
necessary qualifications and their complementation
while taking into account staff turnover. Ongoing
recruitment to balance out natural employee
departures, e.g. due to retirement. Intra-
departmental transfers. Implementation of a range of
HR initiatives to reduce negative and increase positive
impacts on the workforce e.g. the implementation of
health and prevention programmes to reduce
sickness absence and improve the overall health of
employees, provision of regular occupational health
and safety training to minimise accidents at work,
implementation of talent and career management
programmes including succession plans to ensure
continuity and development of the organisation,
training.
In the case of the KGHM
INTERNATIONAL LTD. Group, the risk
also relates to the other resources
required to meet the production plans
(logistics) and is related to the
effectiveness of their use in conjunction
with the efficiency and availability of
these resources.
The solutions used for reporting and analysing critical
indicators have been improved to enable more
effective decision-making in this area. Controls and
improvements in the renovation policy and
emergency procedures have been implemented.
Periodic inspections and maintenance as well as
reliability maintenance are performed to minimise
the likelihood of unscheduled repairs. Systematic
service and supervision by qualified staff. Providing
financial resources for maintenance, repair and
investment management.
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Translation from the original Polish version
3. Risk category - Market in the Risk Model of KGHM Polska Miedź S.A.
Risk
Score
Description
Mitigation
(KGHM Group)
3.1. Risk of reduced
revenues as a result
of adverse
fluctuations in
copper and silver
prices, currencies
and interest rates.
Market risk is understood as the
possibility of a negative impact on the
results of the KGHM Group resulting
from changes in the market prices of
merchandise, exchange rates and
interest rates, as well as changes in the
value of debt securities and share prices
of listed companies.
In 2024, general uncertainty in the
financial markets related to the
geopolitical situation was a factor that
could affect risk exposure. No
significantly negative impact on this
account was recorded during the
reported period.
This risk is actively managed by the Parent Entity, in
accordance with the Market Risk Management Policy
currently in force. One of the methods used to
manage the market risk in the Company are the
hedging strategies using derivatives. The so-called
natural hedging is also used, which involves
borrowing in the currencies in which revenues are
generated.
More information on market risk is included later in
this subsection.
(KGHM Group)
3.2. Credit risk
related to trade
receivables and
loans granted
The KGHM Group sells some of its
products with deferred payment dates,
as a result of which there may arise the
risk of late payments from customers for
delivered products.
The Parent Entity is exposed to credit
risk related to the loans granted to the
joint venture Sierra Gorda S.C.M., which
depends on the risks associated with the
realisation of the mining project.
In 2024, general uncertainty in the
financial markets related to the armed
conflict in Ukraine was a factor that
could affect the risk exposure. No
significantly negative impact on this
account was recorded during the
reported period.
This risk is actively managed by the Parent Entity, in
accordance with the Credit Risk Management Policy
currently in force. Limiting exposure to credit risk by
assessing and monitoring the financial condition of
customers, setting credit limits and using legal
collateral for trade receivables. The companies of the
KGHM Group have for many years cooperated with a
large number of customers, leading to the geographic
diversification of trade receivables.
More information on credit risk is included later in this
subsection.
(KGHM Group)
3.3. Liquidity risk
The risk of loss of liquidity is understood
as the ability to pay current liabilities on
time and carry out required purchases
as well as to rapidly obtain financing for
the operations.
In 2024, general uncertainty in the
financial markets related to the armed
conflict in Ukraine was a factor that
could affect the risk exposure. No
significantly negative impact on this
account was recorded during the
reported period.
This risk is actively managed in the Parent Entity, as
well as in the short, medium and long term, in
accordance with the Financial Liquidity Management
Policy currently in force.
Further information on liquidity risk is presented later
in this section.
(KGHM Group)
3.4. Risk related to
the cost efficiency of
the production
process, mining
projects, processing
of copper-bearing
materials, reflecting
the risk of a
substantial rise in
prices of materials,
services and utilities
The KGHM Group is exposed to risks
related to external and internal factors,
including among others metal
quotations, foreign exchange rates, the
cost of purchased metal-bearing
materials, the processing and refining
premiums as well as sales bonuses and
the cost of services and utilities.
The risk is significantly linked to the
increase in operating costs as a result of
the rise in the price of energy carriers.
In 2024, general uncertainty in the
financial markets related to the armed
conflict in Ukraine was a factor that
could affect the risk exposure. No
significantly negative impact on this
account was recorded during the
reported period.
Ongoing control of processing costs, monitoring the
market situation, optimising costs, including supplies
of purchased metal-bearing materials, hedging
transactions and management of the net position.
Creating multi-year plans and budgets enabling the
achievement of profitability under the conditions
prevailing on the market. Ongoing monitoring of
selected financial information to support
management processes under conditions of
increased uncertainty.
The purchase of electricity is carried out within
bilateral contracts, framework agreements, the Polish
Power Exchange.
Securing the supply of electricity in various periods
and on many levels, using in-house generation, which
significantly increases the energy security of the
KGHM Group. Implementation of the Energy
Development Programme. The KGHM Group also
carries out ongoing activities to optimise the increase
in electricity costs through, for example, the purchase
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of energy-saving equipment. The purchasing policy of
electricity and gas fuel has been implemented for
years by the Energy Committee established by Order
of the President of the Management Board.
4. Risk category - External Risks in the risk model of KGHM Polska Miedź S.A.
Risk
Score
Description
Mitigation
(KGHM Group)
4.1. Risk of reduced
production due to
seismic tremors and
associated roof
collapses or
destressings of the
rock mass, and the
occurrence of
uncontrolled rock
bursts.
The KGHM Group is exposed to the risk
of natural hazards and force majeure
and related insufficient geological
knowledge of the rockmass. Key risk
factors which affect the materialisation
of such risk also involves the results of
periodic analyses of the mining situation
and the state of hazard and applied
measurement methods. Natural
hazards accompanying the
underground mining of copper ore
deposits, in particular hazards related to
mining tremors and their potential
effects in the form of rock bursts and
roof collapses.
These factors affect security, as their
occurrence can lead to serious or even
fatal injuries as well as damage to
underground machinery, equipment
and infrastructure, along with
production downtimes resulting in
reduced production.
Actions aimed at preventing rock bursts and roof
collapses, such as systematic seismological
observations, on-going assessment of the rock mass
and the designation of zones of particular threat of
rock bursts. Use of active methods of preventing rock
bursts and roof collapses based on provoking
dynamic events through mass blasting of mining
faces and through blasting to release stress in the
orebody or its roof.
Preparation of reserve fields to take over production
on a limited basis.
Cyclical meetings of the Team of KGHM Polska Miedź
S.A. for Combating Rock Bursts and Roof Collapses.
Securing access to the functionality of mining
geophysical systems against data loss as part of the
IT/OT system approach.
(Parent Entity)
4.2. Risk of
restrictions to
production or to the
advancement of
development work
due to geodynamic
gas-related events
and the occurrence
of naturally-
occurring gases.
KGHM is exposed to the specific risk of
natural hazards and force majeure (gas-
related geodynamic hazards and the
occurrence of naturally-occurring
hazardous gases) leading to restrictions
in implementing production plans and
the advance of preparatory work. These
factors affect security, as their
occurrence can lead to serious or even
fatal injuries as well as damage to
underground machinery, equipment
and infrastructure, along with
production downtimes resulting in
reduced production.
The risk of gas hazards occurring is being assessed
and principles are being developed for working under
the risk of such hazards. Individual employee safety
measures are applied as well as equipment and
means for reducing concentrations of hydrogen
sulphides and neutralising oppressive odours.
Preparation of reserve fields to take over production
on a limited basis.
The creation of a KGHM Polska Miedź S.A. Team for
Mine Ventilation and Air Cooling, whose job is to
analyses and provide an opinion on tasks involving
the recognition and prevention of gas threats and the
threat of gas and rock bursts in the mines.
On a regular basis, an assessment of gas and gas-
geodynamic hazards at all mine sites is carried out at
meetings of the Mine Team to Recognise and Prevent
gas threat and the threat of gas and rock bursts.
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(Parent Entity)
4.3. Risk of reduced
production due to
unfavourable
climate conditions in
mines
KGHM is exposed to a specific risk
related to the underground climate,
limiting activities or increasing costs,
involving geological conditions, the
temperature of the air sent into the
mines and underground mining
conditions.
The use of solutions to counteract underground
climate risk using neutral means (e.g. the use of short
airways and directing air from the lowest temperature
rock mass, high-speed air) and through the use of
central, workplace and personal air conditioning.
Ongoing monitoring of the microclimate parameters
and introduction of remote control and visualisation
and surveillance systems (CCTV cameras) in
workplaces with particularly adverse climate
parameters.
Securing access to system functionality and against
data loss as part of an IT/OT systems approach
Reduction of external and internal losses and relative
humidity and increase in airing intensity. The use of
shortened working time.
(Parent Entity)
4.4. Risk of loss of
excavation
functionality
associated with
underground water
hazards
The KGHM Company is exposed to the
risk of natural hazards and force
majeure in the form of underground
water hazards resulting from
breakdowns of the main drainage
equipment, human error (actions
contrary to the project or technology) or
errors in geological exploration.
Unfavourable hydrogeological
conditions may lead to a reduction in
activity (e.g. a reduction in mining) or
increased costs associated with, among
others, the management of increased
water inflows at the Żelazny Most
tailings storage facility. Exposure to risk
is increased by climate factors
associated with periodic droughts and
the low level of the Odra River.
The Company carries out extensive risk mitigation on
many levels by, among other things, monitoring of
hydrogeological conditions and water hazards,
carrying out a water balance from inflow to mine
workings, carrying out mining work in accordance
with the technology for safe mining work in
underground mines, systematic inspection of
workings at risk of water intrusion, controlling the
condition of water flow paths and dams according to
a specific schedule. The activities of the water hazard
team continue, among others, with regard to the
ongoing assessment of the water hazard status for
mining works and the adaptation of prevention. Rock
mass injection is carried out to reduce inflow and
stabilise the layers above the workings. Measures
have been taken to adjust the drainage capacity to the
expected projected (updated) inflows. A reserve of
main drainage pumps is made to maintain operating
continuity of the pumping station.
Development of regional pump stations and the
piping system, construction of dams aimed at
stopping water inflow, drilling exploratory holes to
stabilise uncontrolled water inflow. In order to
mitigate the risk, the project entitled “Construction of
the main drainage system in the area of the SW-4
shaft” is continued, which should ultimately increase
the capacity of mine water draining.
Securing access to system functionality and
preventing data loss as part of the approach used in
the area of IT/OT systems.
Conducting the monitoring of hydro-technical
conditions and the technical performance of facilities
and infrastructure. Ongoing modernisation,
refurbishment, proceeding in accordance with the
operating instructions. Exploring technological and
organisational options for reducing the amount of
water retained in the Żelazny Most tailings storage
facility and for alternative management of this water.
With the current level of underground water inflows,
in order to maintain the safety of the Żelazny Most
Tailings Storage Facility and consequently mitigate
risks, water discharges are carried out in accordance
with and within the limits of the water rights permits
held.
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(KGHM Group)
4.5. Risk of loss due
to the actions of
external parties
involved in the
purchasing, sales
and investment
process
The KGHM Group is exposed to the risk
of loss resulting from the intentional
actions of external entities, e.g. collusion
on prices, insufficient technical and
economic potential of counterparties,
falsification of documentation, fictional
counterparties, conflicts of interest.
The risk also relates to incorrect
verification of external counterparties
that may result in contracts being
concluded with individuals, entities,
organisations or countries included in
sanction lists.
Supporting the transparency of purchasing, sales and
investment procedures based on counterparty
verification in accordance with the provisions of the
external entities verification procedure. Proactive
monitoring and analysis of processes for loss
prevention, identification of fraud in the organisation
and in the supply chain. Internal control of loss
prevention in KGHM Group entities and prevention of
these phenomena based on the internal control
procedure. Supervision and coordination of tasks
carried out by safety and loss prevention officers,
analysis of processes in terms of identification of
fraud and risks, recommending corrective measures.
On the basis of the regulations in force, the KGHM
Group is obliged to exercise due diligence by, among
others, checking publicly available sanction lists in
terms of the presence of a potential counterparty on
these lists - in accordance with the list of institutions
publishing the lists. Consequently, it is prohibited to:
− cooperate with a person resident in a sanctioned
country/region, or with an entity
registered/established in a sanctioned country or
region, or with an entity whose real beneficiary
and/or owner is directly or indirectly a
person/entity registered/established in a
sanctioned country/region;
− cooperate with an entity/person included in
international sanction lists or with an entity whose
real beneficiary and/or owner directly or indirectly
is an entity or person included in international
sanctions lists.
(KGHM Group)
4.6. Risk of loss of
compliance with the
requirements (law in
force, intra-
corporate
regulations and
voluntarily adopted
legal obligations and
standards).
The KGHM Group operates in volatile
regulatory environments in many
jurisdictions. The consequence of the
necessity to adapt technologically and
organisationally to the changing
regulatory environment (e.g.
environmental requirements, tax
requirements, permissible parameters
of the working environment) may be an
increase in the cost of operations or a
reduction in operations. The risk of
interruptions to operations or the need
to reorganize work due to new
legislation may have a substantial
impact on the operations of the KGHM
Group.
Active cooperation with the academic environment,
which issues opinions on changes to legal acts, and
the on-going providing of positions and opinions with
respect to numerous areas subject to legislative
change (including as part of membership in many
national and international organisations).
Cooperation with renowned law firms and the
creation of specialised organisational units which
monitor the regulatory environment. Taking pre-
emptive actions in order to adapt to organisational,
infrastructural and technological changes. In order to
standardize the approach to ensuring compliance
defined as adherence to the requirements arising
from the applicable external legal acts and internal
regulations or voluntarily assumed legal obligations
and standards (including ethical standards), the
Compliance Management Policy in the KGHM Polska
Miedź S.A. Group and the Compliance Management
Procedure and Methodology in KGHM Polska Miedź
S.A. are in place. A consistent compliance system in
place in the KGHM Polska Miedź S.A. Group is an
element of effective management as part of
corporate governance through, for example, a more
efficient response and readiness for regulatory
changes, care for reputation and ethical culture
creation in the organisation as well as awareness
raising and enhancement of the sense of
responsibility for compliance among employees.
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5. Risk category - Internal Risks in the Risk Model of KGHM Polska Miedź S.A.
Risk
Score
Description
Mitigation
(KGHM Group)
5.1. The risk of
serious accidents or
occupational
diseases caused by
improper workplace
organisation, the
failure to follow
procedures or the
use of improper
protective measures.
The failure to adhere to occupational
health and safety rules and procedures,
as well as the employment of persons
lacking an appropriate psychophysical
predisposition, could be a source of
potential accidents. Exposure to
unfavourable natural conditions
together with associated natural
hazards requires, apart from essential
professional preparation, that
employees possess appropriate
qualifications in terms of health, physical
ability and psychological fitness. Risk is
also associated with the possibility of
temporary production stoppages
caused by serious accidents, which could
potentially affect the operations of the
KGHM Group financially, legally and
image-wise. The KGHM Group is also
exposed to the risk of industrial illnesses
as a consequence of the effect of the
working environment on people.
Enhanced exposure to risk is also related
to external factors in terms of sub-
contractors and their work safety
culture.
A detailed allocation of responsibilities between
management and supervisory staff on the one hand
and entities providing services to the Company on the
other, to ensure safe working conditions and the
proper coordination of work. Systematic discussion of
workplace safety with the participation of
representatives of sub-contractors and mining
oversight authorities. Analysis of the causes of
accidents, drawing conclusions and taking the
necessary possible adaptation measures to avoid a
similar situation in the future. Engaging employees
and sub-contractors in campaigns carried out in the
KGHM Group aimed at improving OHS standards.
Advancement of development initiatives based on the
idea of sustainable development and safety and
enhancing the Group’s image as being socially
responsible under the adopted Strategy. Activities
carried out in line with the self-improvement cycle in
order to continuously seek and prepare for the
implementation of a catalogue of initiatives to further
improve Occupational Health and Safety and meet
the Company's long-term goal of "Zero accidents due
to personal and technical causes, zero occupational
diseases among our employees and contractors". The
Employee Safety Improvement Programme "I think
about the consequences" contains actions in the area
of attitudes, which are enriched with new projects
every year. The result should be achieved by changing
the attitudes and habits of employees with regard to
occupational health and safety, and by improving the
Occupational Health and Safety Management System
to prevent work-related injuries and health problems
of employees and to provide safe and hygienic
workplaces.
Optimisation of healthcare for employees, in
particular following workplace accidents and
systematic searching for new organisational and
technical initiatives to enable the achievement of a
higher level of safety of employees in the Divisions of
KGHM Polska Miedź S.A. Threats are identified and
professional risk is evaluated on a cyclical basis as well
as in accordance with current needs.
KGHM Polska Miedź S.A. 55
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(KGHM Group)
5.2. Risk related to
an ineffective
process of
monitoring and
providing early
warning to
management staff
on deviations from
the budget and
financial plans as
well as with respect
to adopting
inappropriate
parameters related
to economics,
production,
investments,
macroeconomics
and finance, for
forecasts of the
Company results.
An ineffective process of monitoring and
providing early warning to management
staff on deviations from the budget and
financial plans may impede or delay the
appropriate early identification of
deviations in respect of forecasted
results, at the same time shortening the
time for taking appropriate corrective
actions. Sources of risk are linked to
potential ineffectiveness of the
mechanisms controlling these
processes.
In 2024, general uncertainty in the
financial markets related to the armed
conflict in Ukraine was a factor affecting
the risk exposure.
Forecasts related to specific areas of the operations
prepared by appropriate specialised units and
ensuring the uniformity of operating plans with
strategic plans. Regular reporting of execution on
forecasts in all important areas. Regular contacts with
and systematic streamlining of the communication
process together with setting criteria enabling the
identification of symptoms of potential deviations
from the expected results of the KGHM Group.
The assessment of key risks affected by the war in
Ukraine was subjected to particular analysis, through
ongoing monitoring of selected information in the
production, sales, supply chain, personnel
management and finance areas, in order to support
the management processes under the conditions of
increased uncertainty.
(KGHM Group)
5.3. Risk of
unavailability of the
base IT system
causing disruption of
business processes
and cyber threats
The KGHM Group, due to its well-
developed IT structure, is exposed to the
risk of a breach in the confidentiality,
integrity, availability or authenticity of
information assets which have been
collected, stored or processed on IT
resources. The sources of this risk are
both forces of nature (e.g. fires,
construction catastrophes, downpours)
as well as hazards arising from human
activities (intentional or not). The KGHM
Group is exposed to the risk of an
unauthorised loss, change or
destruction of critical data and
information as well as loss of the
possibility of the operational control of
equipment and systems as a result of
cybernetic attacks on the infrastructure
of the KGHM Group. Such incidents
could generate the risk of production
shutdowns, leading to production and
financial losses and claims due to the
loss/disclosure of personal data. This
risk has a large impact on the loss of
reputation of the KGHM Group.
Strict adherence to and application of principles
arising among others from the IT Security Policy and
from Facility Protection Plans. The systematic
evaluation of the risk of loss of the confidentiality,
integrity, availability or authenticity of information
assets which have been collected, stored or
processed on IT resources. Permanent monitoring of
the owned infrastructure in terms of vulnerability and
analysis and planning of implementation of ICT
solutions increasing security, in accordance with
global trends and best practices in this area.
Implementation of security systems and adequate
organisational solutions at various levels of
infrastructure, with the aim of anticipatory reduction
of system vulnerabilities and minimising potential
losses of the KGHM Group.
KGHM Polska Miedź S.A. Performs many investment
activities in terms of increasing the level of cyber-
security of IT/OT systems in the area of, inter alia,
incident investigation, data security. A Security
Operation Center (SOC) department operates, whose
main task is to provide a 24/7 first line of support for
cyber security incidents.
(KGHM Group)
5.4. Risk of failure to
adhere to
established
principles and
standards of conduct
with respect to
counteracting
corruption, business
ethics and with
respect to the
procurement
processes.
The KGHM Group is exposed to the risk
of actions which are harmful to KGHM
taken by external entities participating in
the procurement, sales and investment
processes. Threats take the form of
potential losses by the KGHM Group
resulting from the intentional actions of
external entities, e.g. collusion on prices,
the insufficient technical and economic
potential of counterparties, falsification
of documentation, fictional
counterparties, conflicts of interest.
Other important risk factors include
threats as regards all types of
improprieties related to breaching anti-
corruption and ethical standards (such
as corruption, conflicts of interest,
mobbing, discrimination, illegality,
nepotism) and human rights violations
(such as child labour, forced labour,
modern slavery, women’s rights).
Implementation of the Code of Ethics of the KGHM
Polska Miedź S.A. Group as the main tool in the
corporate culture of the KGHM Group, and other
appropriate policies and procedures ensuring the
efficiency of implemented principles and values.
Application under the Responsible Supply Chain
Policy of guarantees of the selection of responsible
suppliers, especially in the case of acquiring so-called
conflict minerals and ensuring that the goods and
services acquired by the KGHM Group will not be used
to finance terrorism, and that they will be
manufactured or provided while respecting human
rights, labour standards, environmental protection
and counteracting corruption. Proactive monitoring
and analysis of procurement processes in terms of
identifying abuse and threats of corruption within the
organisation and the supply chain, as well as
undertaking actions with respect to ethics and
counteracting corruption along with the
implementation of corrective actions. Internal control
with respect to the identification and detection of
fraud, abuse and corruption in KGHM Group entities
and prevention of such phenomena based on the
Internal Control Procedure in order to eliminate risk
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at the level of prevention. Compliance management
as part of a comprehensive compliance management
system. The KGHM Group implemented the Anti-
Corruption Management System compliant with the
ISO 37001 standard, resulting in the adoption of an
Anti-Corruption Policy and a number of procedures
regulating, inter alia, the principles of handling
business gifts, situations bearing the features of
corruption or conflicts of interest.
Moreover, the KGHM Group has procedures in place
with respect to violation of the law resulting from the
Act of 14 June 2024 on the protection of
whistleblowers in conjunction with the provisions of
Directive (EU) 2019/1937 of the European Parliament
and of the Council of 23 October 2019 on the
protection of persons who report breaches of Union
law.
The "Human Rights Policy at KGHM Polska Miedź S.A.”
is also in place, which supports the regulations and
procedures in force in the Company related to human
rights aspects compliant with the sustainable
development model, such as, for example, the Code
of Ethics, the Code of Conduct, the OHS Policy, the
Climate Policy, the Responsible Supply Chain Policy.
(KGHM Group)
5.5. The risk of
exceeding
project/programme
budgets and
schedules and
deviations from the
scope and assumed
quality. Risk related
to the operational
management and
development of
strategic projects,
taking into account
the issues of
incurred costs,
permits and
infrastructural
requirements.
The KGHM Group is exposed to risk
related to the advancement of projects
and programmes. The risk of changes in
budgets, schedule, scope and deviations
from the expected quality of outputs of
projects and/or programmes is related
to a variety of factors of an internal
nature involving both the methodical
approach and the projected structure of
management and supervision.
Improperly selected tools and
techniques, lack of established criteria
and principles for evaluating projects, or
inconsistency in their application or
adherence to them may restrict or
prevent the achievement of the KGHM
Group’s strategic goals. In terms of
external factors, there remains the
question of meeting legal and formal
requirements which could generate
deviations from the assumed schedule,
and in extreme instances may halt the
advancement of a project/programme.
Improve standards in the management of portfolios
and projects and implement a projects management
system aimed at supporting the organisation in the
planning and management of portfolios and projects.
Standardisation in the scope of planning and
preparation processes and in the advancement of
investment projects, comprising such aspects as
scheduling, preparing costs projections, technical
designing, project review, investment handover
documentation, risk analysis of
projects/programmes. Management of projects in
accordance with international standards and
conducting on-going monitoring of progress. On-
going evaluation of the economic feasibility of current
and future development projects.
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6. Risk category - Climate Risk in the Risk Model of KGHM Polska Miedź S.A.
Risk
Score
Description
Mitigation
(KGHM Group)
6.1. Physical climate
risk related to
negative climate
changes.
The KGHM Group is exposed to climate
risk related to the adverse impact of
factors resulting from specific events, in
particular ones related to rapid (acute)
and chronic weather events resulting
from climate change, such as storms,
floods, fires or heat waves as well as
permanent changes in weather
patterns, which may disrupt the value
chain and the business continuity of the
KGHM Group.
The risk is associated with the changes in
the conditions of running business
activity or disturbances in the operation
of the Core Production Business,
resulting from climate changes and
adaptation to such changes. Permanent
changes in weather patterns as a
consequence of climate change may
also have the effect of making work
more onerous and increasing
operational costs directly related to
business activities.
Development and publication of the KGHM Polska
Miedź S.A. Climate Policy as a guidance document,
which presents the Company’s climate ambitions and
determining the scope of process and organisational
changes needed to achieve them. The main goals and
assumptions of the Climate Policy of KGHM Polska
Miedź S.A. are described in section 4.2.2 [E1] Climate
change.
The implemented and continuously improved risk
management system encompassing also climate risk
management allowing for risk categorisation,
identification, assessment and management as well
as plans for its mitigation.
The implemented and improved compliance
management system encompassing also compliance
risk management with requirements in the climate
area.
Continuation of implementing a climate reporting
system in line with best practices and standards (e.g.
ESRS).
Continuation of implementing changes in key
business and management processes – in particular
those linked to or affecting the Parent Entity’s
reduction of greenhouse gas emissions, through e.g.:
changes in the corporate governance area and
changes in measures, with the goal of introducing an
emission measurement process in the KGHM Group
and the continuation of development and
implementing the measures that can be used to
monitor how the business model’s resilience to
climate change is improving.
Detailed information on climate risk is provided in
section 4.1.1 [ESRS 2] General disclosure of
information.
(KGHM Group)
6.2. Climate risk
arising from
transitioning to a
low-carbon economy
that is resilient to
climate change.
The KGHM Group is exposed to risks
arising from the necessity for the
economy to adapt to gradual climate
changes, in particular by using low-
emission solutions. The transition risk
category includes issues related to legal
requirements, how clients and other
stakeholders perceive climate issues,
technological progress towards a zero-
emission economy, as well as changes in
demand for and supply of certain
products and services whose production
has an adverse impact on climate.
Risks relate to changes in business
conditions due to climate change and
adaptation to these changes in the
context of the observed challenges
faced by the mining and steel industry.
1.5.2 Information on the impact of the war in Ukraine on the operations of the Company and the Group
The situation regarding the war in Ukraine did not have a material, direct impact on the operations of the Company and
the Group in 2024. Detailed information concerning this impact and the related risks is presented in Notes 1.2.2 of the
financial statements and 1.3.2. of the consolidated financial statements.
1.5.3 Impact of risks associated with operations in other countries
Details of this impact of risks associated with operations in other countries are presented in note 1.3.4 of the consolidated
financial statements.
KGHM Polska Miedź S.A. 58
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Translation from the original Polish version
1.5.4 Market, credit and liquidity risks
The goal of market, credit and liquidity risk management in the KGHM Polska Miedź S.A. Group is to restrict the undesired
impact of financial factors on cash flow and results in the short and medium terms and to enhance the Group’s value over
the long term. The management of risk includes both the elements of risk identification and measurement as well as its
restriction to acceptable levels. The process of risk management is supported by an appropriate policy, organisational
structure and applied procedures. In the Parent Entity these issues are covered in the following documents:
− Market Risk Management Policy and the Rules of the Market Risk Committee,
− Credit Risk Management Policy and the Rules of the Credit Risk Committee,
− Financial Liquidity Management Policy and the Rules of the Financial Liquidity Committee,
− Rules of purchase and price hedging of electricity, gaseous fuel, CO
2
emission allowances, property rights, guarantees
of origin and the Rules of the Energy Committee.
The “Market Risk Management Policy in the KGHM Polska Miedź S.A. Group” relates to selected production companies of
the Group (KGHM Polska Miedź S.A., KGHM INTERNATIONAL LTD., FNX Mining Company Inc., Robinson Nevada Mining
Company).
Management of financial liquidity is conducted in accordance with the “Financial Liquidity Management Policy in the KGHM
Group”. The Policy regulates the processes implemented by individual companies, while their organisation and coordination
as well as the supervision thereof is performed in the Parent Entity.
Credit risk management in the Parent Entity is carried out in accordance with the Management Board approved “Credit Risk
Management Policy”. The Parent Entity serves as an advisor to the Group’s companies with respect to managing credit risk.
The Policy applies to selected Group companies and its goal is to introduce a comprehensive, joint approach and the most
important elements of the credit risk management process.
Market Risk Management
Market risk is understood as the possible negative impact on the Group’s results arising from changes in the market prices
of metals and other commodities (including energy and energy carriers), exchange rates and interest rates, as well as from
changes in the value of debt securities and share prices of listed companies.
In terms of market risk management (in particular the risk of changes in metals prices and exchange rates) of greatest
significance and impact on the results of the Group are the scale and nature of the activities of the Parent Entity and the
mining companies of KGHM INTERNATIONAL LTD.
The Parent Entity actively manages market risk, undertaking actions and decisions in this regard within the context of the
global exposure throughout the KGHM Polska Miedź S.A. Group.
The Management Board is responsible for market risk management in the Parent Entity and for adherence to policy in this
regard. The main body involved in performing market risk management is the Market Risk Committee, which makes
recommendations to the Management Board in this area.
Table 13. Risk category – Market, in the Risk Model of the KGHM Polska Miedź S.A. Group
Commodity risk,
currency risk
In 2024, the Group was mainly exposed to the risk of the changes in the prices of metals it sells: copper and silver.
Of major significance for the Parent Entity was the risk of changes in exchange rates, in particular the USD/PLN
exchange rate. The Group’s companies are additionally exposed to the risk of volatility in the prices of other metals.
Market risk related to changes in metals prices arises from the formula for setting prices in physical metals sales
contracts, which are usually based on the average monthly market prices for the relevant future month.
In accordance with the Market Risk Management Policy, in 2024 the Parent Entity continuously identified and
measured market risk related to changes in metals prices, exchange rates and interest rates (analysis of the impact
of market risk factors on the Parent Entity’s activities – profit or loss, balance sheet, statement of cash flows), and
also analysed the metals, currencies and interest rates markets. These analyses, along with assessment of the
internal situation of the Parent Entity and the Group, represented the basis for taking decisions on the application
of hedging strategies on the metals, currency and interest rates markets.
Detailed disclosures regarding the management of the risk of changes in metal prices and exchange rates in 2024
in the Parent Entity and in the Group are presented in Notes 7.5.1.2 and 7.5.1.3 of the financial statements and the
consolidated financial statements.
Interest rate risk
Interest rate risk is the possibility of the negative impact of changes in interest rates on the Group’s position and
results. In 2024, the Group was exposed to such risk due to loans granted, cash depositing, the reverse factoring
program and borrowings.
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Detailed disclosure concerning the balances of the Parent Entity and Group exposed to interest rate risk as at
31 December 2024 is presented in notes 7.5.1.4 of the financial statements and the consolidated financial
statements.
In 2024, the Group used financial instruments based on SOFR, CME TERM SOFR and EURIBOR (foreign currency
instruments) and WIBOR (PLN instruments).
The Steering Committee of the National Working Group on benchmark reform established in connection with the
reform of benchmarks in Poland, selected a benchmark to replace WIBOR in December 2024. The decision was
taken to select an index proposal from the WIRF family, based on the deposits of unsecured credit institutions and
financial institutions and on 24 January 2025 it was announced that the target name POLSTR (Polish Short Term
Rate) for the index proposal had been selected. The planned changes are due to come into force in 2027.
Until 2027, the IBOR reform will not have an impact on the interest rate applied in the Group’s derivatives, because
the CIRS transactions entered into (open cross currency interest rate swaps) and bonds issued by the Parent Entity
are based on the WIBOR reference rate. In the case of this benchmark, until 2027 we are in the transitional period,
during which adjustments to transactions entered into before the reform will not be required. After 2027, the IBOR
reform may affect hedging of cash flows of variable interest on bonds issued (Tranche B) in the amount of PLN 1.6
billion, based on WIBOR 6M, i.e. for CIRS (cross-currency interest rate swap) transactions maturing in 2029. The
Group has applied temporary exemptions from the specific hedge accounting requirements under IFRS 9 in
connection with the IBOR reform and has assumed that it can continue hedging relationships.
Detailed disclosure on the impact of the IBOR reform on the Group’s financial instruments may be found in Note
7.5.1.4 of the consolidated financial statements.
Result on
derivatives and
hedging
transactions
The total impact of derivatives and hedging instruments (transactions on the copper, silver, currency and interest
rate markets as well as embedded derivatives and USD-denominated loans designated as a hedge against a change
in the exchange rate) on the Group’s profit or loss for 2024 amounted to PLN 647 million, of which:
− PLN 608 million increased revenues from contracts with customers,
− PLN 51 million increased the result on other operating activities,
− PLN 12 million decreased the result on financing activities.
Moreover, in 2024, gain on the settlement of an instrument hedging the interest rate of bonds (CIRS) in the amount
of PLN 70 million was reclassified to non-current assets. On the other hand, other comprehensive income was
decreased by PLN 550 million (impact of hedging instruments; a decrease from PLN 628 million to PLN 78 million).
As at 31 December 2024, the fair value of open transactions in derivatives of the Group (on the metals, currency
and interest rate markets and in embedded derivatives) amounted to PLN 192 million.
Risk of volatility
in prices of
energy and
energy carriers
In the scope of management of market risk arising from changes in energy and energy carriers, the scale and profile
of operations of the Parent Entity have the greatest significance and impact on the results of the KGHM Polska
Miedź S.A. Group. It represents the commodity risk for the Parent Entity, which is measured based on its impact on
cash flows.
Commodity price risk management for planned purchases of electricity and gaseous fuel involves managing the
exposure to the risk of changes in the price of electricity and gaseous fuel over a time horizon of up to 36
consecutive months resulting from energy and gas purchase plans, less previously concluded purchase contracts
with delivery in future periods.
Detailed disclosures regarding the risk of changes in energy and energy carrier prices in 2024 in the Parent Entity
are presented in notes 7.5.1.5 of the financial statements and the consolidated financial statements.
Price risk related
to the change in
share prices of
listed companies
Price risk related to the shares of listed companies held by the Group is understood as the change in their fair value
due to changes in their quoted share prices.
As at 31 December 2024, the carrying amount of shares of companies listed on the Warsaw Stock Exchange and
on the TSX Venture Exchange amounted to PLN 705 million.
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Credit risk management
Credit risk is defined as the risk that counterparties will not be able to meet their liabilities.
The Management Board is responsible for credit risk management in the Parent Entity and for compliance with policy in
this regard. The main body involved in actions in this area is the Credit Risk Committee.
In 2024, the KGHM Polska Miedź S.A. Group was exposed to this risk, mainly in four areas:
Table 14. Areas of credit risk in the Risk Model of the KGHM Polska Miedź S.A. Group
Credit risk
related to trade
receivables
To reduce the risk of insolvency by its customers, the Parent Entity has a receivables insurance contract, which
covers receivables from entities with buyer’s credit which have not provided strong collateral or have provided
collateral which does not cover the total amount of the receivables. Taking into account the collaterals held and
the credit limits granted by the insurance company, as at 31 December 2024 the Parent Entity had secured 80% of
its trade receivables (as at 31 December 2023, 56%).
Detailed disclosures regarding credit risk management related to trade receivables in 2024 are presented in notes
7.5.2.3 of the financial statements and the consolidated financial statements.
Credit risk
related to cash
and cash
equivalents and
bank deposits
The Group allocates periodically free cash in accordance with the requirements to maintain financial liquidity and
limit risk and in order to protect capital and maximise interest income.
Credit risk related to deposit transactions is continuously monitored by the on-going review of the credit ratings of
those financial institutions with which the Group cooperates, and by limitation of the level of concentration in
individual institutions. As at 31 December 2024, the maximum share of a single entity in terms of credit risk arising
from funds of the Group deposited in financial institutions amounted to 29% (as at 31 December 2023, 35%).
Credit risk
related to
derivatives
transactions
All of the entities with which the Group enters into derivative transactions (with the exception of embedded
derivatives) operate in the financial sector. These are mainly financial institutions, with a medium-high rating.
According to the fair value as at 31 December 2024, the maximum share of a single entity with respect to credit risk
arising from open derivative transactions entered into by the Group and from net receivables due to settled
derivatives amounted to 29% (as at 31 December 2023, 24%). Due to diversification of risk in terms both of the
nature of individual entities and of their geographical location, as well as taking into consideration the ongoing
monitoring of the rating of financial institutions with which it cooperates, the Group is not materially exposed to
credit risk as a result of derivative transactions entered into.
Credit risk
related to loans
granted
As at 31 December 2024, the balance of loans granted by the Parent Entity amounted to PLN 9 973 million. The
most important items are long-term loans in the total amount of PLN 9 657 million granted to the Company Future
1 sp. z o.o. and to the KGHM INTERNATIONAL LTD. Group. Detailed information on the loans granted by KGHM
Polska Miedź S.A. is presented in note 6.2 of the financial statements.
As at 31 December 2024, the balance of loans granted by the Group amounted to PLN 9 821 million. The most
important of these are short-term and long-term loans in the total amount of PLN 9 800 million, or USD 2 390
million, granted by the KGHM INTERNATIONAL LTD. Group for the financing of a mining joint venture in Chile.
The loans granted in connection with the financing of a mining joint venture in Chile are subordinated to liabilities
due to a credit facility in the amount of up to USD 500 million received by Sierra Gorda S.C.M. from the syndicate
of banks. In order to guarantee the subordinating of owner loans to the debt granted by the syndicate of banks, a
Subordination Agreement was concluded. Under this Agreement, a possibility exists to repay the owner loans by
the joint venture Sierra Gorda S.C.M., which is contingent on the acceptance of the syndicate of banks following the
fulfilment of parameters strictly-defined in the Subordination Agreement.
Credit risk related to the loans granted to the joint venture Sierra Gorda S.C.M. is dependent on the risk related to
mine project advancement and is assessed by the Management Board of the Parent Entity as moderate.
KGHM Polska Miedź S.A. 61
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Translation from the original Polish version
Management of financial liquidity risk
The management of capital in the Group aims at securing funds for development and at securing an adequate level of
liquidity.
Table 15. Risk category – Liquidity risk in the Risk Model of the KGHM Polska Miedź S.A. Group
Financial liquidity
management
Management of the Group’s liquidity is conducted in accordance with the “Financial Liquidity Management Policy
in the KGHM Group”. This document describes the process of financial liquidity management in the Group, which
is realised by the Group’s companies, while the organisation and coordination as well as the supervision thereof
is performed in the Parent Entity.
The basic principles resulting from this document are:
− the need to ensure stable and effective financing for the Group’s operations,
− constant monitoring of the Group’s level of debt, and
− effective management of working capital.
Detailed information regarding available sources of financing and their utilisation in 2024 is included in section
2.4.2 Sources of financing in the Group of this Report.
The available sources of financing fully cover the liquidity needs of the Group. The status of the Group’s liabilities
due to borrowings and bonds issued as at 31 December 2024 amounted to PLN 5 438 million.
1.6 OTHER INFORMATION
1.6.1 Shareholders and the Capital Market
Shareholding structure of KGHM Polska Miedź S.A.
As at 31 December 2024 and as at the date of signing of this report, the share capital of the Company, in accordance with
the entry in the National Court Register, amounted to PLN 2 000 million and was divided into 200 000 000 shares, series A,
fully paid, with a face value of PLN 10 per share. All shares are bearer shares. The Company has not issued any preference
shares. Each share grants the right to one vote at the general meeting. The Company does not hold any treasury shares.
In the years ended on 31 December 2024 and 31 December 2023, there was no change in either registered share capital or
in the number of shares issued.
In 2024, no changes in the ownership of significant blocks of shares in KGHM Polska Miedź S.A. took place.
The shareholder structure of the Company as at 31 December 2024 and as at the date of signing this report, established
on the basis of notifications received by the Company pursuant to article 69 of the Act on public offerings and conditions
governing the introduction of financial instruments to organised trading, and on public companies, was as follows:
Table 16. Shareholder structure of the Company as at 31 December 2024 and as at the date of signing of this report
shareholder
number of shares/
number of votes
total nominal value of
shares (PLN)
interest in the share
capital/total number of
votes
State Treasury
24
63 589 900
635 899 000
31.79%
Allianz Polska Otwarty Fundusz Emerytalny
25
11 961 453
119 614 530
5.98%
Nationale-Nederlanden Otwarty Fundusz Emerytalny
26
10 104 354
101 043 540
5.05%
Other shareholders
114 344 293
1 143 442 930
57.18%
Total
200 000 000
2 000 000 000
100.00%
Other shareholders, whose combined interest in the share capital and in the total number of votes amounts to 57.18%, are
mainly institutional investors, both international and domestic. Following is the geographic distribution of the shareholder
structure of KGHM Polska Miedź S.A. The data is based on research into the Company’s shareholder structure performed
in February 2025.
24
based on a notification received by the Company dated 12 January 2010
25
based on a notification received by the Company dated 16 May 2023
26
based on a notification received by the Company dated 18 August 2016
KGHM Polska Miedź S.A. 62
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Translation from the original Polish version
Chart 9. Geographic shareholder structure
The Management Board of the Company is not aware of any agreements entered into by shareholders and bondholders
which may result in future changes in the proportions of the Company shares and bonds held by current shareholders and
bondholders.
Based on the information held by KGHM Polska Miedź S.A., as at 31 December 2024 and as at the date this report was
signed, none of the Members of the Management Board or the Supervisory Board of the Company held shares of KGHM
Polska Miedź S.A. or rights to them.
Based on information held by KGHM Polska Miedź S.A., as at 31 December 2024 and as at the date this report was signed,
neither the Members of the Management Board nor of the Supervisory Board of the Company held shares of related entities
of KGHM Polska Miedź S.A.
In 2024, the Company did not have an employee share incentive program.
All Company shares are ordinary shares.
Bonds of KGHM Polska Miedź S.A. on the Catalyst market
On 27 May 2019, an issuance agreement was signed under which the Management Board of KGHM Polska Miedź S.A.
established a bond issuance program of up to PLN 4 billion. The parties to the Issuance Agreement included KGHM Polska
Miedź S.A. as the Issuer, and Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna, Bank Handlowy w Warszawie
Spółka Akcyjna, Bank Polska Kasa Opieki Spółka Akcyjna and Santander Bank Polska Spółka Akcyjna as the Organisers and
Dealers. Detailed information on conditions of the issuance program may be found in section 1.6.2 Significant contracts for
the Company and Group.
Issuance took place in June 2019 and the maximum total nominal value of the bonds was PLN 2 billion.
Series A Bonds and Series B Bonds were issued under the Bond Issuance Program. The bonds offering took place through
a private placement and was addressed to no more than 149 investors and applied only to the territory of Poland.
On 20 September 2019, series A and B bearer bonds of KGHM Polska Miedź S.A. were introduced to the alternative trading
system on Catalyst by a resolution of the Management Board of the Warsaw Stock Exchange. The date of the first listing of
the bonds in the ATS was scheduled on 3 October 2019.
In order to carry out the process of refinancing 5-year series A bonds with the redemption date of 27 June 2024, an issuance
agreement was signed on 29 May 2024, under which the Management Board of KGHM Polska Miedź S.A. established a
bond issuance program up to the amount of PLN 4 billion. The parties to the Issuance Agreement included KGHM Polska
Miedź S.A. as the Issuer, and Powszechna Kasa Oszczędności Bank Polski S.A., Bank Polska Kasa Opieki S.A. and Santander
Bank Polska S.A. as the Organisers and Dealers.
The issuance took place in June 2024, the maximum total nominal value of the bonds was PLN 1 billion. Series C Bonds
were issued under the Bond Issuance Program. The issuance of the bonds took place pursuant to Article 33 point 1) in
conjunction with Article 34 section 2 of the Bond Act of 15 January 2015, i.e. through a public offering of securities which,
in accordance with the law, does not require the release of a prospectus or information memorandum, while the offers to
purchase the bonds were addressed to qualified investors.
On 22 August 2024, series C bearer bonds of KGHM Polska Miedź S.A. were introduced to the alternative trading system on
Catalyst by a resolution of the Management Board of the Warsaw Stock Exchange. The date of the first listing of the bonds
in the ATS was scheduled on 16 September 2024.
Detailed information is available on the Company’s website.
KGHM Polska Miedź S.A. on the Warsaw Stock Exchange
KGHM Polska Miedź S.A. debuted on the Warsaw Stock Exchange (WSE) in July 1997. The Company’s shares are traded on
the primary market of the WSE in the continuous trading system and are a component of the WIG, WIG20 and WIG30 main
Poland
63%
USA
13%
Great Britain
7%
Unidentified
9%
Other
7%
Other
37%
KGHM Polska Miedź S.A. 63
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Translation from the original Polish version
indices as well as the WIG-ESG index published since 3 September 2019, comprising listed companies which adhere to the
principles of corporate social responsibility.
KGHM Polska Miedź S.A. is also a component of the sector index WIG-Mining and is a component company of the prestigious
FTSE4Good Index Series. The FTSE4Good Index Series is part of the group of ethical investment indicators, reflecting criteria
of corporate social responsibility and ESG risk management.
In 2024, the share price of KGHM Polska Miedź S.A. fell by 6.3% and amounted to PLN 115.00 at the close of trading on
30 December 2024. In the same period, the price of copper - the Company's main product - increased by 4.2%, with the
average USD/PLN exchange rate increase by 4.1%. At the same time, some of the WSE main indices were as follows:
WIG rose by 1.4%, while WIG20 and WIG30 fell by 6.4% and 3.5%, respectively. However, the FTSE 350 mining index which
includes companies in the mining sector listed on the London Stock Exchange, increased by 0.4%.
The Company's shares reached an annual maximum closing price of PLN 170.00 on 20 May 2024. The minimum closing
price was recorded on 22 January 2024 - the closing price then stood at PLN 105.75.
Chart 10. Percentage change in the share price of KGHM Polska Miedź S.A. versus the WIG index and FTSE 350 mining
indices (compared to the price from the last WSE trading day in 2023)
The table below presents key share price data of KGHM Polska Miedź S.A. on the WSE in 2023-2024:
Table 17. Key share price data of the Company on the WSE,
Source: KGHM, WSE Statistic Bulletin for 2023 and 2024, Bloomberg
Symbol: KGH
ISIN: PLKGHM000017
Unit
2024
2023
Number of shares
million
200
200
Market capitalisation of the Company at year’s end
PLN billion
23.0
24.5
Average trading volume per session
shares
696 305
591 229
Turnover
PLN million
23 232.25
17 762.24
Change in share price from the end of the prior year
%
-6.3
-3.2
Highest closing price during the year
PLN
170.00
153.80
Lowest closing price during the year
PLN
105.75
104.60
Closing price from the last day of trading in the year
PLN
115.00
122.70
Dividend policy and payout of dividend
On 26 January 2015, the Management Board of the Company adopted the Dividend Policy of KGHM Polska Miedź S.A., which
is an element of ensuring a balance between the amount of dividends paid and the ability of effective investment of the
funds earned by the Company.
The policy assumes that the Management Board recommends dividend payout of up to one-third of the net profit
generated in the previous financial year, taking into account the current and expected financial position of the Company
and the Group. In particular, in its recommendation, the Management Board takes into account the Company's anticipated
requirements for capital to advance the development programme and the Group's safe level of debt. The final decision on
the amount of the dividends paid is made by the General Meeting of KGHM Polska Miedź S.A.
In accordance with Resolution No. 7/2024 of the Ordinary General Meeting of KGHM Polska Miedź S.A. dated 7 June 2024
regarding the payment of a dividend from profits for previous years as well as setting of the dividend date and the dividend
payment date, it was resolved to pay the dividend to shareholders for 2023 in the amount of PLN 300 million (PLN 1.50 per
share) from the Company's profits for previous years. The Ordinary General Meeting of KGHM Polska Miedź S.A. determined
the dividend date on 28 June 2024 and the dividend payment date on 16 July 2024.
-30%
-20%
-10%
0%
10%
20%
30%
40%
12/23 01/24 02/24 03/24 04/24 05/24 06/24 07/24 08/24 09/24 10/24 11/24 12/24
KGHM
-6.3%
WIG
+1.4%
FTSE
mining
+0.4%
KGHM Polska Miedź S.A. 64
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Investor relations
The Investor Relations team, on behalf of the Management Board of KGHM Polska Miedź S.A., maintains an open dialogue
with capital market participants pursuant to the transparency policy of the company and the principles of the Best Practice
for GPW Listed Companies 2021.
For KGHM Polska Miedź S.A., as a global company operating on four continents, it is a priority to ensure equal access to
information to all members of the international capital markets. Ongoing communication activities are aimed at
strengthening activity towards capital market participants. They ensure continuous communication and transparent
dialogue with analysts, institutional and individual investors, as well as the fulfilment of information obligations under the
applicable law.
2024 was another year of intensive efforts undertaken by the Company in the scope of communication with investors,
including:
Investor conferences
in Poland and
abroad
Representatives of the Company actively met with investors and analysts in Poland and abroad during
conferences organised by brokers. In 2024, the Company took part in investor conferences and in more than 100
meetings with portfolio managers and analysts representing investment and pension funds as well as other asset
management firms. Participation in investor conferences took place both onsite and via electronic means of
communication.
Result conferences
The Investor Relations Department organised meetings for the capital market with the participation of the
Management Board to discuss the financial results of the Company and the KGHM Group. In 2024, the publication
of financial results was accompanied by results conferences open to all stakeholders via live webcasts in Polish
and English, with the possibility of submitting questions by email. Video recordings of these conferences are
available on the Company’s website.
Fireside chat
The Company communicated with institutional investors via fireside chat. With the assistance of the presenter
(usually a representative of the Brokerage House), analysts, fund representatives and investors held a question
and answer session. Approximately 30 investment fund representatives were interviewed as part of the initiative.
Capital Markets Day
The Investor Relations Department periodically organises events for the capital market called Capital Markets
Day. In November 2024, the Company organised the Individual Investor Day in cooperation with the Association
of Individual Investors. The event included a visit by individual investors to the Company Divisions and a meeting
with management at KGHM Head Office. Materials from the event are posted on the corporate website, under
the Investors tab.
WallStreet
conference
In 2024, representatives of KGHM Polska Miedź S.A. once again took part in the WallStreet Conference - the largest
meeting of investors and entrepreneurs in Poland and Central Europe. KGHM's activity involved the participation
of the Vice President of the Management Board (Finance) in the panel and an opportunity for individual investors
to meet and talk to KGHM Investor Relations Team.
Successful Investor
Conference
In 2024, KGHM representatives took part in two editions of the Effective Investor Zone conference. The events
are dedicated to stock market investors who invest primarily on the basis of fundamental analysis. As part of the
event, a KGHM representative conducted a substantive workshop and participated in educational lectures and
meetings with representatives of companies.
Capital market
events
In 2024, the Company participated in events organised by major capital market institutions dedicated to
deepening investors’ knowledge. Representatives of the Company attended the IDM conference: Conference of
the Chamber of Brokerage Houses and the event of the Association of Stock Exchange Issuers: Investor Relations
Congress.
Investor chats
Representatives of the Company participated in online investor chats organised for individual investors
periodically after the publication of financial results. In 2024, four investor chats were held.
ESG
KGHM Polska Miedź S.A. has been conducting communication activities related to ESG (environmental, social and
corporate governance) areas, addressed to capital market participants, investors, rating agencies and other
institutions and stakeholders. In accordance with the current Strategy, the KGHM Group consistently strives to
achieve an increase in stakeholder value, guided by the principles of sustainable development and safety.
The Company actively participates in processes to improve its operations, drawing on the best practices of listed
companies, and adjusts its sustainability communication activities to stakeholder expectations.
KGHM's main communication channels in the scope of ESG include the website, in particular, the "Sustainability"
tab and a sub-site dedicated to ESG, which contains, among others, a set of KGHM’s Policies and Codes in force,
information on measurement of the environmental and carbon footprint of products, as well as data related to
the achievement of Sustainability goals in accordance with the ESRS standards.
Representatives of the Company regularly participate in meetings with investment funds, customers and
institutions, focusing on key issues for stakeholders, including topics related to sustainability and environmental
activities. As a result of ongoing activities, in 2024 all three metallurgical plants located in Poland obtained and
maintained the prestigious Copper Mark certificate, confirming responsible copper production.
Within the Company's organisational structure, the ESG Department and the Sustainability Council have been
established to ensure the Company's sustainable development through the integration of environmental, social
and corporate governance issues into business strategy and operations, and to advise on the direction of
individual ESG goals.
KGHM Polska Miedź S.A. 65
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Translation from the original Polish version
In 2024, KGHM’s shares represented a component of the FTSE4Good Index Series and the WIG-ESG indexes
(according to the published WSE Benchmark information, the publication of the WIG-ESG index ceased on 1 July
2024). The Company's rating is also assigned by the Sustainalytics agency and MSCI.
In order to strive towards utmost diligence, transparency and compliance with the capital market best practices,
the Company regularly responds to surveys, questionnaires and ESG queries addressed, among others, by
Sustainalytics, FTSE Russell, MSCI, WOOD, Refinitiv, Vigeo Eiris.
IR Newsletter
The initiative related to publication and distribution of the Newsletter for Investors was continued, which
summarises the most important quarterly events and is distributed to subscribers via email. The goal of the IR
Newsletter is to provide its recipients with an accurate source of knowledge about KGHM and the global copper
market and to facilitate analysis and assessment of the possibilities associated with investing in the Company’s
shares.
Investor relations
tab - Investors on
the corporate
website
The investor relations tab on the Company's corporate website is continuously updated with information and
documents, including regulatory filings and periodic reports, information on shareholder structure, documents
related to general meetings, corporate governance, as well as presentations and videos for investors.
KGHM IR profile on
LinkedIn
The Company maintains a dedicated KGHM Investor Relations profile for investors and analysts, available on the
LinkedIn social media platform. On this profile, the Investor Relations Department publishes the latest
information that may be of interest to capital market participants.
IR Release
The IR Release is a communication tool that provides information for investors and analysts on important events
for the Company and Group. The IR Release is distributed after each disclosure of financial results in an electronic
form and is also available to all stakeholders on the Company’s corporate website.
In 2024, analytical reports concerning KGHM Polska Miedź S.A. were prepared by 9 "sell-side" analysts from Poland and 6
from abroad.
Table 18. List of brokerage houses preparing analytical reports on KGHM Polska Miedź S.A.
Poland
Biuro Maklerskie mBanku
Dom Maklerski BOŚ
Santander Biuro Maklerskie
Dom Maklerski Banku Handlowego
Erste Group
IPOPEMA Securities
Biuro Maklerskie PKO BP
Trigon Dom Maklerski
Biuro Maklerskie Pekao
Abroad
Bank of America Merrill Lynch
JP Morgan
Morgan Stanley
Global Mining Research
UBS
EVA Dimensions
Awards and prizes in 2024 for activities related to communication with investors and presence on the capital
market:
The Best of The Best - KGHM was once again a winner in the competition organised by the Institute of Accounting and Taxes
- The Best Annual Report, which promotes companies that maintain a high level of reporting quality and communication
with the market. KGHM Polska Miedź S.A. was awarded the "The Best of The Best" statuette, receiving the highest score
among the surveyed companies for the 2023 consolidated annual report.
KGHM Polska Miedź S.A. 66
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
1.6.2 Significant contracts for the Company and Group
Table 19. Significant contracts for the Company and Group
Unsecured
revolving credit
agreement with
Bank
Gospodarstwa
Krajowego
On 23 February 2024, a USD 450 million unsecured revolving credit agreement was concluded with Bank
Gospodarstwa Krajowego for a financing period of up to 60 months, with the option to extend for a further 24
months (hereinafter referred to as the “Agreement”). During the credit’s availability period, i.e. 36 months from
the date of signing of the Agreement, the credit shall be a renewable credit line (each repayment renews the
available credit limit) and, beginning from the first day following the day falling 36 months from the date of signing
of the Agreement, the credit shall be converted into a non-renewable loan repayable in four equal semi-annual
principal instalments (unless it is extended under the conditions described below). Each repayment of the
principal instalment will reduce the amount of the credit until it is repaid in full.
In addition, the credit includes two extension options in the form of a revolving credit line:
− the 1st option to extend for a further 24 months submitted at the Company's request after 30 months,
− the 2nd option to extend for a further 24 months submitted at the Company's request after 54 months.
In accordance with the terms of the Agreement, the credit can be drawn in USD. The funds acquired from the
credit will be used to finance general corporate purposes. The interest rate on the credit was set at the base rate
of SOFR plus a margin depending on the level of the net debt/EBITDA financial ratio. The other terms of the credit
are in line with the standard terms and conditions for this type of transactions.
This Agreement supersedes the credit agreement with Bank Gospodarstwa Krajowego from 2019, which was
announced by the Company in regulatory filing no. 7/2019 dated 25 February 2019.
Bond issuance
program
agreement
On 29 May 2024, an issuance agreement was concluded, pursuant to which the bond issuance program of up to
PLN 4 billion (the "Programme") will be established.
The parties to this Agreement include KGHM Polska Miedź S.A. as the Issuer, and Powszechna Kasa Oszczędności
Bank Polski Spółka Akcyjna, Bank Polska Kasa Opieki Spółka Akcyjna and Santander Bank Polska Spółka Akcyjna
as the Organisers and Dealers.
Pursuant to the aforementioned Agreement and based on the results of the book-building process completed
on 14 June 2024, the Management Board adopted a resolution on issuance of C series bonds on the Polish market
as part of the Bond Issuance Program up to the maximum amount of PLN 4 billion on the following terms and
conditions:
− The total nominal value of the Bonds issued: PLN 1 billion.
− Nominal value per Bond: PLN 1 000.
− Issuance price per Bond: equal to the nominal value of the bond.
− Issuance date: 26 June 2024.
− Bond Redemption date : 26 June 2031.
− Bonds interest rate : WIBOR 6M+Margin in the amount of 125 b.p. p.a.
− The bonds are unsecured ordinary bearer bonds.
− The Bonds will be registered in the securities depository maintained by Krajowy Depozyt Papierów
Wartościowych S.A. (National Depository for Securities) and will be introduced to trading in the Catalyst
Alternative Trading System no later than 31 August 2024.
− the purpose of the issuance, within the meaning of Article 32 sec. 1 of the Bond Act of 15 January 2015, has
not been determined.
Agreement for the
corporate
guarantee to
secure Sierra Gorda
S.C.M.'s liabilities.
On 16 September 2024, a corporate guarantee agreement was concluded to secure Sierra Gorda S.C.M.'s
liabilities. (between: Sierra Gorda S.C.M. (The "Borrower"), KGHM Polska Miedź S.A. ("KGHM") and South32 Limited
("South32", together with KGHM, the "Guarantors" and each individually referred to as a "Guarantor"), towards
Scotiabank Chile (as the "Administrative Agent"), for its benefit and that of the Lenders.
The collateral under the guarantee amounts to a maximum of USD 500 million, of which KGHM Polska Miedź S.A.
secures 55% (in proportion to its share in Sierra Gorda S.C.M. and Sierra Gorda S.C.M.'s current debt towards the
bank, up to the amount of USD 275 million (i.e. PLN 1 067 million according to the average NBP exchange rate as
at 10 September 2024) plus administrative costs.
Sierra Gorda S.C.M.
revolving credit
agreement with a
syndicate of banks
On 16 September 2024, Sierra Gorda S.C.M. concluded a revolving credit agreement with a syndicate of banks to
refinance its debt with Bank Gospodarstwa Krajowego. The Revolving Credit Agreement amounts to
USD 500 million for 100% of the shares, of which USD 400 million has been used to refinance Sierra Gorda S.C.M.'s
debt towards BGK and USD 100 million is used to secure the current liquidity needs of Sierra Gorda S.C.M.
1.6.3 Information about suppliers / customers whose share exceeds 10% of total revenues
The only entity whose turnover with the Parent Entity exceeded 10% of the sales revenues of KGHM Polska Miedź S.A. in
2024 was KGHM Metraco S.A. (value of purchases: gross amount of PLN 6 654 million).
The copper smelters and refineries of KGHM Polska Miedź S.A. produce electrolytic copper from their own concentrates as
well as from purchased copper-bearing material (concentrates, copper scrap and blister copper). In 2024, the production
of electrolytic copper from purchased copper-bearing materials amounted to 205.0 thousand tonnes, which represented
35% of total electrolytic copper production.
KGHM Polska Miedź S.A. 67
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
This production mostly came from copper scrap (158.6 thousand tonnes of copper, 27% of total electrolytic copper
production), which is supplied metallurgical plants of KGHM Polska Miedź S.A. by KGHM Metraco S.A. - a 100% subsidiary
of the Parent Entity.
KGHM Metraco S.A., due to its specialisation and familiarity with the scrap market, as well as to its equity relationship with
KGHM Polska Miedź S.A., supplies scrap to the metallurgical plants of KGHM based on exclusivity and as a result revenues
from sales of this company to KGHM Polska Miedź S.A. are significant and represent 22% of KGHM Polska Miedź S.A.’s sales
revenue and 19% of sales revenue of the Group.
1.6.4 Information on transactions entered into between related parties, under other than arm’s length
conditions
In 2024, neither the Parent Entity nor its subsidiaries entered into related party transactions under other than arm’s length
conditions.
1.6.5 Litigation and claims
Table 20. Material proceedings pending before courts, arbitration bodies or public administration bodies
Proceedings
regarding
royalties for use
of invention
project no.
1/97/KGHM
“Method for
increasing the
production
capacity of the
electrorefining
sections of the
Metallurgical
Plants”
In the claim dated 26 September 2007, the Plaintiffs (14 natural persons) filed a claim against KGHM Polska Miedź
S.A. with the Regional Court in Legnica for the payment of royalties for the use by the Company of invention project
no. 1/97/KGHM called „Sposób zwiększenia zdolności produkcyjnej wydziałów elektrorafinacji Huty Miedzi” (Method
for increasing the production capacity of the electrorefining sections of the Metallurgical Plants) (the “Project”) for
the 8th calculation period (2006). The amount of the claim (principal amount ) was determined by the Plaintiffs in
the statement of claim in the amount of approximately PLN 42 million (principal amount excluding claimed interest
and court costs). In its response to the statement of claim of 21 January 2008, the Company requested that the claim
be dismissed in its entirety and filed a counterclaim for the reimbursement of unduly paid remuneration for the
sixth and seventh years of application of the Project (2004 and 2005), also raising a possible plea of set-off of the
mutually asserted claims. The amount of the claim (principal amount excluding claimed interest and court costs) in
the counterclaim was determined by the Company in the amount of approximately PLN 25 million.
In the judgement of 25 September 2018, the Regional Court in Legnica dismissed the counterclaim and partially
upheld the principal claim to the total amount of approx. PLN 24 million, and at the same time ordered the payment
of interest in the amount of approx. PLN 30 million, totalling to approx. PLN 54 million. Both parties to the
proceedings appealed against this judgement.
In the judgement of 12 June 2019, the Court of Appeals in Wrocław dismissed the appeals of both parties, changing
the judgement of the court of first instance only with regard to the decision on the costs of the main action, charging
them to the Company. KGHM Polska Miedź S.A. filed a cassation appeal against the judgement of the court of second
instance, i.e. with respect to the partially upheld principal claim in the amount of approx. PLN 24 million as well as
with respect to the dismissed counterclaim in the amount of approx. PLN 25 million. The Plaintiffs did not bring a
cassation action in respect of the dismissed part of the main action.
In the judgement of 24 November 2022, the Supreme Court repealed the appealed judgement and referred the case
to the Court of Appeals in Wrocław for reconsideration.
In its judgement of 4 December 2024, the Court of Appeals in Wrocław again dismissed KGHM's appeal, set-off the
costs of the appeal and cassation proceedings between the parties and partially amended the decision regarding
the costs of the main claim for the first instance. A cassation appeal may be filed against the judgement within 2
months of delivery of the judgement and its justification.
1.6.6 Expenditures incurred to support culture, sports, charities, media, social organisations, trade unions etc.
As part of its non-business objectives, the KGHM Group supports local and national initiatives in the broader social area.
The support is of financial nature, in the form of donations for charitable activities, sponsorship of sport, science and culture
and the arts. KGHM also participates in a number of sector organisations, as well as those with a social profile, provides
financial support for trade union organisations and promotes the Company in the media. The aforementioned objectives
are mainly realised by the parent entity of the KGHM Polska Miedź S.A. Group. In 2024, the related expenditures incurred
by KGHM Polska Miedź S.A. amounted to PLN 102 million.
KGHM Polska Miedź S.A. 68
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Table 21. Expenditures of KGHM Polska Miedź S.A. and the Group on the support of culture, sport, charitable institutions,
media, social organisations, trade unions, etc. (PLN million)
Scope
Value
Charitable
activities
23
Value of donations granted by KGHM Polska Miedź S.A. to the KGHM Polska Miedź Foundation. In
addition to the amount of cash indicated in the table, in-kind donations of PLN 0.2 million were provided.
The Foundation pursues its corporate social responsibility goals through charitable and philanthropic
activities, including the support for socially useful projects and disadvantaged people.
Media
2
Expenditures on promotion and advertising of KGHM Polska Miedź S.A. in the media (broadcasts, press
releases, advertising spots)
Sponsorship
49
Expenditures incurred to support business units in the scope of:
− Sports initiatives (PLN 45 million) - in 2024, expenditures mainly on sponsorship of local clubs,
including the Zagłębie Lubin S.A. football club (the Company is the sole owner of Zagłębie), KGHM
MKS Zagłębie Lubin, KGHM SPR Chrobry Głogów (handball) and KGHM BC Polkowice (basketball). As
part of its sponsorship activities, the Company also supports a number of sport events, including
cyclical events such as the Bieg Piastów in Jakuszyce (key sponsor) and Cross Straceńców in Głogów.
− Culture and social affairs (PLN 3 million) - support for cultural entities, patronage of the Royal Castle
in Warsaw and the Wrocław Opera House. Support for local initiatives: Modrzejewska Theatre in
Legnica, Legnica Book of the Year, Cultural Congress of Wrocław and Lower Silesia “The Art of
Cooperation”.
− Science (PLN 0.5 million) - expenditure in this area included support for universities and scientific
institutions, financing of scientific projects thematically related to the activities of KGHM Polska
Miedź S.A., support for industry events related to mining, innovation and support for scientists.
KGHM’s sponsorship strategy is closely associated with the activity pursued in the area of Corporate
Social Responsibility (CSR) and assumes that most funds will be allocated to the realisation of activities
promoting the Company and its products on the one hand and for supporting valuable initiatives and
cultural, sport, science or social undertakings on the other hand.
Sponsorship activities are governed by the Sponsorship Policy of KGHM Polska Miedź S.A. Decisions on
granting the support for a particular project are taken by the Sponsorship Committee. The decisions of
the Committee are documented in the form of minutes in each case, which are approved by the
President of the Management Board of KGHM Polska Miedź S.A.
Associations
and
community
organisations
11
Expenditures incurred due to participation of KGHM Polska Miedź S.A. in organisations and social
associations (professional, employer and local self-government):
− domestic (PLN 4 million) - membership in local and national organisations with different profiles,
including:
− the Accountants Association in Poland, Regional Branch in Legnica,
− the Employers' Organization of Polish Copper,
− Association of Non-Ferrous Metals Engineers and Technicians
− Economic Security of Poland Consortium
− international (PLN 8 million) - membership of more than a dozen organisations, mainly sector
organisations such as:
− Euromines
− European Precious Metals Federation
− Minor Metals Trade Association
The expenditures reported include the participation in 42 organisations and associations, with free of
charge membership in several cases. In 2024, the Company joined the European Industrial Alliance on
Small Modular Reactors (membership free of charge).
Trade union
organisations
17
Expenditures related to the functioning of trade unions in the Company, including wages with overheads
of trade union activists exempted from the obligation to work (PLN 15.3 million), pursuant to the Act on
Trade Unions of 23 May 1991.
TOTAL
102
KGHM Polska Miedź S.A. 69
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2 KEY RESULTS OF THE GROUP AND REPORTING SEGMENTS
2.1 KEY OPERATIONAL AND FINANCIAL INDICATORS BY BUSINESS SEGMENT
Table 22. Key operational and financial indicators by operating segments in 2024
Unit
KGHM Polska
Miedź S.A.
KGHM
INTERNATIONAL
LTD.
Sierra Gorda
S.C.M. (55%)
Other
Production
− Payable copper
kt
588.7
60.5
80.5
x
− TPM
koz t
86.8
53.5
33.1
x
− Silver
t
1 316
1
23
x
Production cost
− C1 payable copper production cost
USD/lb
3.07
1.52
1.60
x
Financial data
− Revenue from contracts with
customers
PLN mn
29 894
3 394
3 556
12 910
− from external customers
PLN mn
29 215
3 378
3 556
2 711
− Profit/loss for the period
PLN mn
2 788
1 283
218
(50)
− EBITDA
PLN mn
4 463
1 643
1 877
474
− Assets
PLN mn
50 405
16 422
14 245
6 889
− Liabilities
PLN mn
19 251
19 990
13 742
3 848
− Cash expenditures on property,
plant and equipment
and intangible assets
PLN mn
3 635
1 636
1 123
505
2.2 KEY FACTORS INFLUENCING THE RESULTS OF THE KGHM POLSKA MIEDŹ S.A. GROUP IN 2024 -
MACROECONOMIC CONDITIONS
The KGHM Group, due to the specific nature of the products it sells, operates in a market highly dependent on the market
environment, including macroeconomic conditions. In particular, the KGHM Group's results achieved in 2024 were
significantly affected by the general economic situation influencing the level of metal consumption worldwide and,
consequently, metal prices and exchange rates.
2024 was a period of high uncertainty in the global economy as a result of a number of factors. The most significant factors
include:
Political risks
− Russia's continued aggression against Ukraine
− extension of Israel's war against Hezbollah inside Lebanon
− deterioration in relations between the USA and the European Union
− the prospect of customs war and its consequences
Copper market
foundations
− constraints in the form of a limited number of new investments in mining projects
− a clear surplus of metallurgical capacity over the supply of copper-bearing materials.
− a general trend towards stricter environmental requirements associated with sustainable development policy
(ESG)
− changing structure of copper demand in China - increased demand from high-tech and energy transition sectors
Currency market
− major central banks have started a cycle of interest rate cuts
− announcements of actions by the administration of the new US President are perceived by financial markets as
pro-inflationary, supporting expectations of interest rates remaining at elevated levels in the longer term
strengthening the US dollar
− the persistence of relatively high interest rates in Poland and forecasts indicating that inflation will remain at
elevated levels have contributed to the strengthening of the zloty
KGHM Polska Miedź S.A. 70
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Diagram 15. Forecasts of real GDP growth per the International Monetary Fund from January 2025 versus previous
forecasts.
Source: KGHM Polska Miedź, International Monetary Fund
Forecasts (F) of IMF real GDP growth - Economic Outlook - January 2025 compared to October 2024; for Chile - October 2024 compared to April 2024.
Chart 11. Change in commodity market price in 2024 (first versus last day of the year)
Source: Refinitiv, KGHM Polska Miedź S.A.
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Base metal Precious metal Energy
KGHM Polska Miedź S.A. 71
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
The situation on the copper market remains steady. In the short and medium term (the next 2-3 years), new mined
production from currently commencing projects and the potentially slower growth of the global economy, burdened by
higher interest rates, may shift the market’s balance towards surplus and decrease the price pressure. The same scenario
will in significant part be dependent on how long the observed slowdown in global economy will be and the pace of energy
transition. The balance on the copper market also depends on the decision regarding the Cobre Panama mine, which is
closed since the end of 2023. The potential production, which will return to the market following the restart of production
by the mine will amount to approx. 250 thousand tonnes of red metal.
In the long term and on the supply side, limitations due to the low number of new investments in mining projects, plans to
raise mining taxes in countries with the highest production potential and the general trend towards raising environmental
standards related to sustainable development (ESG) are still present. The aforementioned limitations in supply, together
with the strong push towards electromobility and green revolution support the rate of increase in demand for copper, and
therefore copper price increases in the long term.
The average copper price (cash settlement on the LME) in 2024 was 9 147 USD/t. The highest cash settlement price was
recorded on 20 May and amounted to USD 10 857/t. The lowest level was recorded on 12 February, when the price of the
red metal was 8 085 USD/t. The range of volatility in copper prices last year was lower than in 2023. Considering cash
settlement prices, copper increased by only 3% last year (first vs last day of the year). Due to the appreciation of the Polish
currency in 2024, the average price expressed in PLN increased by approximately 2% in 2024 in relation to 2023 and
amounted to 36 401 PLN/t (daily LME prices calculated after the NBP fixings).
Chart 12. Copper price (monthly averages) per the London Metal Exchange (in USD/t)
(Source: Bloomberg, KGHM Polska Miedź S.A.)
Silver prices in 2024 moved in line with investors’ expectations of interest rate changes by the US Federal Open Market
Committee and affected by the rise in the price of gold, whose valuation was affected by central banks purchases and
heightened geopolitical risk. The beginning of the year brought more hawkish rhetoric of the Fed and, consequently, the
price fell to an annual low recorded at a level of 22.09 USD/oz t in February. The annual silver peak price of 34.51 USD/oz t
was achieved before the USA presidential election, in mid-October.
Throughout the year, the price of silver was moving upward, returning some of the previous gains just after Trump's victory,
in a wave of response to the anticipated tariff war, higher interest rates and a rebound after months of uncertainty before
the November US presidential election. In 2024, the Fed applied three interest rate cuts by 100bp in total. However, inflation
readings in the second half of the year suggested that it would move towards the inflation target more slowly than expected.
The uncertainty surrounding the economic policy of Donald Trump's next term presidency resulted in higher inflation
expectations and a higher projected interest rates path, limiting further increases in silver prices in the fourth quarter of
the year. Throughout 2024, the gold/silver ratio returned to levels close to the long-term average, but due to a halt in silver
price increases towards the end of the year, it returned to levels recorded at the end of 2023. Gold reached its all-time
maximum of 2 784 USD/oz t in 2024 at a similar time as silver reached its annual maximum.
Silver prices ended 2024 at a level of 28.9 USD/oz t. The average price of the metal on the London Bullion Market Association
(LBMA) recorded an increase of 21% in 2024, amounting to 28.27 USD/oz t compared to 23.35 USD/oz t in 2023.
0
3000
6000
9000
2020 2021 2022 2023 2024
KGHM Polska Miedź S.A. 72
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 13. Silver price (average monthly) per the London Bullion Market Association (in USD/oz t)
(Source: Bloomberg, KGHM Polska Miedź S.A.)
The quotations of the Polish zloty remained in a sideways trend for most of 2024 after high volatility in previous years.
For most of the year, PLN remained relatively stable and was slightly below the rate of 4.0 in relation to the dollar, against
which the zloty strengthened towards the end of 2023. The continued strength of the currency was affected by the Monetary
Policy Council's failure to cut interest rates and its announcements indicating inflation remaining higher than planned.
In the fourth quarter of the year, the PLN exchange rate versus the US dollar depreciated from 3.81 to a level of 4.18 in view
of the global strengthening of the USD, maintaining a sideways trend against the EUR. The maximum rate of the zloty
against the euro of 4.40 was recorded at the beginning of the year. The zloty ended 2024 around 4.1012 per US dollar
(NBP fixing as at 31 December 2024). The average USD/PLN (NBP) exchange rate in 2024 amounted to 3.9799, over 5%
lower than the exchange rate for 2023 (4.2030 USD/PLN).
Chart 14. USD/PLN exchange rate (monthly averages) per the National Bank of Poland
(Source: Bloomberg, KGHM Polska Miedź S.A.)
Table 23. Market conditions significant for the operations of the KGHM Polska Miedź S.A. Group - average prices
Unit
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Copper price per the LME
USD/t
9 147
8 478
+7.9
9 193
9 210
9 753
8 438
Copper price per the LME in PLN
PLN/t
36 401
35 647
+2.1
37 065
35 935
38 966
33 683
Copper price per the LBMA
USD/oz t
28.27
23.35
+21.1
31.38
29.43
28.84
23.34
Molybdenum price per Platts
USD/lb
21.30
24.39
(12.7)
21.78
21.84
21.59
19.96
USD/PLN exchange rate per the NBP
3.98
4.20
(5.2)
4.03
3.90
4.00
3.99
USD/CAD exchange rate per the Bank of
Canada
1.37
1.35
+1.5
1.40
1.36
1.37
1.35
USD/CLP exchange rate per the Bank of
Chile
944
839
+12.5
962
932
935
946
0
10
20
30
40
2020 2021 2022 2023 2024
0,00
1,00
2,00
3,00
4,00
5,00
2020 2021 2022 2023 2024
KGHM Polska Miedź S.A. 73
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.3 RESULTS OF THE KGHM POLSKA MIEDŹ S.A. GROUP
2.3.1 Production
In 2024, copper production by the Group was higher by 2.6%, or by 18.8 thousand tonnes compared to 2023. The increase
referred to KGHM INTERNATIONAL LTD. (+20.6 thousand tonnes) and Sierra Gorda SCM (+1.8 thousand tonnes on a 55%
basis) and was offset by slightly lower production by KGHM Polska Miedź S.A. (-3.7 thousand tonnes).
Copper production at KGHM Polska Miedź S.A. in 2024 was slightly lower than last year - the slight decrease is due to the
realisation of assumptions adopted in the production plan for 2024 (including, among others, the maintenance of the
Głogów I Copper Smelter and Refinery).
The increase in copper production in the KGHM INTERNATIONAL LTD. segment was mainly due to an increase in production
from the Robinson mine (+24.5 thousand tonnes), which mined the proper, rich deposit zone in 2024.
The improved copper production results in Sierra Gorda S.C.M. compared to the previous year was due to higher metal
content in the ore mined and higher ore processing.
Detailed information on production results may be found in the sections dedicated to individual segments (KGHM Polska
Miedź S.A., KGHM INTERNATIONAL LTD., Sierra Gorda S.C.M.).
The Group’s production results are shown below.
Table 24. Production by the Group
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Payable copper (kt)
Group
729.7
710.9
+2.6
185.9
186.2
178.4
179.2
- KGHM Polska Miedź S.A.
588.7
592.4
(0.6)
147.5
148.7
146.3
146.2
- KGHM INTERNATIONAL LTD.
60.5
39.9
+51.6
15.0
16.1
13.4
16.0
- Sierra Gorda S.C.M.
80.5
78.7
+2.3
23.4
21.4
18.7
17.0
TPM (koz t)
Group
173.4
184.5
(6.0)
46.7
42.6
43.3
40.8
- KGHM Polska Miedź S.A.
86.8
111.0
(21.8)
22.6
19.4
24.7
20.1
- KGHM INTERNATIONAL LTD.
53.5
40.6
+31.8
14.1
13.8
11.4
14.2
- Sierra Gorda S.C.M.
33.1
32.9
+0.6
10.0
9.4
7.2
6.5
Silver (t)
Group
1 341
1 428
(6.1)
360
303
362
316
- KGHM Polska Miedź S.A.
1 316
1 403
(6.2)
354
297
356
310
- KGHM INTERNATIONAL LTD.
1
3
(66.7)
0.2
0.1
0.3
0.4
- Sierra Gorda S.C.M.
23
22
+4.5
6
6
6
6
Molybdenum (mn lbs)
Group
3.4
3.6
(5.6)
1.3
1.1
0.5
0.6
- KGHM Polska Miedź S.A.
-
-
×
-
-
-
-
- KGHM INTERNATIONAL LTD.
0.1
0.1
-
0.0
0.0
0.1
0.0
- Sierra Gorda S.C.M.
3.3
3.5
(5.7)
1.3
1.1
0.4
0.5
Sierra Gorda S.C.M. - 55% Group share
2.3.2 Sales
The geographic and product structure of the consolidated sales revenue of the Group is presented in the following charts.
In accordance with the adopted principle of consolidation by the equity method, revenues do not include revenues of the
segment Sierra Gorda S.C.M. Detailed information on segment’s sales is presented in the sections devoted to the results of
individual segments (KGHM Polska Miedź S.A., KGHM INTERNATIONAL LTD., Sierra Gorda S.C.M.).
KGHM Polska Miedź S.A. 74
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 15. Geographic structure of Group sales
Chart 16. Product structure of Group sales
2.3.3 Costs
Unit costs by Group segments are presented in the table below. Detailed descriptions of individual items are presented in
the sections devoted to individual segments (KGHM Polska Miedź S.A., KGHM INTERNATIONAL LTD., Sierra Gorda S.C.M.).
Table 25. C1 cost of producing payable copper in the Group, including mining taxes (USD/lb)
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Group
2.67
2.87
(7.0)
2.43
2.74
2.71
2.81
- KGHM Polska Miedź S.A.
3.07
2.98
+3.0
3.03
3.24
3.00
3.01
- KGHM INTERNATIONAL LTD.
1.52
4.15
(63.4)
1.14
1.47
1.68
2.17
- Sierra Gorda S.C.M.
1.60
1.68
(4.8)
1.12
1.68
1.88
1.90
KGHM Group ranks among mining companies representing an average level of C1 cost. In order to maintain comparability
(uniform calculation methodology, associated metals prices and exchange rates), the cost curve presented below is based
on data of Wood Mackenzie, a global provider of analytical solutions for the natural resources, chemicals and renewable
energy sectors. The costs presented on the curve do not include mining taxes.
Poland
26%
Germany
18%
China
12%
Czechia
7%
Italy
7%
Hungary
4%
Switzerland
4%
USA
4%
Other
26%
Copper
70%
Silver
14%
Gold
4%
Services
5%
Other
7%
KGHM Polska Miedź S.A. 75
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 17. C1 cost curve (USD/lb) - C1 cost excluding mining taxes
(Source: Wood Mackenzie Q42024, KGHM Polska Miedź S.A. own work)
C1 cost is one of the indicators best reflecting the situation of entities with different mining profiles, however, due to
differences in the cost calculation methodology and different macroeconomic parameters adopted for the calculation, the
C1 cost of the company and the KGHM Group presented above may deviate from the figures published in the reports of
analytical institutions.
2.3.4 Statement of profit and loss
Table 26. Financial results of the Group (in PLN million)
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Revenues from contracts with customers
35 320
33 467
+5.5
9 181
8 659
9 165
8 315
Cost of sales, selling costs and administrative expenses
(31 553)
(35 107)
(10.1)
(8 400)
(7 783)
(7 641)
(7 729)
Profit on sales
3 767
(1 640)
×
781
876
1 524
586
Profit or loss on involvement in a joint venture
778
698
+11.5
601
293
(260)
144
Other operating income and (costs)
444
(2 817)
×
1 076
(800)
88
80
Finance income and (costs)
(381)
159
×
(238)
70
(106)
(107)
Profit before income tax
4 608
(3 600)
×
2 220
439
1 246
703
Income tax expense
(1 738)
(91)
×19.1
(664)
(199)
(596)
(279)
Profit/(loss) for the period
2 870
(3 691)
×
1 556
240
650
424
Adjusted EBITDA
8 457
5 362
+57.7
2 271
1 978
2 657
1 551
Adjusted EBITDA, defined as profit/loss on sales increased by depreciation/amortisation recognised in expenses by nature
and adjusted by recognition/reversal of impairment losses on property, plant and equipment in the core business, is one
of the basic parameters considered by the Management Board of the Parent Entity when evaluating the results of individual
operating segments. A detailed definition of this indicator and its reconciliation to profit or loss for the period of the Group
may be found in Part 2 (Information on segments and revenues) of the Consolidated financial statements for 2024.
-2,00
-1,00
0,00
1,00
2,00
3,00
4,00
5,00
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
C1 cost USD/lb
Percentile of global copper production
KGHM Polska Miedź S.A. Group
KGHM Polska Miedź S.A. 76
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Table 27. Main factors impacting the change in profit or loss of the Group
Item
Impact on
change in
profit or loss
(PLN million)
Description
EBITDA
+2 802
Increase in EBITDA of operating segments (excluding Sierra Gorda), comprised of:
− EBITDA of the KGHM Polska Miedź S.A. segment +PLN 900 million,
− EBITDA of the KGHM INTERNATIONAL LTD. segment +PLN 1 785 million,
− EBITDA of the segment - other segments +PLN 117 million.
The results of the aforementioned segments are described respectively in sections 2.5- 2.7 of this
report.
Impairment losses
on property, plant
and equipment
and intangible
assets
+2 438
In 2024, a decrease in impairment losses on property, plant and equipment and intangible assets
was recorded (PLN 290 million in 2024 and PLN 2 728 million in 2023, respectively).
Impairment losses
on fixed assets
under
construction and
intangible assets
not yet available
for use
+1 286
In 2024, a decrease in impairment losses on fixed assets under construction and intangible assets
not yet available for use was recorded (PLN 22 million in 2024 and PLN 1 308 million in 2023,
respectively).
Profit or loss on
involvement in a
joint venture
+80
An increase in the result on involvement in a joint venture, comprised of:
− an increase in profit due to the reversal of allowances for impairment of loans granted to a joint
venture, PLN 125 million,
− a decrease in interest income on loans by PLN 45 million.
Exchange
differences
+1 529
An increase in the result on exchange differences was affected by:
− a PLN 1 969 million higher result on exchange differences presented in other operating income
and costs (mainly due to loans within the Group),
− a PLN 440 million lower result on exchange differences from the measurement and realisation
of borrowings presented in finance income and costs (mainly exchange differences on
borrowings of KGHM Polska Miedź S.A.)
Income tax
expense
(1 647)
An increase in income tax expense mainly in the scope of:
− higher current income tax by PLN 471 million,
− higher deferred income tax by PLN 1 159 million.
Chart 18. Change in profit/loss of the Group in 2024 (PLN million)
-3 691
2 870
+1 286
+80
+1 529
+73
+2 802
+2 438
-1 647
Loss for 2023 Change in
EBITDA
(excluding Sierra
Gorda)
Impairment
losses on
property, plant
and equipment
and intangible
assets
Impairment
losses on fixed
assets under
construction and
intangible assets
not yet available
for use
Profit or loss on
involvement in a
joint venture
Exchange
differences
Income tax
expense
Other Profit for 2024
KGHM Polska Miedź S.A. 77
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.3.5 Cash flows
Table 28. Cash flow of the Group (PLN million)
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Net cash generated from/(used in) operating activities
4 690
6 051
(22.5)
1 257
405
2 942
86
Change in working capital
(875)
3 801
×
(362)
(693)
975
(795)
Net cash generated from/(used in) investing activities
(5 506)
(4 798)
+14.8
(1 458)
(1 472)
(1 158)
(1 418)
Net cash generated from/(used in) financing activities
(217)
(747)
(71.0)
(191)
(294)
(164)
432
Net cash flows
(1 033)
506
×
(392)
(1 361)
1 620
(900)
Exchange differences
19
23
(17.4)
(5)
32
(5)
(3)
Cash and cash equivalents at beginning of the period
1 729
1 200
+44.1
1 112
2 441
826
1 729
Cash and cash equivalents at end of the period
715
1 729
(58.6)
715
1 112
2 441
826
Net cash generated from operating activities in 2024 amounted to +PLN 4 690 million and mainly comprised:
− EBITDA, excluding Sierra Gorda S.C.M., of PLN 6 580 million,
− negative effect of the change in working capital of -PLN 875 million, including -PLN 1 007 million change in trade
payables within the reverse factoring mechanism,
− change in assets and liabilities due to derivatives +PLN 180 million,
− reclassification of other comprehensive income to profit or loss due to the realisation of hedging derivatives
- PLN 628 million,
− income tax paid, -PLN 413 million.
Net cash used in investing activities in 2024 amounted to -PLN 5 506 million and mainly comprised:
− expenditures on property, plant and equipment and intangible assets of the segment KGHM Polska Miedź S.A in the
amount of PLN 3 635 million,
− expenditures on property, plant and equipment and intangible assets of the segment KGHM International LTD in the
amount of PLN 1 636 million,
− expenditures on property, plant and equipment and intangible assets of the segment - other segments in the amount
of PLN 505 million,
− repayment of the loan by Sierra Gorda S.C.M., together with interest, PLN 464 million.
Net cash used in financing activities in 2024 amounted to -PLN 217 million and mainly comprised the issuance of 7-year
series C bonds in the amount of PLN 1 000 million and the redemption of 5-year A series bonds in the amount of PLN 400
million. The balance of borrowings drawn and repaid amounted to -PLN 214 million. The Company paid a dividend to
shareholders of the parent entity in the amount of PLN 300 million. Interest paid amounted to PLN 202 million, including
PLN 164 million on trade payables within the reverse factoring mechanism.
After reflecting exchange differences on cash and cash equivalents, the balance of cash and cash equivalents decreased by
PLN 1 014 million and at the end of 2024 amounted to PLN 715 million.
Chart 19. Cash flows of the Group in 2024 (PLN million)
1 729
715
+4 690
+600
-5 506
-214
-300
-202
-82
Cash and cash
equivalents as at
1 January 2024
Net cash
generated from
operating
activities
Net cash used in
investment
activities
Redemption /
Issuance of
bonds
Borrowings
drawn and
repaid
Dividend paid Interest repaid Other Cash and cash
equivalents as at
31 December
2024
KGHM Polska Miedź S.A. 78
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Translation from the original Polish version
2.3.6 Assets
Table 29. Consolidated assets (PLN million)
31 December
2024
31 December
2023
Change
(%)
30 September
2024
30 June
2024
31 March
2024
Property, plant and equipment and
intangible assets
30 180
26 749
+12.8
28 706
28 046
27 452
Joint ventures – loans granted
9 800
9 096
+7.7
8 801
9 162
9 364
Financial Instruments
1 726
1 613
+7.0
1 593
1 683
1 490
Deferred tax assets
302
137
×2.2
162
135
143
Other non-financial assets
277
386
(28.2)
282
280
247
Non-current assets
42 285
37 981
+11.3
39 544
39 306
38 696
Inventories
8 063
8 425
(4.3)
8 097
8 452
7 959
Trade receivables
1 345
932
+44.3
1 557
1 450
1 616
Tax assets
453
985
(54.0)
327
347
630
Derivatives
219
760
(71.2)
310
406
591
Other financial assets
317
296
+7.1
266
261
307
Other non-financial assets
366
275
+33.1
472
576
444
Cash and cash equivalents
715
1 729
(58.6)
1 112
2 441
826
Assets held for sale
129
-
×
112
-
Current assets
11 607
13 402
(13.4)
12 253
13 933
12 373
Total assets
53 892
51 383
+4.9
51 797
53 239
51 069
At the end of 2024, total assets in the consolidated statement amounted to PLN 53 892 million and were higher as compared
to 31 December 2023 by PLN 2 509 million. The main changes comprised:
− an increase in property, plant and equipment and intangible assets by PLN 3 431 million as a result of cash expenditures
incurred on property, plant and equipment and intangible assets in the amount of PLN 5 855 million and
depreciation/amortisation of PLN 2 513 million,
− an increase in the carrying amount of loans granted to Sierra Gorda S.C.M. by PLN 704 million mainly due to accrued
interest of PLN 552 million, foreign exchange gains of PLN 390 million including loan repayments of PLN 464 million,
− a decrease in inventories by PLN 362 million, including mainly finished products by PLN 238 million and materials by
PLN 107 million,
− an increase in trade receivables by PLN 413 million, including receivables measured at amortised cost by PLN 120 million
and receivables measured at fair value by PLN 293 million,
− a decrease in tax receivables by PLN 532 million mainly related to the decrease in current income tax receivables,
− a PLN 488 million decrease in derivatives mainly relates to the decrease in foreign exchange derivatives by
PLN 474 million (USDPLN exchange rate) excluded from hedge accounting.
− a decrease in cash and cash equivalents by PLN 1 014 million.
Chart 20. Change in assets of the Group in 2024 (PLN million)
51 383
53 892
+3 431
+704
+413
+357
-362
-532
-488
-1 014
Assets as at 31
December 2023
Property, plant
and equipment
and intangible
assets
Loans granted
to Sierra Gorda
Inventories Trade
receivables
Tax assets Derivatives Cash Other Assets as at 31
December 2024
KGHM Polska Miedź S.A. 79
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.3.7 Equity and liabilities
Table 30. Consolidated equity and liabilities (PLN million)
31 December
2024
31 December
2023
Change
(%)
30 September
2024
30 June
2024
31 March
2024
Equity
31 058
28 630
+8.5
29 394
29 383
28 900
Borrowings, leases and debt securities
4 910
4 761
+3.1
4 953
4 987
5 313
Derivatives
269
202
+33.2
182
228
173
Employee benefits liabilities
2 784
3 117
(10.7)
2 940
2 814
2 934
Provisions for decommissioning costs of
mines and other facilities
2 084
1 923
+8.4
1 972
1 915
1 932
Deferred tax liabilities
1 384
646
×2.1
901
844
630
Other liabilities
397
487
(18.5)
410
485
483
Non-current liabilities
11 828
11 136
+6.2
11 358
11 273
11 465
Borrowings, leases and debt securities
1 261
964
+30.8
1 223
1 206
1 015
Derivatives
44
499
(91.2)
243
266
419
Trade and other payables
5 132
6 188
(17.1)
5 490
6 350
5 088
Employee benefits liabilities
2 019
1 709
+18.1
1 822
1 776
1 781
Tax liabilities
1 049
611
+71.7
770
1 095
598
Provisions for liabilities and other charges
280
194
+44.3
259
247
223
Other liabilities
1 061
1 452
(26.9)
1 060
1 643
1 580
Liabilities associated with assets held for sale
160
-
×
178
-
Current liabilities
11 006
11 617
(5.3)
11 045
12 583
10 704
Non-current and current liabilities
22 834
22 753
+0,4
22 403
23 856
22 169
Total equity and liabilities
53 892
51 383
+4.9
51 797
53 239
51 069
Equity and liabilities at the end of 2024 amounted to PLN 53 892 million and were higher as compared to 31 December
2023 by PLN 2 509 million. The main changes concerned:
− an increase in equity by PLN 2 428 million mainly as a result of profit for the period of PLN 2 870 million and dividend
paid in the amount of PLN 300 million, a decrease in actuarial losses due to the measurement of benefits after the
period of employment by PLN 272 million and a decrease in reserves from the measurement of financial instruments
of PLN 439 million.
− an increase in borrowings, leases and debt securities by PLN 446 million, mainly as a result of a PLN 600 million increase
in the balance of liabilities due to bonds (issuance of 7-year series C bonds in the amount of PLN 1 000 million and
redemption of 5-year series A bonds in the amount of PLN 400 million), an increase in liabilities due to borrowings by
PLN 189 million alongside a decrease in the amount of loans drawn by PLN 292 million,
− an increase in deferred tax liabilities by PLN 738 million (deferred tax assets and liabilities prior to offsetting at the
individual level are presented in note 5.1.1 of the consolidated financial statements),
− an increase in tax liabilities by PLN 438 million, including a PLN 325 million increase in current income tax and a PLN
113 million increase in liabilities due to other taxes (mainly on account of the Parent Entity’s mineral extraction tax).
− a decrease in trade and other payables (non-current and current) by the total of PLN 1 058 million, mainly with regard
to trade payables within the reverse factoring mechanism by PLN 1 021 million,
− a decrease in derivatives (non-current and current) by PLN 388 million, mainly put options sold (USDPLN)
by PLN 473 million, including an increase in hedging instruments by PLN 100 million,
− a decrease in other liabilities (non-current and current) in total by -PLN 481 million relates mainly to accruals of
-PLN 228 million and deferred income of -PLN 99 million.
Chart 21. Change in equity and liabilities of the Group in 2024 (in PLN million)
+2 428
+446
+738
+438
+386
-1 058
-388
-481
51 383
53 892
Equity and
liabilities as at
31 December
2023
Equity Borrowings Deferred
income tax
Tax liabilities Trade payables Derivatives Other liabilities Other Equity and
liabilities as at
31 December
2024
KGHM Polska Miedź S.A. 80
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.3.8 Contingent assets and liabilities due to guarantees granted
As at 31 December 2024, contingent assets amounted to PLN 428 million and related mainly to promissory notes
receivables in the amount of PLN 107 million and guarantees received by the Company in the amount of PLN 297 million.
As at 31 December 2024, the liabilities of the Group due to guarantees and letters of credit granted amounted to a total of
PLN 1 150 million (as at 31 December 2023: PLN 1 132 million) and due to promissory notes payables amounted to
PLN 223 million (as at 31 December 2023: PLN 257 million).
Detailed information regarding contingent assets and liabilities, including guarantees granted, may be found in notes 12.6
and 8.6 of the Consolidated financial statements.
Based on the knowledge held, at the end of the reporting period the Group assessed the probability of payments resulting
from liabilities due to guarantees granted as low.
2.4 SOURCES OF FINANCING IN THE GROUP
The Group's management of financial resources involves securing of an adequate level of cash and access to a broad
portfolio of flexible sources of financing to ensure the ability to meet both current and future financial liabilities in a timely
manner, taking into account the cost of gaining liquidity. The Financial Liquidity Management Policy in place regulates the
rules of raising external funding, the management of debt, the monitoring of the Group's debt levels and the effective
management of working capital.
2.4.1 Net debt in the Group
Borrowings of the Group at the end of 2024 amounted to PLN 6 171 million. The debt structure is based on diversified and
long-term financing sources, ensuring financial stability over the long term.
The Group’s free cash and cash equivalents, which as at 31 December 2024 amounted to PLN 691 million, are of a short
term nature.
Table 31. Net debt structure of the Group (in PLN million)
31 December
2024
31 December
2023
Change
(%)
30 September
2024
30 June
2024
31 March
2024
Liabilities due to:
6 171
5 725
+7.8
6 176
6 193
6 328
Bank loans
856
667
+28.3
822
673
1 270
Other loans
1 980
2 272
(12.9)
1 954
2 138
2 217
Debt securities
2 602
2 002
+30.0
2 650
2 602
2 038
Leases
733
784
(6.5)
750
780
803
Free cash and cash equivalents
691
1 702
(59.4)
1 096
2 417
803
Derivatives related to sources of external
financing
177
175
+1.1
164
191
212
Net debt
5 303
3 848
+37.8
4 916
3 585
5 313
Table 32. Net debt structure of the Parent Entity (PLN million)
31 December
2024
31 December
2023
Change
(%)
30 September
2024
30 June
2024
31 March
2024
Liabilities due to:
6 351
5 691
+11.6
6 242
6 385
6 480
Bank loans
793
590
+34.4
759
608
1 199
Other loans
1 794
2 058
(12.8)
1 752
1 936
2 001
Debt securities
2 602
2 002
+30.0
2 650
2 602
2 038
Cash pooling
561
350
+60.3
441
551
551
Leases
601
691
(13.0)
640
688
691
Free cash and cash equivalents
359
1 463
(75.5)
905
2 179
669
Derivatives related to sources of external
financing
177
175
+1.1
164
191
212
Net debt
5 815
4 053
+43.5
5 173
4 015
5 599
KGHM Polska Miedź S.A. 81
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.4.2 Sources of financing in the Group
As at 31 December 2024, the Group held open lines of credit, loans and debt securities with a total available amount of
PLN 16 313 million, out of which PLN 5 438 million had been drawn.
Table 33. Sources of financing in the Group
27
Unsecured, revolving
syndicated credit
facility in the
amount of
USD 1.4 billion
A credit facility in the amount of USD 1 438 million (PLN 5 898 million), acquired on the basis of a financing
agreement entered into by the Parent Entity with a syndicate of banks in 2019, with maturity falling on
19 December 2024 and the option of extending for a further 2 years (5+1+1). In the years 2020-2021 the Parent
Entity received a consent of the Syndicate Members to extend the term of the agreement by 2 years, that is to
20 December 2026. The limit of available financing during the extension period amounts to USD 1 438 million
(PLN 5 898 million). Interest is based on SOFR plus a margin, which depends on the Consolidated Total Net
Debt/EBITDA ratio.
The funds obtained under this credit facility are used to finance general corporate purposes.
Investment loans,
including from the
European
Investment Bank in
the total amount of
PLN 3.5 billion with
financing periods of
up to 12 years
Financing agreements signed by the Parent Entity with the European Investment Bank:
− in August 2014 in the amount of PLN 2 000 million, which was drawn in the form of three instalments with
maturities falling on 30 October 2026, 30 August 2028 and 23 May 2029 and used to the maximum available
amount. The funds acquired through this loan were used to finance selected investment projects related to
modernisation of metallurgy and development of the Żelazny Most tailings storage facility,
− in December 2017 in the amount of PLN 1 340 million, under which four instalments were drawn with
maturities falling on 28 June 2030, 23 April 2031, 11 September 2031 and 6 March 2035. The funds acquired
through this loan are used to finance the Parent Entity’s development and replacement projects at various
stages of the production line.
Interest on the instalments drawn is based on a fixed interest rate or the SOFR rate plus a margin, which depends
on the net debt/EBITDA ratio.
Debt securities in the
amount of
PLN 2.6 billion
The bond issuance program on the Polish market was established under an issuance agreement of 27 May 2019.
The issuance had a nominal value of PLN 2 000 million, under which 5-year bonds were issued in the amount of
PLN 400 million which were redeemed by the Parent Entity on 27 June 2024 and 10-year bonds in the amount of
PLN 1 600 million, with a redemption date of 27 June 2029. Interest is based on WIBOR plus a margin.
Polish market bond issuance programme established by the issuance agreement of 29 May 2024 up to PLN 4 000
million for a period of 10 years, under which on 26 June 2024 7-year bonds with a nominal value of PLN 1 000
million were issued with a redemption date of 26 June 2031. The interest rate is based on the WIBOR rate plus a
margin.
The funds raised from the bond issuance were used to redeem 5-year bonds issued in 2019 and to finance general
corporate purposes.
Bilateral bank loans
in the amount of up
to PLN 4.3 billion
The Group holds lines of credit in the form of short-term and long-term bilateral agreements in the total amount
of PLN 4 294 million. Interest is based on a fixed interest rate or on the variable interest rates WIBOR, SOFR,
EURIBOR plus a margin.
The funds obtained under the aforementioned bank loan agreements are a tool supporting the management of
current financial liquidity and support the financing of investments.
An additional source of support to the Group's liquidity management process is the reverse factoring service. The main
goal of the reverse factoring program is to guarantee the effective management of working capital while ensuring the timely
execution of trade payables towards the suppliers of the Group. Reverse factoring is treated by the Group as an important
element in diversifying the sources of financing the working capital.
The aforementioned sources fully cover the current, medium- and long-term liquidity needs of the Group.
27
Detailed information on the aforementioned borrowings and debt securities may be found in note 8.4 of the financial
statements
KGHM Polska Miedź S.A. 82
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.4.3 Debt position as at 31 December 2024
The following table presents the Group’s borrowing structure and the extent to which borrowing was utilised.
Table 34. Amount of borrowing available and drawn by the Group (in PLN million)
Amount drawn
as at 31
December
2024
Amount drawn
as at 31
December
2023
Change (%)
Amount
available as at
31 December
2024
Amount drawn
(%) as at 31
December 2024
Unsecured, revolving syndicated credit facility
-
-
-
5 898
-
Loans
1 980
2 272
(12.9)
3 521
+56.2
Bilateral bank loans
856
667
+28.3
4 294
+19.9
Debt securities
28
2 602
2 002
+30.0
2 600
+100.1
Total
5 438
4 941
+10.1
16 313
+33.3
As at 31 December 2024, 54% of the Group’s debt came from liabilities drawn in PLN, 45% in USD and 1% in CAD.
2.4.4 Evaluation of financial resources management
In 2024, the KGHM Polska Miedź S.A. Group was fully capable of meeting its obligations with respect to liabilities drawn.
The cash and cash equivalents held by the Group along with the external financing obtained ensure that liquidity will be
maintained and will enable the achievement of investment goals.
As at 31 December 2024, the Group held PLN 691 million of free cash and cash equivalents and had open credit lines for
total available financing in the amount of PLN 16 313 million, out of which PLN 5 438 million had been drawn.
In 2024, the Group continued activities aimed at ensuring long-term financial stability and optimising short-term sources of
financing.
Under the unsecured, syndicated credit facility, the two bilateral bank loans and the investment loans from the European
Investment Bank, the Group is obliged to maintain the financial covenant at a specified level. At the reporting day, during
the financial year and following the reporting date, up to the date of publication of this report, the level of reportable
financial covenant as at 30 June 2024 and 31 December 2024, met the conditions specified in agreements.
Table 35. Net debt / EBITDA of the Group
31 December
2024
31 December
2023
Change
(%)
30 September
2024
30 June
2024
31 March
2024
Net debt / Adjusted EBITDA
0.81
1.02
-20.6
0.86
0.72
1.42
28
The carrying amount of PLN 2 602 million includes the valuation, or interest accrued from the date of the last payment
of interest, i.e. from 27 December 2024 to 31 December 2024.
KGHM Polska Miedź S.A. 83
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.4.5 Loans granted by Group companies
As at 31 December 2024, the balance of receivables due to loans granted by the Parent Entity, in accordance with the
measurement pursuant to IFRS 9, amounted to PLN 9 973 million, while the balance of receivables due to loans granted by
the Group, in accordance with the measurement pursuant to IFRS 9, amounted to PLN 9 821 million.
Table 36. The most significant
29
loans granted by Group companies as at 31 December 2024
Lender
Borrower
Year granted
Total amount
of loans
Total balance of receivables due
to loans granted
30
Maturity date
Loans granted within the Group
KGHM Polska Miedź S.A.
KGHM INTERNATIONAL LTD.
2015-2024
USD 237 mn
USD 239 mn
PLN 978 mn
from 31.12.27
to 30.06.34
KGHM Polska Miedź S.A.
Future 1 Sp. z o.o.
2013-2016
USD 724 mn
USD 1 112 mn
PLN 4 562 mn
31.12.32
2017
PLN 7 mn
PLN 10 mn
31.12.32
KGHM Polska Miedź S.A.
Quadra FNX Holdings Chile
Limitada
2015-2017
USD 437 mn
USD 363 mn
PLN 1 489 mn
31.12.33
KGHM Polska Miedź S.A.
Quadra FNX FFI S.à r.l.
2017-2020
USD 453 mn
USD 656 mn
PLN 2 690 mn
31.12.32
Future 1 Sp. z o.o.
KGHM INTERNATIONAL LTD.
2012
USD 453 mn
USD 482 mn
PLN 1 978 mn
31.12.27
Future 1 Sp. z o.o.
Quadra FNX FFI S.à r.l.
2017
USD 1 419 mn
USD 1 556 mn
PLN 6 381 mn
15.12.32
KGHM INTERNATIONAL
LTD.
FNX Mining Company Inc.
2015
USD 140 mn
USD 215 mn
PLN 881 mn
on demand
Robinson Holdings USA
Ltd.
KGHM INTERNATIONAL LTD.
2018
USD 51 mn
USD 160 mn
PLN 656 mn
on demand, no
later than
30.06.28
Quadra FNX FFI S.à r.l.
Quadra FNX Holdings Chile
Limitada
2018-2020
USD 347 mn
USD 479 mn
PLN 1 965 mn
from 31.12.34
to 31.12.36
DMC Mining Services Ltd.
DMC Mining Services Chile
SpA
2021-2022
USD 14 mn
USD 16 mn
PLN 64 mn
on demand
FNX Mining Company Inc./
DMC Division
DMC Mining Services Ltd.
2019-2021
CAD 57 mn
CAD 57 mn
PLN 163 mn
on demand
KGHM Chile SpA
Minera Carizalillo SpA
2022
USD 9 mn
USD 9 mn
PLN 38 mn
on demand
Franke Holdings LTD
KGHM INTERNATIONAL LTD.
2022
CAD 23 mn
CAD 26 mn
PLN 73 mn
31.12.24
Loans granted to other entities
Quadra FNX FFI S.à r.l.
Sierra Gorda S.C.M.
2012
USD 1 700 mn
USD 2 390 mn
PLN 9 800 mn
31.12.2032
The following table presents significant loans granted in 2024 by the Parent Entity and Group companies, with the balance
of receivables due to loans granted as at the end of 2024 (reflecting accrued interest, redemption and measurement
pursuant to IFRS 9).
Table 37. Loans granted by the Parent Entity and Group companies in 2024
Lender
Borrower
Year granted
Total
amount of
loans
Total balance of
receivables due to loans
granted
31
Interest on
loans as at
31.12.2024
Maturity
date
Loans granted within the Group
KGHM POLSKA MIEDŹ S.A.
KGHM INTERNATIONAL
LTD.
2024
USD 30.6 mn
USD 29 mn
PLN 119 mn
SOFR+2.34%
31.08.29
KGHM POLSKA MIEDŹ S.A.
KGHM INTERNATIONAL
LTD.
2024
USD 17.5 mn
USD 17 mn
PLN 67 mn
5.50%
30.09.29
KGHM INTERNATIONAL
LTD.
Minera Carizalillo SpA
2024
USD 2.0 mn
USD 2.0 mn
PLN 9 mn
6.00%
31.12.27
KGHM INTERNATIONAL
LTD.
Minera Carizalillo SpA
2024
USD 2.5 mn
USD 16.0 mn
PLN 65 mn
7.00%
31.12.28
Quadra FNX FFI S.à r.l.
FNX Mining Company Inc.
2024
USD 3.0 mn
USD 3 mn
PLN 13 mn
6.00%
31.12.27
29
Balance of receivables over PLN 25 million
30
Including accrued, unpaid interest as at 31 December 2024
31
Including accrued, unpaid interest as at 31 December 2024
KGHM Polska Miedź S.A. 84
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.4.6 Cash pooling in the Group
In managing its financial liquidity, the Group utilises tools which support its efficiency. One of the instruments used by the
Group is the cash management service for a group of accounts - local cash pooling in PLN, USD and EUR and international
cash pooling in USD. The cash pooling is aimed at optimising cash management, limiting interest costs, the effective
financing of current needs in terms of working capital and supporting short term financial liquidity in the Group.
2.5 RESULTS OF THE SEGMENT KGHM POLSKA MIEDŹ S.A.
2.5.1 Production
The main goals set by the Management Board in terms of production and occupational health and safety for 2024 were:
− optimal utilisation of the resource base and of the production capacity of the Company, and
− optimisation of copper content in ore and concentrate.
The goals set required advancement of the following actions:
in mining
− expanding mining operations within the Deep Głogów (Głogów Głęboki-Przemysłowy) area,
− continuation of work related to exploration of the „Radwanice” and „Retków” copper ore deposits,
− improvement of the ore extraction technology, greater mining efficiency and improved occupational health and
safety, by:
− adapting the geometry of mining systems to local geological and mining conditions,
− improving the efficiency of technological and active methods of limiting the threat of rock bursts and of other
associated natural threats,
− proper barren rock management in mining areas (selective extraction, siting of rock, mechanical ore mining),
− construction of a prototype bolting rig for low workings with an automated bolting turret to be tested in 2025,
− continuing the search for battery-powered electric mining machines with the technical parameters required
for use in our mine conditions.
− a greater scope of work with respect to identifying gas-related threats and the use of new technical solutions
and means of prevention to counteract this threat,
− continued construction of the Central Air Conditioning Station at the GG-1 shaft with target capacity of 40 MW,
− installation of rigid reinforcement for the hoisting equipment of the GG-1 shaft, obtaining environmental
decisions for the realisation of the investment for the target period,
− development of the mine dewatering system,
− maintaining the efficiency of mining vehicles in an assortment required to execute production tasks along with
successive replacement of the machine park,
− implementation of the practical scope of preparatory and access work using the commissioning system at the
level of 59 thousand meters,
in ore
enrichment
− maintaining the production capacity of individual areas of the Concentrators Division Areas to the amount and
quality of ore supplied,
− maintaining the production of concentrates in an amount and quality necessary for optimal use of the
production capacity of the fire phases of the smelters and refineries,
− tests were conducted on flotation machinery of new construction under semi-industrial scale conditions,
dedicated to the recovery of small grains (RFC technology),
− the continuity of concentrate deliveries to the smelters continued despite the advancement of the
Modernisation of Railway Infrastructure on the terrain of KGHM, replacement of railway scales in the Area of
Rudna and Polkowice Concentrators,
− a warehouse was built for the storage of concentrate in the Rudna Concentrator area,
− improvements have been introduced in the coordination of maintenance work requiring shutdowns and in the
logistics of transport and storage of both ore and concentrate,
in metallurgy
− maintaining the share of imported concentrates and copper scrap accompanying the smelting of own
concentrates in order to carry out the planned high level of electrolytic copper production,
− planned maintenance carried out at the Głogów I Copper Smelter and Refinery,
− environmental impact was minimised by improving the efficiency of the dedusting and hermetic sealing of
processes and the optimisation of water and effluents management,
− optimal utilisation of infrastructure enabled the full execution of production tasks in terms of the main products,
− maintaining the share of recycling in copper production as a result of an increase in the processing of scrap in
the furnaces of the Głogów Copper Smelter and Refinery and maximisation of scrap processing in all fire phases
in the Legnica Copper Smelter and Refinery, in order to carry out the planned high level of electrolytic copper
production,
KGHM Polska Miedź S.A. 85
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
in occupational
health and
safety
− the mobilisation and increased engagement of all Company employees in the question of occupational health
and safety,
− consistent implementation of the Employee Safety Improvement Program – „Think About Consequences”,
− the implementation of agreed elements of the Program to eliminate the most common threats to workplace
safety through utilisation of innovative technology,
− constant monitoring of threats occurring in the workplace and the realisation of organisational and technical
goals aimed at limiting professional risks and accident rates,
− the commencement of additional organisational and technical initiatives aimed at improving workplace safety, in
particular with respect to the Company’s mines,
− continuous improvement of the occupational health and safety management system implemented by the
Company pursuant to the PN ISO 45000:2018 standard.
Mine production
In 2024, extraction of ore (dry weight) amounted to 30.6 million tonnes and was higher by 0.16 million tonnes than in 2023.
Average copper content in extracted ore amounted to 1.48% and was higher than the level achieved in 2023. In the case of
silver in ore, content amounted to 50.26 g/t and was slightly lower compared to the previous year.
As a result the amount of copper in extracted ore was higher than in 2023 by 6.1 thousand tonnes of copper and amounted
to 451.6 thousand tonnes. The volume of silver in ore increased by 2.8 tonnes to 1 537 tonnes.
In 2024, 30.6 million tonnes of ore (dry weight) were processed (131 thousand tonnes more compared to 2023). The higher
processing of ore with a higher copper content, extracted by the Mining Divisions, had a direct impact on the amount of
obtained copper in concentrate, which amounted to 400.1 thousand tonnes (4.7 thousand tonnes more compared to 2023).
The production of concentrate (dry weight) increased by 14.4 thousand tonnes compared to 2023.
The amount of silver in concentrate remained at a level similar to 2023.
Table 38. Mine production
Unit
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Mined ore (wet weight)
mn t
32.2
32.1
+0.3
7.7
8.1
8.2
8.3
Mined ore (dry weight)
mn t
30.6
30.4
+0.7
7.3
7.6
7.7
7.9
Copper grade
%
1.48
1.46
+1.4
1.48
1.46
1.49
1.48
Copper in ore
kt
451.6
445.5
+1.4
107.9
111.7
115.2
116.8
Silver grade
g/t
50.3
50.4
(0.2)
50.0
49.6
50.4
51.0
Silver in ore
t
1 537
1 534
+0.2
365
379
390
402
Production of concentrate
(dry weight)
kt
1 776
1 761
+0.9
432
436
455
452
Copper in concentrate
kt
400.1
395.4
+1.2
96.1
98.6
103.1
102.5
Silver in concentrate
t
1 318
1 320
(0.2)
316
323
337
343
Metallurgical production
The production of electrolytic copper as compared to 2023 decreased by 3.7 thousand tonnes, i.e. by 0.6% and reached the
second highest level in the history of KGHM, i.e. 588.7 thousand tonnes. Maintaining high cathode production, despite lower
process line availability due to the maintenance in the Głogów I Copper Smelter and Refinery, was possible due to the
optimal accumulation of anodes prior to the maintenance, the high processing of own concentrates and the utilisation of
purchased metal-bearing materials in the form of scrap and imported concentrate. Supplementing own concentrate with
purchased metal-bearing materials enabled the effective utilisation of existing technological capacity.
The production of metallic silver and gold compared to 2024 decreased by 87 tonnes for silver and 751 kilograms for gold
production. The lower production of metallic silver results from the availability of raw materials in the Precious Metals
Division.
The production of other metallurgical products derives from the level of electrolytic copper production and depends on the
type of raw material used and above all, on market demand.
KGHM Polska Miedź S.A. 86
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Table 39. Metallurgical production
Unit
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Electrolytic copper, including:
kt
588.7
592.4
(0.6)
147.5
148.7
146.3
146.2
- production from own concentrates
kt
383.7
385.5
(0.5)
99.5
90.9
98.2
95.1
- production from purchased
metal-bearing materials
kt
205.0
206.8
(0.9)
48.0
57.8
48.1
51.1
Wire rod, OFE and CuAg rod
kt
287.2
275.8
+4.1
66.4
74.8
71.1
74.9
Metallic silver
t
1 316
1 403
(6.2)
354
297
356
310
Metallic gold
koz t
86.8
111.0
(21.8)
22.6
19.4
24.7
20.1
Refined lead
kt
28.8
29.1
(1.0)
7.5
5.9
7.9
7.4
Main production goals
The main goals set by the Management Board in terms of production and occupational health and safety for 2025 are a
continuation of actions taken in 2024, i.e.:
− optimal utilisation of the resource base and of the production capacity of the Company, and
− optimisation of copper content in ore and concentrate.
Key tasks in 2025:
in mining
− access and development work to intersect the deposit in the Deep Głogów (Głogów Głęboki-Przemysłowy) and
Gaworzyce mining areas,
− continuation of work related to exploration of the „Radwanice” and „Retków” copper ore deposits,
− continuation of work related to prevention of gas-related threats (hydrogen sulphide and methane) and the use
of new technical solutions and means of prevention to counteract this threat,
− continuation of work related to utilising the capacity of the input and output ventilation shafts in the
interconnected mine ventilation system,
− maintaining the efficiency of mining vehicles in an assortment and quantity required to execute production
tasks,
− the consistent introduction of mining vehicles with low-emission engines and the continuation of work related to
introduction of zero-emission, electric and battery-powered mining vehicles,
− continued extension of the Central Air Conditioning Station at the GG-1 shaft with target capacity of 40 MW,
− expansion of the mine dewatering system,
− realisation of the planned scope of preparatory and access work using the commissioning system in 2025 at the
level of 59 thousand meters,
in ore
enrichment
− optimising the work of the drum driers by new-generation control systems,
− maintaining the availability of the machine park and the production capacity of individual Concentrators Division
Areas to the amount of ore supplied and to simultaneously-advanced investments,
− maintaining the quality of concentrate production to the optimal utilisation of smelter capacity,
− modernisation of the compressed air installation at the Lubin Region Concentrator – reduction of power
consumption,
− optimisation of water management,
− creating a concept for the use of a system of machines based on RFC technology in the technological layout of
the Polkowice Concentrator,
in metallurgy
− optimisation of the processing of recycled materials and scrap in all fire phases aimed at maximising the
production of electrolytic copper at the Legnica Copper Smelter and Refinery and at the Głogów Copper Smelter
and Refinery,
− maintaining the high level of electrolytic copper production by the Legnica Copper Smelter and Refinery and the
Głogów Copper Smelter and Refinery,
− further minimisation of environmental impact by actions directed towards improving the effectiveness of the
dedusting and hermetic sealing processes and optimisation of water-effluents management,
− optimum management of materials between the metallurgical facilities,
− continued work on the technological transformation of the Legnica Copper Smelter and Refinery,
− realisation of a project on converting electrolytic copper technology to permanent starter sheet technology,
in occupational
health and
safety
− ensuring safe and hygienic working conditions by implementing organisational, technical and behavioural
measures aimed at preventing injuries and occupational diseases,
− improving the identification and monitoring of hazards and the mitigation of risks in the working environment,
− implementation of technical solutions to balance changes in workplace conditions, in particular in mining,
− permanent improvement aimed at making employees more safety-conscious, including their habits, attitudes
and views, in particular awareness of causes and the consequences of their actions,
− consistent adaptation to changes in hygienic and biological standards,
− preparation for generational changes and the introduction of active solutions in age management,
− maintaining a certificate confirming conformance of the OHS Management System with the ISO 45001 standard,
− implementation of IT solutions in the area of workplace safety, including analysis of workplace data and
information.
KGHM Polska Miedź S.A. 87
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.5.2 Sales
In 2024, the level of sales of copper products by the Company was higher than that achieved in 2023 and amounted to
589.6 thousand tonnes, versus 584.7 thousand tonnes in the previous year. In 2024, sales of copper cathodes amounted
to 297.4 thousand tonnes, meaning a decrease by 2.9% compared to 2023. However, sales of copper wire rod and OFE rod
increased by 4.9%, amounting to 289.1 thousand tonnes in 2024.
Sales of metallic silver in 2024 amounted to 1 347 tonnes, meaning a decrease by 0.3% compared to volume in 2023. Sales
of gold in 2024 amounted to 90.7 thousand troy ounces.
Table 40. Sales volume of basic products of KGHM Polska Miedź S.A.
Unit
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Cathodes and cathodes parts
kt
297.4
306.3
(2.9)
75.6
71.9
69.2
80.7
Copper wire rod and OFE rod
kt
289.1
275.5
+4.9
66.6
71.4
73.9
77.2
Other copper products
kt
3.3
2.9
+10.3
0.8
0.8
0.8
0.9
Total copper and copper products
kt
589.6
584.7
+0.8
143.0
144.1
143.9
158.8
Metallic silver
t
1 347
1 352
(0.4)
347
321
343
336
Metallic gold
koz t
90.7
114.6
(20.9)
20.0
18.0
27.5
25.2
Refined lead
kt
31.7
25.6
+23.4
8.2
7.2
10.6
5.7
Total revenues from sales by KGHM Polska Miedź S.A. in 2024 amounted to PLN 29 894 million, representing an increase
by 3% versus 2023, when revenues amounted to PLN 29 084 million.
Revenues from sales of copper products in 2024 increased by 2% and amounted to PLN 22 789 million (compared to
revenues in 2023 at a level of PLN 22 290 million).
Revenues from metallic silver sales in 2024 increased by 12% to PLN 4 917 million, compared to PLN 4 389 million in 2023.
Revenues from sales of metallic gold in 2024 decreased to PLN 853 million, versus PLN 932 million in 2023 (-8%).
The increase in revenues from contracts with customers by PLN 810 million compared to the previous year was mainly due
to:
− an increase by PLN 2 432 million in revenues due to: higher prices of silver (+4.71 USD/oz t, +20%), gold
(+430 USD/oz t, +22%) and copper (+624 USD/t, +7%),
− a decrease by PLN 1 430 million in revenues from the sale of basic products (copper, silver, gold) due to a less-favourable
average annual USD/PLN exchange rate (a change from 4.20 to 3.98),
− a decrease by PLN 27 million in revenues due to a deviations in the sales volume of basic products: copper
(+4.9 thousand tonnes, +1%), silver (-5 tonnes, -0.4%) and gold (-23.9 thousand troy ounces, -21%),
− a change by -PLN 27 million in adjustments to revenues due to hedging transactions, from +PLN 635 million to
+PLN 608 million,
− a decrease by PLN 139 million in other revenues from sales, including revenues from the sale of merchandise
(-PLN 249 million).
Table 41. Revenues from contracts with customers of KGHM Polska Miedź S.A. (PLN million)
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Cathodes and cathodes parts
11 181
11 392
(1.8)
2 900
2 684
2 764
2 833
Copper wire rod and OFE rod
11 484
10 786
+6.5
2 698
2 798
3 138
2 850
Other copper products
124
112
+10.7
32
30
31
31
Total copper and copper products
22 789
22 290
+2.2
5 630
5 512
5 933
5 714
Metallic silver
4 916
4 389
+12.0
1 431
1 201
1 266
1 018
Metallic gold
853
932
(8.5)
213
174
258
208
Refined lead
285
264
+8.0
73
64
96
53
Other goods and services
653
562
+16.0
185
148
146
174
Merchandise and materials
397
647
(38.5)
101
87
97
112
Total revenues from contracts with
customers
29 894
29 084
+2.8
7 633
7 186
7 796
7 279
Geographical structure of sales
In 2024, KGHM Polska Miedź S.A. generated most of its revenues from domestic sales, which amounted to 25% of total
revenues. The remaining major customers of KGHM came from Germany (16%), China (9%), Czechia (8%), Italy (8%) and
Great Britain (6%).
The following chart shows the geographic structure of revenues in 2024. Sales revenue includes the result from the
settlement of hedging instruments.
KGHM Polska Miedź S.A. 88
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 22. Sales revenues of KGHM Polska Miedź S.A. by market (in PLN million)
2.5.3 Costs
The Company’s cost of sales, selling costs and administrative expenses (cost of products, merchandise and materials sold
plus selling costs and administrative expenses) in 2024 amounted to PLN 27 038 million and was 9.9% lower compared to
the corresponding period of 2023. The decrease in the value of the Company's cost of sales, selling costs and administrative
expenses was significantly affected by impairment losses on the Company's Polish production assets of PLN 2 806 million
made in December 2023.
After deducting the impact of impairment losses, cost of sales, selling costs and administrative expenses fell by 0.6%, mainly
influenced by the decline in the prices of energy factors and fuels.
Total expenses by nature for 2024 in relation to 2023 were lower by 11%, i.e. -PLN 3 230 million, of which -PLN 2 806 million
were impairment losses on the Company's Polish production assets made in December 2023. The decrease in expenses by
nature, net of impairment losses amounted to PLN 424 million (-2%), with a lower cost of purchased metal-bearing materials
used by PLN 273 million (a decrease in volume by 8 thousand tonnes of copper and a price higher by 0.5%) and a higher
minerals extraction tax by PLN 369 million (+11%) due to the increase in copper and silver prices and higher production of
copper from own concentrates.
Table 42. Expenses by nature of KGHM Polska Miedź S.A. (PLN million)
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Depreciation of property, plant and equipment and
amortisation of intangible assets
1 607
1 675
(4.1)
409
397
406
395
Employee benefits expenses
5 891
5 475
+7.6
1 650
1 473
1 478
1 290
Materials and energy, including:
11 650
12 955
(10.1)
2 743
2 912
2 962
3 033
- purchased metal-bearing materials
7 439
7 712
(3.5)
1 749
1 829
1 921
1 940
- electrical and other energy
1 699
2 224
(23.6)
319
462
453
465
External services
2 793
2 638
+5.9
823
660
674
636
Minerals extraction tax
3 865
3 496
+10.6
996
914
1 150
805
Other taxes and charges
686
632
+8.5
164
146
106
270
Other expenses
137
2 988
(95.4)
45
20
48
24
Total expenses by nature
26 629
29 859
(10.8)
6 830
6 522
6 824
6 453
Expenses by nature, excluding purchased metal-bearing materials, the minerals extraction tax, and impairment losses on
production assets amounted to PLN 15 325 million and were lower as compared to the corresponding expenses of the
previous year by PLN 520 million (-3%), mainly due to decreases in the following costs:
− consumption of materials and fuels (-PLN 507 million; -17%) - mainly due to lower fuel and process gas prices and lower
volume of consumption of technological materials,
− energy factors (-PLN 525 million; -24%) - mainly due to a lower purchase price of electricity and lower purchase volumes
with higher own power generation,
− depreciation and amortisation (-PLN 68 million; -4%) - a decrease results from a decline in the value of assets due to
impairment losses on the Company's Polish production assets made in December 2023.
− other expenses (-PLN 45 million; -25%) - decrease in representation and advertising expenses and lower write-downs
of inventories
at a higher cost of:
− labour (+PLN 416 million; +8%) - due to an increase in salary rates and a higher provision for the annual bonus with a
PLN 125 million lower revaluation of the provision for future employee benefits,
− external services (+PLN 155 million; +6%) - mainly due to an increase in service rates (e.g. indexed to the increase in
minimum wage) and an increase in maintenance costs (maintenance shutdown in the Głogów Copper Smelter and
Refinery),
− other taxes and charges (+PLN 54 million; +8.5%) - mainly due to higher costs of service charges, real estate tax and
fees for CO
2
emission allowances.
Poland
7 453
25%
Germany
4 716
16%
China
2 683
9%
Czechia
2 296
8%
Italy
2 400
8%
Great Britain
1 814
6%
Other countries
8 532
28%
KGHM Polska Miedź S.A. 89
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
The structure of expenses by nature in 2024 (excluding impairment losses on production assets) is presented below.
As compared to the prior year, it is at a very similar level.
Chart 23. Structure of expenses by nature in 2024 (excluding impairment losses on production assets)
Chart 24. Cost of producing copper in concentrate – C1 (USD/lb)
Cost of producing copper in concentrate - C1
32
amounted to, respectively, 2.98 USD/lb in 2023 and 3.07 USD/lb in 2024.
The 3% increase in cost was driven by an increase in the minerals extraction tax due to higher copper and silver prices and
the strengthening of the zloty against the US dollar. The cost value was positively affected by the valuation of by-products
due to higher silver and gold prices, higher copper production in own concentrates and lower costs of energy factors and
fuels.
Chart 25. Pre-precious metals credit unit cost of electrolytic copper production – from own concentrate (PLN/t)
The pre-precious metals credit unit cost of copper production from own concentrate
33
is higher than that recorded
in 2023 by 390 PLN/t (+0.9%). The increase in unit cost was mainly due to lower production from own concentrates by
2 thousand tonnes of copper, i.e. -0.5%. The total unit cost of copper production from own concentrate was lower compared
to 2023 by 1 614 PLN/t (-4.9%) with a higher valuation of anode slimes due to higher precious metals prices.
32
Unit cash cost of producing payable copper, reflecting ore mining and processing costs, transport costs, the minerals
extraction tax, administrative expenses during the mining phase and smelter treatment and refining charges (TC/RC) less
by-product value
33
Unit cost prior to decrease by the value of anode slimes containing among others silver and gold
Purchased metal-
bearing materials
28%
Costs of employee
benefits 22%
Minerals extraction
tax 15%
External services 10%
Materials and fuel 9%
Amortisation and
depreciation 6%
Electrical and other
energy 6%
Other taxes and charges 3%
1.99
2.10
1.72
2.12
1.84
1.95
0,99
0.91
1.28
1.12
1.19
1.12
2.98
3.01
3.00
3.24
3.03
3.07
2023 1Q'24 2Q'24 3Q'24 4Q'24 2024
Including the minerals
extraction tax
33 255
31 937
30 218
32 200
32 250
31 641
11 078
10 811
13 904
13 221
14 316
13 082
44 333 42 748 44 122 45 421 46 566 44 723
2023 1Q'24 2Q'24 3Q'24 4Q'24 2024
value of anode slimes
total unit cost of copper
production from own
concentrate
KGHM Polska Miedź S.A. 90
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.5.4 Statement of profit or loss
Table 43. Financial results of KGHM Polska Miedź S.A. (PLN million)
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Revenues from contracts with customers
29 894
29 084
+2.8
7 633
7 185
7 797
7 279
Cost of sales, selling costs and administrative
expenses
(27 038)
(30 004)
(9.9)
(6 981)
(6 652)
(6 627)
(6 778)
Profit on sales
2 856
(920)
×
652
533
1 170
501
Other operating income and (costs)
1 554
(230)
×
1 587
(611)
347
231
Finance income and (costs)
(425)
120
×
(251)
57
(109)
(122)
Profit before income tax
3 985
(1 030)
×
1 988
(21)
1 408
610
Income tax expense
(1 197)
(123)
×9.7
(404)
(106)
(464)
(223)
Profit/(loss) for the period
2 788
(1 153)
×
1 584
(127)
944
387
Adjusted EBITDA
4 463
3 563
+25.3
1 061
930
1 576
896
Table 44. Main factors impacting the change in profit or loss of KGHM Polska Miedź S.A.
Item
Impact on
change in
result (PLN
million)
Description
EBITDA
+900
The increase in operating result was due to:
− an increase in revenues from contracts with customers by PLN 810 million, as
described in more detail in section 2.5.2 Sales,
− a decrease in the level of expenses by nature (excluding depreciation/amortisation
and impairment losses on property, plant and equipment and intangible assets) by
PLN 354 million, as described in section 2.5.3 Costs,
− an increase in the change in products and work in progress by PLN 465 million
(+PLN 291 million in 2024; -PLN 174 million in 2023),
− a decrease in the value of merchandise and materials sold by PLN 197 million.
Impairment losses on
property, plant and
equipment and intangible
assets
+2 808
Including almost entirely (+PLN 2 806 million) resulting from the impairment test on the
mining and metallurgical assets, charged to the result for 2023.
Impairment losses on fixed
assets under construction
and intangible assets not
available for use
+964
Including almost entirely (+PLN 965 million) related to the impairment test on the
mining and metallurgical assets, charged to the result for 2023
Reversal of impairment
losses on shares in
subsidiaries
+496
An increase in the reversal of impairment losses on shares in subsidiaries from
PLN 827 million to PLN 1 323 million in both periods, related mainly to shares in
Future 1 Sp. z o.o.
Fair value gains/losses on
financial assets measured at
fair value through profit or
loss
(563)
Mainly relates to the change in the value of loans measured at fair value through profit
or loss
Exchange differences
+633
An increase in the result on exchange differences was affected by:
− a PLN 1 080 million higher result on exchange differences presented in other
operating income and costs (mainly due to loans),
− a PLN 447 million lower result on exchange differences from the measurement and
realisation of borrowings presented in finance income and costs (mainly exchange
differences on borrowings of KGHM Polska Miedź S.A.)
Income tax expense
(1 074)
Increase in income tax in the scope of:
− current income tax by PLN 361 million,
− deferred income tax by PLN 657 million,
− adjustment of current income tax for prior periods by PLN 56 million.
KGHM Polska Miedź S.A. 91
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 26. Change in the financial result of KGHM Polska Miedź S.A. in 2024 (PLN million)
2.5.5 Cash flows
Table 45. Cash flows of KGHM Polska Miedź S.A. (PLN million)
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Net cash generated from/(used in) operating activities
2 532
5 639
×0.4
420
(115)
2 422
(195)
Change in working capital
(1 222)
3 184
×
(522)
(687)
748
(761)
Net cash generated from/(used in) investing activities
(3 652)
(4 332)
×0.8
(901)
(756)
(755)
(1 240)
Net cash generated from/(used in) financing activities
3
(809)
×
(66)
(412)
(158)
639
Net cash flows
(1 117)
498
×
(547)
(1 283)
1 509
(796)
Exchange differences in cash and cash equivalents
3
(2)
×
-
2
1
-
Cash and cash equivalents at beginning of the period
1 481
985
×1.5
914
2 195
685
1 481
Cash and cash equivalents at the end of the period
367
1 481
×0.2
367
914
2 195
685
Net cash generated from operating activities in 2024 amounted to +PLN 2 532 million and mainly comprised:
− EBITDA of PLN 4 463 million,
− negative effect of the change in working capital of -PLN 1 222 million, including -PLN 1 007 million due to a change in
trade payables within the reverse factoring mechanisms,
− change in assets and liabilities due to derivatives +PLN 180 million,
− reclassification of other comprehensive income to profit or loss in connection with the realisation of hedging derivatives
- PLN 628 million,
− income tax paid, -PLN 406 million.
Net cash used in investing activities in 2024 amounted to -PLN 3 652 million and mainly comprised:
− expenditures on property, plant and equipment and intangible assets of the segment KGHM Polska Miedź S.A in the
amount of -PLN 3 635 million,
− expenditures and proceeds related to the granting and repayment of loans including interest of +PLN 248 million,
− expenditures on the acquisition of subsidiaries, -PLN 218 million.
Net cash flows generated from financing activities in 2024 in the amount of +PLN 3 million consisted mainly of:
− issuance of 7-year series C bonds in the amount of PLN 1 000 million and redemption of 5-year series A bonds in the
amount of PLN 400 million,
− the balance of borrowings drawn and repaid amounted to -PLN 167 million.
− dividend paid to shareholders of PLN 300 million,
− interest paid in the amount of PLN 259 million, including PLN 163 million on trade payables within the reverse factoring
mechanism, and
− proceeds from cash pooling in the amount of PLN 210 million.
After reflecting exchange differences on cash and cash equivalents, the balance of cash and cash equivalents decreased by
PLN 1 114 million and at the end of 2024 amounted to PLN 367 million.
-1 153
2 788
+964
+496
+633
+900
+2 808
-563
-1 074
-223
Loss for 2023 Change in
EBITDA
Impairment
losses on
property, plant
and equipment
and intangible
assets
Impairment
losses on fixed
assets under
construction
and intangible
assets not yet
available for
use
Reversal of
impairment
losses on
shares in
subsidiaries
Fair value
gains/losses
on financial
assets
measured at
fair value
through profit
or loss
Exchange
differences
Income tax
expense
Other Profit for
2024
KGHM Polska Miedź S.A. 92
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 27. Cash flows of KGHM Polska Miedź S.A. in 2024 (PLN million)
2.5.6 Assets
Table 46. Assets of KGHM Polska Miedź S.A. (PLN million)
31 December
2024
31 December
2023
Change
(%)
30 September
2024
30 June
2024
31 March
2024
Property, plant and equipment and
intangible assets
22 459
20 590
+9.1
21 619
21 003
20 815
Investments in subsidiaries
6 146
4 807
+27.9
4 909
4 919
4 919
Financial instruments, including:
11 405
11 119
+2.6
11 321
12 041
11 364
- loans granted
9 727
9 638
+0.9
9 872
10 526
10 045
Other non-financial assets
97
265
(63.4)
100
99
125
Non-current assets
40 107
36 781
+9.0
37 949
38 062
37 223
Inventories
7 037
7 506
(6.2)
7 075
7 239
6 822
Trade receivables
885
471
+87.9
1 037
966
1 121
Tax assets
396
932
(57.5)
271
298
577
Derivatives
219
760
(71.2)
310
406
591
Cash pooling receivables
683
424
+61.1
662
757
688
Other financial assets, including:
540
327
+65.1
601
574
570
- loans granted
Other non-financial assets
171
214
(20.1)
287
378
305
Cash and cash equivalents
367
1 481
(75.2)
914
2 195
685
Current Assets
10 298
12 115
(15.0)
10 995
12 663
11 215
TOTAL ASSETS
50 405
48 896
+3.1
48 944
50 725
48 438
At the end of 2024, the value of total assets in the separate statements amounted to PLN 50 405 million and was higher as
compared to 31 December 2023 by PLN 1 509 million. The main changes comprised:
− an increase in property, plant and equipment and intangible assets by PLN 1 869 million as a result of expenditure on
property, plant and equipment and intangible assets in the amount of PLN 3 635 million and depreciation/amortisation
of PLN 1 607 million,
− an increase in investments in subsidiaries by PLN 1 339 million, mainly due to a reversal of impairment losses on
FUTURE 1 Sp. z o.o.,
− an increase in the carrying amount of loans granted by PLN 262 million, including short-term loans by PLN 173 million
and long-term loans by PLN 89 million,
− a decrease in inventories by PLN 469 million, including mainly finished products by PLN 222 million and materials by
PLN 161 million,
− an increase in trade receivables by PLN 414 million, including receivables measured at amortised cost by PLN 119 million
and receivables measured at a fair value by PLN 295 million,
− a decrease in tax assets by PLN 536 million mainly related to the decrease in current income tax assets,
− a PLN 488 million decrease in derivatives mainly relates to the PLN 474 million decrease in foreign exchange derivatives
(USDPLN exchange rate) excluded from hedge accounting,
− a decrease in cash and cash equivalents by PLN 1 114 million.
Chart 28. Change in assets of KGHM Polska Miedź S.A. in 2024 (PLN million)
1 481
367
+2 532
+600
+210
-3 652
-167
-300
-259
-78
Cash and cash
equivalents as
at 1 January
2024
Net cash
generated from
operating
activities
Net cash used
in investment
activities
Redemption /
Issuance of
bonds
Borrowings
drawn/repaid
Dividend paid Interest repaid Cash pooling
proceeds
Other Cash and cash
equivalents as
at 31
December
2024
48 896
50 405
+1 869
+1 339
+262
+414
+232
-469
-536
-488
-1 114
Assets as at
31 December
2023
Property,
plant and
equipment
and intangible
assets
Investments
in
subsidiaries
Loans Inventories Trade
receivables
Tax assets Derivatives Cash Other Assets as at
31 December
2024
KGHM Polska Miedź S.A. 93
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.5.7 Equity and liabilities
Table 47. Equity and liabilities of KGHM Polska Miedź S.A. (PLN million)
31 December
2024
31 December
2023
Change
(%)
30 September
2024
30 June
2024
31 March
2024
Share capital
2 000
2 000
-
2 000
2 000
2 000
Other reserves from measurement of financial
instruments
(117)
320
×
(75)
88
91
Accumulated other comprehensive income
(636)
(921)
(30.9)
(786)
(752)
(853)
Retained earnings
29 907
27 419
+9.1
28 323
28 450
27 806
Equity
31 154
28 818
+8.1
29 462
29 786
29 044
Borrowings, leases and debt securities
4 655
4 508
+3.3
4 687
4 743
5 052
Derivatives
269
202
+33.2
182
228
173
Employee benefits liabilities
2 467
2 821
(12.5)
2 638
2 517
2 631
Provisions for decommissioning costs of mines
and other technological facilities
1 263
1 389
(9.1)
1 482
1 397
1 401
Deferred tax liabilities
460
328
+40.2
363
390
275
Other non-current liabilities
295
220
+34.1
254
212
213
Non-current liabilities
9 409
9 468
(0.6)
9 606
9 487
9 745
Borrowings, leases and debt securities
1 135
833
+36.3
1 114
1 090
877
Cash pooling liabilities
561
350
+60.3
441
551
551
Derivatives
44
499
(91.2)
243
266
419
Trade and other payables
4 825
6 065
(20.4)
5 277
6 018
4 791
Employee benefits liabilities
1 569
1 315
+19.3
1 378
1 372
1 403
Tax liabilities
786
405
+94.1
562
880
411
Provisions for liabilities and other charges
227
82
×2.8
155
140
117
Other current liabilities
695
1 061
(34.5)
706
1 135
1 080
Current liabilities
9 842
10 610
(7.2)
9 876
11 452
9 649
Non-current and current liabilities
19 251
20 078
(4.1)
19 482
20 939
19 394
TOTAL EQUITY AND LIABILITIES
50 405
48 896
+3.1
48 944
50 725
48 438
Equity and liabilities at the end of 2024 were higher by PLN 1 509 million, mainly due to:
− an increase in equity by PLN 2 336 million mainly as a result of profit for the period of +PLN 2 788 million and dividend
paid in the amount of -PLN 300 million, actuarial gains due to the measurement of benefits after the period of
employment of +PLN 352 million and a decrease in reserves from the measurement of financial instruments of
-PLN 446 million,
− a decrease in trade and other payables (non-current and current) by the total of PLN 1 241 million, mainly with regard
to trade payables within the reverse factoring mechanism by PLN 1 021 million,
− an increase in borrowings, cash pooling, leases and debt securities by PLN 660 million mainly as a result of an increase
in liabilities due to:
− bond debt of PLN 600 million (issuance of 7-year series C bonds in the amount of PLN 1 000 million and redemption
of 5-year series A bonds of PLN 400 million),
− cash pooling by PLN 211 million,
− bank loans by PLN 203 million
alongside a decrease in loans drawn of PLN 264 million,
− a decrease in derivatives (non-current and current) by PLN 388 million, mainly sold put options (USD/PLN) by
-PLN 473 million, including an increase in hedging instruments by +PLN 100 million,
− an increase in tax liabilities by PLN 381 million, including +PLN 277 million due to current income tax and
+PLN 104 million increase in liabilities due to other taxes (mainly due to the mineral extraction tax).
KGHM Polska Miedź S.A. 94
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 29. Change in equity and liabilities of KGHM Polska Miedź S.A. in 2024 (PLN million)
2.5.8 Investments
Total capital expenditures amounted to PLN 3 935 million and were 12% higher.
Table 48. Structure of expenditures on property, plant and equipment and intangible assets of KGHM Polska Miedź S.A.
(PLN million)
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Mining
3 017
2 689
+12.2
1 005
731
745
536
Metallurgy
714
594
+20.2
318
195
114
87
Other activities
48
36
+33.3
26
11
6
5
Development work - uncompleted
6
7
(14.3)
4
1
1
-
Leases per IFRS 16
101
98
+3.1
13
12
52
24
CO
2
emission allowances
49
50
(2.0)
23
26
-
-
Total
3 935
3 474
+13.3
1 389
976
918
652
including borrowing costs
209
173
+20.8
50
65
35
59
In 2024, capital expenditures on property, plant and equipment in the areas of mining, metallurgy and other activities and
development work - uncompleted, amounted to PLN 3 785 million, i.e. 12% higher than in the previous year. Investment
activities comprised projects related to the replacement of equipment, maintenance and development:
Projects related to replacement aimed at maintaining production equipment in an undeteriorated condition, represent
37% of total expenditures incurred.
Chart 30. Structure of expenditures on replacement in KGHM Polska Miedź S.A.
Projects related to maintenance aimed at maintaining mine production on the level set in approved Production Plan
(development of infrastructure to match mine advancement) represent 36% of total expenditures incurred.
+2 336
+660
+381
-1 240
-388
-240
48 896
50 405
Equity and
liabilities as at 31
December 2023
Equity Borrowings, cash
pooling, leases and
debt securities
Tax liabilities Trade payables Derivatives Other liabilities Equity and
liabilities as at 31
December 2024
Replacement of machine park in
mines; 32%
Major components and
significant maintenance; 25%
Other replacement of
infrastructure; 43%
KGHM Polska Miedź S.A. 95
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 31. Structure of expenditures on maintenance in KGHM Polska Miedź S.A.
Development projects aimed at increasing or maintaining the current level of revenues from sales, implementation of
technical and technological activities optimising use of existing infrastructure, decreasing operating costs, represent 25%
of total expenditures incurred.
Chart 32. Structure of expenditures on development in KGHM Polska Miedź S.A.
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.
Chart 33. Structure of expenditures on adaptation in KGHM Polska Miedź S.A.
For detailed information on the advancement of the main projects, see section 1.4.2 Advancement of the Strategy – key
achievements in individual strategic development directions.
Other; 6%
Outfitting of the mines; 57%
Main dewatering equipment and system at the
SW-4 shaft (UZ); 3%
Development of the Żelazny
Most Tailings Storage
Facility; 19%
Construction of the SW-4 shaft; 8%
Anti-filtration barrier; 7%
Deposit Access; 77%
Exploration of the resource base; 12%
Other; 7%
Introduction of a permanent starter sheet
technology in the Legnica Copper Smelter and
Refinery; 4%
Other; 57%
Construction of the copper concentrate storage
facility at the Rudna Concentrator; 24%
Modernisation of the mining geophysical station; 12%
Construction of a silver bar casting
station; 7%
KGHM Polska Miedź S.A. 96
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.5.9 Contingent assets and liabilities due to guarantees granted
As at 31 December 2024, contingent assets amounted to PLN 425 million and related mainly to promissory notes
receivables in the amount of PLN 275 million and guarantees received by the Parent Entity in the amount of PLN 148 million.
As at 31 December 2024, the Parent Entity held liabilities due to guarantees granted and letters of credit in the total amount
of PLN 2 015 million.
Detailed information regarding contingent assets and liabilities, including due to guarantees granted, may be found in notes
12.6 and 8.6 of the Financial statements.
As far as the Parent Entity is aware, at the end of the reporting period the Parent Entity determined the probability of paying
the amounts resulting from the contingent liabilities as low.
2.6 RESULTS OF THE SEGMENT KGHM INTERNATIONAL LTD.
2.6.1 Production
Table 49. Production of KGHM INTERNATIONAL LTD.
Unit
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Payable copper, including:
kt
60.5
39.9
+51.6
15.0
16.1
13.4
16.0
- Robinson mine (USA)
kt
55.9
31.5
+77.5
14.2
15.3
12.1
14.3
Payable nickel
kt
0.4
0.4
-
0.0
0.1
0.2
0.1
Precious metals (TPM), including:
koz t
53.5
40.6
+31.8
14.1
13.8
11.4
14.2
- Robinson mine (USA)
koz t
42.0
21.6
+94.4
11.4
12.1
8.3
10.2
- Sudbury Basin mines (Canada)
34
koz t
11.5
19.0
(39.5)
2.7
1.7
3.1
4.0
The increase in copper and precious metals production was primarily recorded by the Robinson mine, which in 2024
operated in a zone containing higher copper and gold ore grades than in 2023. The quality of the ore processed also
contributed to higher recovery of copper. In addition, it should be noted that for most of 2023, mining at the Robinson mine
was accompanied by a number of problems with the mining machinery fleet, which was not without impact on efficiency
of machinery and equipment utilisation and consequently low metal production levels.
2.6.2 Sales
Table 50. Volume and sales revenues of KGHM INTERNATIONAL LTD. (USD million)
Unit
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Revenues from contracts with
customers
35
, including:
USD mn
852
586
+45.4
260
252
208
132
- copper
USD mn
515
337
+52.8
152
160
133
70
- nickel
USD mn
7
8
(12.5)
1
1
3
2
- TPM – precious metals
USD mn
124
68
+82.4
49
38
23
14
Copper sales volume
kt
59.9
43.3
+38.3
18.6
18.8
13.8
8.7
Nickel sales volume
kt
0.4
0.4
-
0.0
0.1
0.2
0.1
TPM sales volume
koz t
53.4
42.1
+26.8
17.8
15.2
11.5
8.9
Table 51. Sales revenues of KGHM INTERNATIONAL LTD. (PLN million)
Unit
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Revenues from contracts with
customers
36
, including:
PLN mn
3 394
2 451
+38.5
1 048
985
836
525
- copper
PLN mn
2 055
1 409
+45.8
616
629
532
278
- nickel
PLN mn
27
33
(18.2)
2
4
13
8
- TPM – precious metals
PLN mn
493
284
+73.6
196
149
92
56
The significant increase in copper and TPM sales volumes is a result of improved production results in the Robinson mine.
In addition to higher volumes sold, the main drivers of the increase in revenues compared to 2023 include: more favourable
copper and gold prices and the higher range of mining services provided by DMC Group companies. The impact of individual
factors on an increase in revenues is discussed later in the Report.
34
McCreedy West mine in the Sudbury Basin
35
Reflects processing premium
36
Reflects processing premium
KGHM Polska Miedź S.A. 97
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.6.3 Costs
Cost of sales, selling costs and administrative expenses amounted to USD 602 million, i.e. 24% lower than the amount
recorded in 2023.
Table 52. C1 payable copper production cost of KGHM INTERNATIONAL LTD.
Unit
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Cost of sales, selling costs and administrative
expenses
USD mn
602
790
(23.8)
158
177
149
118
Cost of sales, selling costs and administrative
expenses
PLN mn
2 398
3 306
(27.5)
641
690
597
470
C1 payable copper production cost
37
USD/lb
1.52
4.15
(63.4)
1.14
1.47
1.68
2.17
The decrease in costs in relation to 2023 is primarily the result of the significantly higher scope of the access work being
carried out in the Robinson mine and therefore the higher capitalised stripping costs.
Table 53. Key factors affecting the change in the level of expenses by nature in relation to 2023
2024
2023
Change
(%)
Expenses by nature before changes
in inventories and capitalised
stripping costs, of which:
803
857
(6.2)
External services
157
146
+7.5
An increase mainly due to: transport costs and sales support
by KGHM Head Office services due to higher scope of sales
realised by Robinson. An increase in the range of projects
advanced by DMC.
Amortisation and depreciation
169
169
-
Materials, energy and fuels
181
204
(11.3)
First and foremost, lower maintenance costs for production
assets due to the renovation of the machinery park. In
addition, a decrease in fuel prices occurred compared to 2023.
Labour costs
256
222
+15.3
An increase in costs corresponding to higher scope of
production in Robinson and mining services at DMC
Taxes, charges and insurance
33
24
+37.5
Other costs, including:
8
92
(92.4)
A decrease in costs as a result of significantly lower write-
downs of copper concentrate inventories.
− impairment losses
recognised/(reversed) on property,
plant and equipment
(8)
2
x
− write-downs of inventories
14
88
(84.1)
Capitalised stripping costs and other
(179)
(42)
x 4.3
An increase in the scope of work to make the deposit available
for future mining in subsequent years. For most of 2023,
Robinson carried out a marginal amount of work, primarily
due to problems related to the mining machinery.
Change in inventories and work in
progress
(23)
(24)
(4.2)
Cost of sales, selling costs and
administrative expenses
602
791
(23.9)
In addition to the factors mentioned above, the C1 unit cost was significantly influenced by the increase in the volume of
copper sold (higher denominator), as well as the increase in the volume and price of gold (higher deductions for associated
metals).
37
C1 unit production cost of copper - cash cost of payable copper production, reflecting costs of ore extraction and
processing, the minerals extraction tax, transport costs, administrative expenses during the mining phase and smelter
treatment and refining charges (TC/RC) less by-product value
KGHM Polska Miedź S.A. 98
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.6.4 Financial results
Table 54. Financial results of KGHM INTERNATIONAL LTD. (USD million)
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Revenue from contracts with
customers
852
586
+45.4
260
252
208
132
Cost of sales, selling costs and
administrative expenses
38
, including:
(602)
(791)
(23.9)
(174)
(161)
(149)
(118)
(recognition)/reversal of impairment
losses on non-current assets
8
(2)
x
(1)
13
(4)
-
Profit/loss on sales
250
(205)
x
86
91
59
14
Profit/loss for the period
317
(269)
x
385
59
(105)
(22)
Amortisation/depreciation
(169)
(169)
-
(39)
(40)
(42)
(48)
Adjusted EBITDA
411
(34)
x
126
118
105
62
Table 55. Financial results of KGHM INTERNATIONAL LTD. (PLN million)
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Revenues from contracts with
customers
3 394
2 451
+38.5
1 048
985
836
525
Cost of sales, selling costs and
administrative expenses
39
, including:
(2 398)
(3 306)
(27.5)
(701)
(630)
(597)
(470)
- (recognition)/reversal of impairment
losses on non-current assets
27
(7)
x
(8)
50
(15)
0
Profit/loss on sales
996
(855)
x
347
355
239
55
Profit/loss for the period
1 283
(1 120)
x
1 553
236
(417)
(89)
Amortisation/depreciation
(674)
(706)
(4.5)
(159)
(155)
(168)
(192)
Adjusted EBITDA
1 643
(142)
x
514
460
422
247
Table 56. Key factors impacting the change in financial result of KGHM INTERNATIONAL LTD.
38
Cost of products, merchandise and materials sold, selling costs and administrative expenses
39
Cost of products, merchandise and materials sold, selling costs and administrative expenses
Item
Impact on
change in
result (USD
million)
Description
Adjusted EBITDA
+445
+USD 266 million increase in revenue, primarily as a result of higher sales volumes of copper (+USD
151 million) and gold (+USD 45 million), increased metal prices (+USD 32 million) and higher revenue
from mining services provided by DMC (+USD 41 million)
+USD 179 million – lower costs charged to adjusted EBITDA, mainly due to an increase in the scope
of stripping works and the associated higher capitalised stripping costs (+USD 137 million). In
addition, write-downs of inventories were lower than in 2023 (+USD 74 million),
Result on other
operating and
financing
activities
+290
+USD 246 million – profits on modification of terms of the agreement (the extension of maturities of
loans granted in prior years to finance Sierra Gorda S.C.M.). In 2023, there were no such profits.
+USD 29 million – reversals of impairment losses on financial instruments of USD 55 million against
USD 26 million at the end of 2023 – relates to POCI loans (loans granted to Sierra Gorda)
+USD 60 million – an impairment loss on other assets of -USD 3 million (-USD 75 million at the end
of 2023) against a reversal of an impairment loss of +USD 1 million (+USD 13 million at the end of
2023). Refers to fixed assets under construction and intangible assets not yet available for use.
-USD 45 million – other, including higher finance costs due to increased borrowings (increase in
interest costs on loans, -USD 28 million)
Income tax
expense
(158)
-USD 20 million – change in current income tax
-USD 138 million – change in deferred income tax
Other
+9
A reversal of impairment loss on property, plant and equipment of +USD 7 million versus an
impairment loss of -USD 2 million in 2023.
KGHM Polska Miedź S.A. 99
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Chart 34. Change in profit/(loss) for the period of KGHM INTERNATIONAL LTD. (USD million)
2.6.5 Cash expenditures
Table 57. Cash expenditures of KGHM INTERNATIONAL LTD. (USD million)
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Victoria project
104
70
+48.6
41
25
18
20
Stripping and other
306
165
+85.5
63
108
73
62
Total
410
235
+74.5
104
133
91
82
Table 58. Cash expenditures of KGHM INTERNATIONAL LTD. (PLN million)
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Victoria project
414
293
+41.3
165
97
72
80
Stripping and other
1 222
690
+77.1
259
423
291
249
Total
1 636
984
+66.3
424
520
363
329
The increase in cash expenditures of KGHM INTERNATIONAL LTD. compared to 2023 is primarily due to the higher scope
of access work at the Robinson mine.
2.7 RESULTS OF THE SEGMENT SIERRA GORDA S.C.M.
The segment Sierra Gorda S.C.M. is a joint venture owned by the KGHM Polska Miedź S.A. Group. (55%) and the Australian
mining group South32 (45%).
The following production and financial data are presented on a 100% basis for the joint venture and proportionally to the
interest in the company Sierra Gorda S.C.M. (55%), pursuant to the methodology of presentation of data in the note of the
consolidated financial statements concerning the operating segments.
2.7.1 Production
Table 59. Production of copper, molybdenum and precious metals by Sierra Gorda S.C.M.
40
Unit
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Copper production
kt
146.4
143.0
+2.4
42.5
39.0
34.0
30.9
Copper production – segment (55%)
kt
80.5
78.7
23.4
21.4
18.7
17.0
Molybdenum production
mn lb
6.0
6.3
(4.8)
2.3
2.0
0.8
0.9
Molybdenum production – segment
(55%)
mn lb
3.3
3.5
1.3
1.1
0.4
0.5
TPM production – gold
koz t
60.1
59.8
+0.5
18.0
17.2
13.0
11.9
TPM production – gold -segment (55%)
koz t
33.1
32.9
9.9
9.4
7.2
6.5
In 2024, Sierra Gorda S.C.M. realised copper production at a level 2% higher than in 2023, as a result of processing a higher
volume of ore, with higher copper content.
The main factor affecting molybdenum production volumes in 2024 was the quality of the ore processed resulting in a
decrease in molybdenum recovery. The mine took measures to maintain an optimum level of recovery, which helped to
improve the production result in the second half of the year. Nevertheless, payable molybdenum production throughout
2024 was lower than planned for the period and realised in 2023.
40
Payable metal in concentrate
-269
317
+445
+290
+9
-158
Loss for 2023 Change in adjusted
EBITDA
Result on other operating
and financing activities
Income tax expense Other Profit for 2024
KGHM Polska Miedź S.A. 100
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.7.2 Sales
Revenues from sales in 2024 amounted to USD 1 623 million (on a 100% basis), or PLN 3 556 million respectively to the 55%
interest held by KGHM Polska Miedź S.A.
Table 60. Sales volume and revenues of Sierra Gorda S.C.M.
Unit
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Revenues from contracts with
customers
41
, including from the
sale of:
USD mn
1 623
1 443
+12.5
462
438
414
309
- copper
USD mn
1 295
1 164
+11.3
346
364
342
243
- molybdenum
USD mn
135
128
+5.5
53
21
26
35
- TPM (gold)
USD mn
152
120
+26.7
51
43
34
24
Copper sales volume
kt
147.4
146.5
+0.6
44.3
39.8
34.1
29.2
Molybdenum sales volume
mn lb
6.4
5.8
+10.3
2.4
0.9
1.3
1.8
TPM (gold) sales volume
koz t
60.6
61.1
(0.8)
18.7
17.3
13.1
11.5
Revenues from contracts with
customers
42
- segment
(55% share)
PLN mn
3 556
3 319
+7.1
1 028
938
911
679
The 12% increase in revenues (in USD) as compared to the level recorded in 2023 is primarily the result of an upswing on
the metals market, reflected in an increase in realised sales prices for copper, gold and silver.
The detailed impact of individual factors on changes in revenues is presented in section 2.7.4 Financial results.
2.7.3 Costs
Costs of sales, selling costs and administrative expenses amounted to USD 1 154 million, while proportionally to the interest
held (55%), segment costs amounted to PLN 2 529 million.
Table 61. Cost of sales, selling costs and administrative expenses and production cost of payable copper (C1) of Sierra Gorda
S.C.M.
Unit
2024
2023
Change
(%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Costs of sales, selling costs and administrative
expenses (prior to the reversal of impairment
loss - refers to 2023)
USD mn
1 154
1 089
+6.0
335
294
285
240
Reversal of impairment loss on non-current
assets
USD mn
-
101
(100.0)
-
-
-
-
Costs of sales, selling costs and administrative
expenses (prior to the reversal of impairment
loss - refers to 2023
PLN mn
2 529
2 505
+1.0
745
630
627
527
Reversal of impairment loss on non-current
assets
PLN mn
-
219
(100.0)
-
-
-
-
C1 payable copper production cost
43
USD/lb
1.60
1.68
(4.8)
1.12
1.68
1.88
1.90
41
Reflecting treatment/refining and other charges
42
Reflecting treatment/refining and other charges
43
C1 unit production cost of copper - cash cost of payable copper production, reflecting costs of ore extraction and processing, the
minerals extraction tax, transport costs, administrative expenses during the mining phase and smelter treatment and refining charges
(TC/RC) less by-product value
KGHM Polska Miedź S.A. 101
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
An increase of USD 65 million (+6%) in costs of sales, selling costs and administrative expenses was recorded as compared
to 2023:
Table 62. Key factors affecting the change in the level of expenses by nature as compared to 2023
2024
2023
Change
(%)
Expenses by nature before a change in
inventories and capitalised stripping costs, of
which:
1 442
1 390
+3.7
External services
291
279
+4.3
Higher scope of completed maintenance services and
lease of mining machinery
Amortisation/depreciation
388
335
+15.8
The increase relates to non-current assets, with a
similar level of costs in 2023 in relation to depreciation
due to stripping
Materials and fuel
207
201
+3.0
Increase in costs mainly due to higher consumption of
flotation materials and explosives and an increase in
fuel consumption due to increased mining.
Spare parts
85
81
+4.9
Higher wear and tear of spare parts due to the extent
of repairs carried out at the Ore Processing Plant
Energy
205
196
+4.6
Reduced scope of energy resale
Labour costs
117
161
(27.3)
In 2023, bonus payments resulting from wage
agreements were realised. No such costs occurred in
2024.
Selling costs
77
74
+4.1
Increased costs due to higher sales, with lower
maritime transport costs.
Other costs
72
63
+14.3
Mainly higher costs related to consultancy on projects
advanced by the company and higher IT costs
Capitalised stripping costs
(314)
(293)
+7.2
Increase in scope of access works completed
Change in inventories and work in progress
26
(8)
x
Increased use of ore from inventories
Costs of sales, selling costs and
administrative expenses
1 154
1 089
+6.0
The 2023 costs do not take into account the reversal of
impairment loss on property, plant and equipment
Despite the increase in costs of external services, materials and fuels, and also spare parts and energy, C1 unit cost is 5%
lower than that achieved in 2023, as a result of the increase in revenues from molybdenum and gold sales, lower smelter
treatment and refining charges (TC/RC) and higher copper sales volumes.
2.7.4 Financial results
Adjusted EBITDA for 2024 amounted to USD 856 million, of which proportionally to the interest held (55%) PLN 1 877 million
is attributable to the KGHM Group.
Table 63. Results of Sierra Gorda S.C.M. in USD million (on a 100% basis)
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Revenues from contracts with customers
1 623
1 443
+12.5
462
438
414
309
Cost of sales, selling costs and administrative
expenses (prior to the reversal of
impairment loss - refers to 2023)
(1 154)
(1 089)
+6.0
(335)
(294)
(285)
(240)
Reversal of impairment loss on non-current
assets
-
101
(100.0)
-
-
-
-
Profit/loss on sales
469
455
+3.1
127
144
129
69
Profit/loss for the period
99
36
x 2.8
52
28
27
(8)
Amortisation/depreciation
(387)
(335)
+15.5
(122)
(96)
(87)
(82)
Adjusted EBITDA
856
689
+24.2
249
240
216
151
Table 64. Results of the segment Sierra Gorda S.C.M. proportionally to the interest held (55%) in PLN million
2024
2023
Change (%)
4Q 2024
3Q 2024
2Q 2024
1Q 2024
Revenues from contracts with customers
3 556
3 319
+7.1
1 028
938
911
679
Cost of sales, selling costs and administrative
expenses (prior to the reversal of
impairment loss - refers to 2023)
(2 529)
(2 505)
+1.0
(745)
(630)
(627)
(527)
Reversal of impairment loss on non-current
assets
-
219
(100.0)
-
-
-
-
Profit/loss on sales
1 027
1 033
(0.6)
283
308
284
152
Profit/loss for the period
218
68
x 3.2
115
62
58
(17)
Amortisation/depreciation
(850)
(770)
+10.4
(272)
(207)
(191)
(180)
Adjusted EBITDA
1 877
1 584
+18.5
555
515
475
332
KGHM Polska Miedź S.A. 102
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
In the functional currency (USD), adjusted EBITDA is 24% higher than the amount recorded in 2023, while following the
conversion into PLN, the deviation amounted to 19% due to the USD/PLN exchange rate adopted for conversion purposes
in both periods (appreciation of PLN). The impact of the main factors on the increase in EBITDA and profit/loss for the
period is presented in the summary below.
Table 65. Main factors impacting the change in the financial result of the segment Sierra Gorda S.C.M.
Chart 35. Change in profit/loss for the period (USD million)
2.7.5 Cash expenditures
Cash expenditures presented in the statement of cash flows of Sierra Gorda S.C.M. amounted to USD 512 million
(PLN 1 123 million for the KGHM Group’s share) and were 7% higher than those incurred in 2023. More than a half of the
expenditures were incurred on stripping to gain access to further areas of the deposit, and the remainder related to the
development and replacement of property, plant and equipment.
Table 66. Cash expenditures of Sierra Gorda S.C.M.
Unit
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Cash expenditures on property,
plant and equipment
USD mn
512
481
+6.4
134
118
115
145
Cash expenditures on property,
plant and equipment – segment
(55% share)
PLN mn
1 123
1 106
+1.5
301
250
253
319
The 6% increase in expenditures for the year related primarily to replacement of assets and, to a lesser extent, capitalised
stripping costs.
Cash flows generated from operating activities amounted to USD 764 million, and completely covered cash expenditures
and expenditure on partial repayment of debt plus interest on the Owners’ loan for the construction of the mine.
In 2024, the loan repayments amounted to USD 210 million, of which USD 116 million is attributable to the KGHM Group
(in 2023, these expenses amounted to, respectively: USD 70 million and USD 39 million).
36
99
+167
+18
+32
-154
Profit for 2023 Change in adjusted
EBITDA
Change in result on other
operating and financing
activities
Income tax expenses Other Profit for 2024
Item
Impact on
change in
result
(USD million)
Description
Adjusted EBITDA
+167
+USD 180 million - an increase in revenues due to more favourable market conditions
(+USD 125 million including Mark to Market valuation) and more favourable refining premiums
(+USD 27 million), and an increase in sales volumes of metals (+USD 27 million)
-USD 13 million – an increase in costs before depreciation/amortisation
Result on other
operating and
financing
activities
+18
+USD 9 million - higher foreign exchange gains
+USD 19 million - impairment loss on fixed assets under construction below USD 1 million versus
USD 19 million at the end of 2023
-USD 10 million - other
Income tax
expense
+32
+USD 42 million - change in income tax
-USD 10 million - higher mining tax
Other
(154)
-USD 53 million - increase in costs of depreciation/amortisation
-USD 101 million - no reversal of impairment loss in 2024
KGHM Polska Miedź S.A. 103
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.8 RESULTS OF OTHER SEGMENTS
Companies in the other segments are very diversified in their operations. They include companies supporting the core
production business and others of a non-operating nature or playing an important role in fulfilling the policy of corporate
social responsibility.
2.8.1 Revenues
Table 67. Revenues from contracts with customers of companies within the KGHM Group – excluding intra-segment
revenues (in PLN million)
From external customers
From KGHM Polska Miedź SA
TOTAL
Revenue from contracts with
customers
2024
2023
Change
%
2024
2023
Change
%
2024
2023
Change
%
Metraco S.A.
194
233
(16.7)
5 407
5 132
+5.4
5 601
5 365
+4.4
Mercus Logistyka Sp. z o.o.
50
52
(3.8)
1 257
1 144
+9.9
1 307
1 196
+9.3
PeBeKa S.A.
-2
-7
(71.4)
1 048
1 146
(8.6)
1 046
1 139
(8.2)
KGHM ZANAM S.A.
76
77
(1.3)
846
784
+7.9
922
861
+7.1
Energetyka Sp. z o.o.
94
109
(13.8)
731
806
(9.3)
825
915
(9.8)
Centrozłom Wrocław S.A.
663
638
+3.9
3
5
(40.0)
666
643
+3.6
NITROERG S.A.
293
279
+5.0
216
223
(3.1)
509
502
+1.4
Miedziowe Centrum Zdrowia S.A.
324
277
+17.0
43
39
+10.3
367
316
+16.1
WPEC S.A. w Legnicy
333
330
+0.9
10
9
+11.1
343
339
+1.2
POL-MIEDŹ TRANS Sp. z o.o.
75
68
+10.3
185
186
(0.5)
260
254
+2.4
Other
611
608
+0.5
453
447
+1.3
1 064
1 055
+0.9
TOTAL
2 711
2 664
+1.8
10 199
9 921
+2.8
12 910
12 585
+2.6
Information on the activities of the Group’s main companies may be found in section 1.3.2 Our assets.
2.8.2 Financial results
Table 68. Financial results of the segment – other segments (PLN million)
2024
2023
Change (%)
4Q
2024
3Q
2024
2Q
2024
1Q
2024
Sales revenue
12 910
12 585
+2.6
3 350
3 157
3 416
2 987
- including from external clients
2 711
2 664
+1.8
678
639
695
699
Profit/loss on sales
2
64
(96.9)
-98
-1
105
-4
Profit/loss for the period
-50
28
×
-118
-6
84
-10
Depreciation/amortisation recognised in profit or loss
-258
-295
(12.5)
-18
-81
-79
-80
Adjusted EBITDA
474
357
+32.8
141
73
184
76
In 2024, other segments recorded a loss for the period in the amount of -PLN 50 million, or a deterioration as compared to
2023 by PLN 78 million (the profit for 2023 amounted to PLN 28 million). The profit/loss for the period is comprised of
profits/losses of individual companies of the KGHM Group after eliminating turnover between companies within the
segment.
The highest profit/loss on sales was achieved by the following Companies: Miedziowe Centrum Zdrowia S.A.
(PLN 90 million), NITROERG S.A. (PLN 43 million), Energetyka Sp. z o.o. (PLN 40 million), KGHM ZANAM S.A. (PLN 36 million)
and PeBeKa S.A. (PLN 18 million). The worst results were recorded by POL-MIEDŹ TRANS Sp. z o.o. (-PLN 183 million),
Zagłębie Lubin S.A. (-PLN 27 million) and Centrozłom Wrocław S.A. (-PLN 26 million). The adjustment of profit/loss on sales
due to intra-segment turnover (i.e. between subsidiaries) amounts to approximately PLN 162 million, meaning a surplus of
intra-segment revenues over costs, including manufacturing costs.
KGHM Polska Miedź S.A. 104
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
2.8.3 Cash expenditures
The total cash expenditures of other segments in 2024 amounted to approx. PLN 613 million, compared to approx.
PLN 581 million in 2023.
Table 69. Cash expenditures – acquisition of intangible assets and property, plant and equipment (in PLN million)
Company within the KGHM
Group
Amount
Main investment expenditures
PeBeKa S.A.
99
Mainly investments on the replacement of heavy mining and auxiliary machinery and other
equipment and machinery.
WPEC S.A. w Legnicy
95
Mainly a development investment in the modernisation of heat supply system in Legnica.
Energetyka Sp. z o.o.
69
Among others, a development investment in the construction of a landfill site in Legnica, a
modernisation investment in acid waste water retention tanks and other replacement
investments.
PMT Linie Kolejowe Sp. z o.o.
60
Modernisation of Railway Infrastructure
POL-MIEDŹ TRANS Sp. z o.o.
57
Replacement-related investment on repair of rail carriages.
KGHM ZANAM S.A.
33
Mainly replacement-related investments of self-propelled mining machines.
Other
200
TOTAL
613
KGHM Polska Miedź S.A. 105
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
3 CORPORATE GOVERNANCE STATEMENT
3.1 INDICATION OF LEGAL BASIS AND COLLECTION OF CORPORATE GOVERNANCE PRINCIPLES AND
THE SCOPE OF THEIR APPLICATION
The following Statement on the application of Corporate Governance was prepared in accordance with § 70 sec. 6 point 5)
of the Regulation of the Minister of Finance dated 29 March 2018 on current and periodic information published by issuers
of securities and conditions for recognising as equivalent information required by the laws of a non-member state.
KGHM Polska Miedź S.A., a company listed on the Warsaw Stock Exchange S.A., in the period from 1 January 2024 to 31
December 2024, complied with the corporate governance principles set forth in the document “Best Practice for GPW Listed
Companies 2021” (hereinafter DPSN 2021), which was adopted by the Exchange Board on 29 March 2021 by Resolution No.
13/1834/2021. The text of the principles is available on the official website of the Warsaw Stock Exchange dedicated to this
subject https://www.gpw.pl/best-practice2021 and on the corporate website of KGHM Polska Miedź S.A. in the corporate
governance section https://kghm.com/en/investors/corporate-governance.
In order to increase interest in the topic of corporate governance and shareholder involvement in corporate affairs, the
Warsaw Stock Exchange has created a benchmarking exercise for companies that have provided information on the current
status of application of the DPSN 2021 principles via the EBI system. The COMPLY factor used for this purpose was defined
as a ratio of principles used to the total number of principles used and not used (“not applicable” responses are not included
in the calculation). KGHM Polska Miedź S.A. applies the principles of the DPSN 2021 at a comparable level as declared by
the companies included in the WSE index (WIG20, mWIG40 or sWIG80), or taking into account all companies that have
published a report (general index).
KGHM Polska Miedź S.A. is continually engaged in adapting to current trends in corporate governance and to market
expectations, such as those expressed in DPSN 2021. KGHM Polska Miedź S.A. strives at every stage of its operations to
apply the principles contained in the contents of the DPSN 2021 to the greatest possible extent, taking into account the
principles of proportionality and adequacy and the specific nature of the industry.
Throughout 2024, KGHM Polska Miedź S.A. did not publish any changes in the status of application of the DPSN 2021
principles in relation to the status of application contained in the “Corporate Governance Statement” representing a
separate part of “The Management Board’s Report on the activities of KGHM Polska Miedź S.A. and the KGHM Polska Miedź
S.A. Group in 2023”.
As part of increasing the level of compliance with corporate governance principles and in fulfilment of the disclosure
obligations of listed companies with respect to the application of corporate governance rules set out in § 29 sec. 3 of the
Stock Exchange Regulations, on 13 March 2025 it published the updated “Information on the status of the application by
the company of the principles contained in the Code of Best Practice for GPW Listed Companies 2021”. The update of the
declaration "the principle is not applied" and "the principle is applied" concerned the following principles:
− 1.4.1 which reads as follows: “In order to ensure proper communication with stakeholders, in terms of the adopted
business strategy, the company provides information on its website on the elements of the strategy, measureable goals,
including especially long-term goals, planned actions and progress in this regard, defined with the aid of financial and
non-financial measures. Information on the strategy should among others explain how the decision-making processes
of the company and its group members integrate climate change, including the resulting risks.”
− 3.3 which reads as follows: “A company participating in the WIG20, mWIG40 or sWIG80 indices appoints an internal
auditor to head the internal audit function in compliance with generally accepted international standards for the
professional practice of internal auditing. In other companies which do not appoint an internal auditor who meets such
requirements, the audit committee (or the supervisory board if it performs the functions of the audit committee)
assesses on an annual basis whether such a person should be appointed.”
− 3.4 which reads as follows: “The remuneration of persons responsible for risk and compliance management and of the
head of internal audit should depend on the performance of delegated tasks rather than short-term results of the
company.”
The aforementioned update of the status of DPSN2021 application took place in connection with the update and change of
corporate documents related to the operation of internal audit in KGHM Polska Miedź S.A. and the content of information
posted on the corporate website. The company has implemented the aforementioned principles and has achieved the
compliance with the Best Practice for GPW Listed Companies 2021 in this respect. Moreover, the Company has also
updated its declaration regarding the explanation of non-application of the following principles: 1.3.1., 1.3.2., 2.1., 2.2,
2.11.6., 4.1., 6.4.
Consequently, as at the date of preparation of the Corporate Governance Statement, KGHM Polska Miedź S.A. increased its
COMPLY factor by 5 percentage points in relation to the Corporate Governance Statement contained in the Report of The
Management Board’s Report on the Activities of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group in 2023.
KGHM Polska Miedź S.A. 106
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Diagram 16. COMPLY ratio by KGHM Polska Miedź S.A.
Diagram 17. Corporate governance structure in KGHM Polska Miedź S.A.
3.2 INFORMATION POLICY AND COMMUNICATION WITH INVESTORS
KGHM Polska Miedź S.A., under the principles indicated in section 1 of DPSN 2021, strives to achieve the goal of
ensuring quality investor communications and pursuing a transparent and fair disclosure policy In the interest of
all market participants and its own interest.
3.2.1 Description of the application of DPSN 2021
Table 70. The principles of Section I of DPSN 2021 applied in KGHM Polska Miedź S.A. - Disclosure policy and
communication with investors
1.1 The Company maintains efficient communications with capital market participants and provides fair information about
matters that concern them. For that purpose, the Company uses diverse tools and forms of communication, including in
particular the corporate website where it publishes all information relevant for investors.
The principle is applied.
KGHM Polska Miedź S.A., as a listed company, regularly publishes on its website under the tab Investors | KGHM Polska Miedź S.A.
Corporate website up-to-date and key information relevant to investors and others concerning issues related to broader corporate
governance. The website’s structure is transparent and enables the rapid and intuitive location of all important information by creating
a separate section on Corporate Governance | KGHM Polska Miedź S.A. Corporate website.
KGHM Polska Miedź S.A. is aware of the importance of effective and efficient communication with current and potential shareholders
and other capital market participants (e.g. investors, market analysts, the Warsaw Stock Exchange, the Polish Financial Supervision
Authority), and consequently operates under a model of active communication to enable access to complete, and the most important,
data about the Company, planned events and all other questions of importance to them. In advancing this goal, the Company has a
separate section dedicated to Investor relations. This section is updated on an ongoing basis with vital information and documents. The
Investors tab includes among others regulatory filings and periodic reports, information on the shareholder structure, documents
connected with general meetings, corporate governance, macroeconomic bulletins and also presentations and video material.
Another form of communication with the market is the KGHM Investor Relations page on LinkedIn and the RSS (Really Simple
Syndication) channel. The five subject channels operating under RSS enables information to be received using mobile technology
regarding the Company’s operations, current market information, the type and scope of activities engaged in and product offers for the
entire market. Taking into consideration the proper meeting or requirements set by the participants of the regulated market, KGHM
Polska Miedź S.A meets its informational obligations arising from laws in force and other requirements (e.g. the Warsaw Stock Exchange
Rules).
To satisfy investor expectations, the Company provides the following information on its website, among others:
78%
78%
79%
79%
85%
+6pp
KGHM as at the date of preparation of the report
KGHM as at 31 December 2024
KGHM as at 31 December 2023
WIG 20 indicator
general indicator
KGHM Polska Miedź S.A. 107
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
− basic corporate documents, in particular such as the Company’s statutes, bylaws of the general meeting, supervisory board,
management board, adopted policies and best practice principles;
− regulatory filings and periodic reports, as well as information on the application of corporate governance principles, published
based on the the Warsaw Stock Exchange Rules - the Company makes available its financial results compiled in periodic reports as
soon as possible;
− the composition of the management board, supervisory board and supervisory board committees, the CVs of members of these
bodies together with information on the meeting of independence criteria by supervisory board members, knowledge or skills
possessed in the fields of accounting or financial auditing, as well as knowledge of the sector in which the Company operates;
− basic financial data of the Company for the period from 2014 (including among others statements of profit or loss, statements of
cash flow, statements of financial position) in a form enabling the processing of this data by its users (xls);
− up-to-date investor presentations containing among others information on production, a description of the market environment of
the sector in which the Company operates, a description of individual production assets, a description of sustainable development
initiatives and the adopted strategy, as well as information on the dividend policy, the shareholder structure and the number of
shares issued, and recent and future events for shareholders;
− informational material prepared for investors, the media or for promotional purposes, mainly with respect to the strategy, activities
and financial results;
− information on analyst recommendations regarding the Company in each category: “buy”, “hold”, “sell”, with contact data for
analysts covering the Company;
− information concerning operations on the Company’s shares and changes in share capital;
− an investor calendar containing among others the dates of publication of financial reports, meetings with investors and press
conferences as well as other events important for investors;
− cyclical online discussions with investors with an archive of chats and audio/visual material from Investor Day and Analyst Day;
− a list of frequently asked questions in the area of investor relations with Company answers; if an investor raises a question
regarding the Company, the Company responds as soon as possible;
1.2 The Company makes available its financial results compiled in periodic reports as soon as possible after the end of each
reporting period; should that not be feasible for justified reasons, the Companies publishes at least preliminary financial
estimates as soon as possible.
The principle is applied.
The Company publishes interim reports as soon as possible after the end of the reporting period.
1.4 To ensure quality communications with stakeholders, as a part of the business strategy, the Company publishes on its
website information concerning the framework of the strategy, measurable goals, including in particular long-term goals,
planned activities and their status, defined by measures, both financial and non-financial. ESG information concerning the
strategy should among others:
1.4.1 explain how the decision-making processes of the company and its group members integrate climate change, including
the resulting risks
1.4.2 present the equal pay index for employees, defined as the percentage difference between the average monthly pay
(including bonuses, awards and other benefits) of women and men in the last year, and present information about actions
taken to eliminate any pay gaps, including a presentation of related risks and the time horizon of the equality target.
The principle is applied.
The required information can be found on the corporate website under the tab Business strategy | KGHM Polska Miedź S.A. Corporate
website.
1.5 The Company discloses at least on an annual basis the amounts expensed by the company and its group in support of
culture, sports, charities, the media, social organisations, trade unions, etc. If the company or its group pay such expenses in
the reporting year, the disclosure presents a list of such expenses.
The principle is applied.
Since 2013, the Company has published detailed information on the results of its regional support activities, including data on
sponsorship and charitable activities. In accordance with the DPSN 2021, since 2021 KGHM Polska Miedź S.A. has been also disclosing
expenditures related to the functioning of trade unions in the Company within the annual "Report of the Supervisory Board of KGHM
Polska Miedź S.A." in the section on assessing the legitimacy of expenditures to support sports culture, charities, the media, social
organisations and trade unions.
KGHM Polska Miedź S.A. 108
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
1.6 The Company participating in the WIG20, mWIG40 or sWIG80 index holds on a quarterly basis, and other companies hold
at least on an annual basis, a meeting with investors to which they invite in particular shareholders, analysts, industry
experts and the media. At such meetings, the management board of the Company presents and comments on the strategy
and its implementation, the financial results of the Company and its group, and the key events impacting the business of the
Company and its group, their results and outlook. At such meetings, the management board of the Company publicly
provides answers and explanations to questions raised.
The principle is applied.
The Investor Relations Department organises meetings for the capital market with the participation of the Management Board to discuss
the financial results of the Company and the KGHM Group. In 2024, the publication of financial results was accompanied by results
conferences open to all stakeholders via live webcasts in Polish and English, with the possibility of submitting questions by email. Video
recordings of these conferences are available on the Company’s website, in the Investors section
(https://kghm.com/en/investors/results-center).
1.7 If an investor requests any information about a Company, the Company replies immediately and in any case no later than
within 14 days.
The principle is applied.
In the event of a request for information, KGHM Polska Miedź S.A. provides information immediately, striving to keep the timeframe to
less than 14 days. The time taken to respond depends on the nature of the information requested and often involves only the potential
technical issue of its completion by the Company. If the question relates to future events or financial or operational data not yet made
public, a full answer is only possible once these issues have been reported.
Further information on investor relations can be found in section 1.6.1 Shareholders and the capital market.
3.2.2 Explanations on the waiver of the application of DPSN 2021
In accordance with the published Statement on the Company's compliance with the principles in section I of DPSN 2021,
the following principle is partially applied:
Table 71. Principles in section I of DPSN 2021 applied partially in KGHM Polska Miedź S.A.
1.3 The Company integrates ESG factors in its business strategy, including in particular:
1.3.1 which reads as follows: “In its business strategy, the company also takes into account ESG issues, in particular:
environmental factors, including measures and risks relating to climate change and sustainable development.”
The principle is partially applied.
The Company published the Climate Policy of KGHM Polska Miedź S.A. which, as a guiding document, presents the Company's
ambitions regarding climate change and defines the scope of process and organisational changes necessary for their implementation.
The Climate Policy was followed by the Decarbonisation Programme of KGHM Polska Miedź S.A. which specifies how the intended
reduction targets will be achieved and presents initiatives related to the implementation of measures aimed at reducing greenhouse
gas emissions. The Company is currently in the process of finalising complementary corporate documents, the content of which will
enable to achieve full compliance with this policy.
1.3.2 The Company integrates ESG factors in its business strategy, including in particular social and employee factors,
including among others actions taken and planned to ensure equal treatment of women and men, decent working
conditions, respect for employees’ rights, dialogue with local communities and customer relations.
The principle is partially applied.
The Company regularly publishes a broad range of information on its actions as regards social and employee issues, proper working
conditions, respecting employee rights, dialogue with local communities and relations with its customers and stakeholders. The
Company has a number of documents in place, e.g. the Human Rights Policy, the Code of Ethics, and the Code of Conduct, which refer
to the elements indicated in the best practice. The Company is currently in the process of finalising complementary corporate
documents, the content of which will enable to achieve full compliance with this principle..
3.3 THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD
KGHM Polska Miedź S.A., within the scope of the principles set forth in section 2 of DPSN 2021, strives to achieve
the highest standards in the exercise of duties by the Management Board and Supervisory Board of the Company
and their fulfillment in an effective manner.
KGHM Polska Miedź S.A. 109
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
3.3.1 Management Board of KGHM Polska Miedź S.A. (Management Board)
The principles of appointing and dismissing the Members of the Management Board
The principles governing the appointment and dismissal of Members of the Management Board of the Company are
defined in §12 of the Company's Statutes. In accordance with this regulation, the number of Members of the Management
Board ranges from one to seven persons, appointed by the Supervisory Board of KGHM Polska Miedź S.A. for a joint three-
year term of office. The appointment is preceded by a qualification procedure, determined in detail by the Supervisory
Board in the resolution adopted upon the initiation of the procedure. The purpose of the qualification procedure is to test
and assess the qualifications of the candidates to be a Member of the Management Board - in order to become one of
them, the statutory requirements must be met. The announcement of the qualification procedure is available to the public.
Following the qualification procedure, the Supervisory Board notifies the shareholders of the results, makes the report of
the qualification procedure available and appoints the best candidate for the designated position in the Management Board
of the Company.
A member of the Management Board of KGHM Polska Miedź S.A. may be dismissed by the Supervisory Board before the
lapse of his or her term of office.
The manner of operation of the Management Board
The Management Board acts on the basis of established law, the Statutes of the Company and the Bylaws of the
Management Board of KGHM Polska Miedź S.A. The Bylaws of the Management Board of KGHM Polska Miedź S.A. and the
Statutes of the Company are publicly available on the website of the Company in the section Corporate governance | KGHM
Polska Miedź S.A. Corporate website.
The Management Board of the Company manages the Company and represents it externally.
The work of the Management Board is organized by its President. In the event of a vacancy in the position of the President
of the Management Board or during a break in his/her management operations, the powers of the President of the
Management Board to convene and conduct meetings, as well as to pass resolutions of the Management Board outside
the meeting, are exercised by a Member of the Management Board authorized by the President of the Management Board,
or, in the absence of an actual possibility of issuing or delegating authorization, by the most senior Member of the
Management Board. Members of the Management Board are obliged to participate in meetings of the Management Board.
The presence of at least two-thirds of the Management Board at a meeting is required in order for resolutions to be valid.
Resolutions of the Management Board are adopted by an ordinary majority of votes of those present. In the case of a tie,
the President of the Management Board has the deciding vote. The Resolutions of the Management Board are taken in
open voting, unless the law provides otherwise or at least one of the Members of the Management Board requests a secret
ballot. In justified circumstances, voting is permitted through written means, or through the use of long-distance means of
direct communication.
Meetings of the Management Board and meetings and votes on resolutions adopted outside of the Management Board's
meetings are recorded in minutes of the meeting. Motions to the Management Board and other information and
attachments submitted to the Members of the Management Board shall constitute appendices to the meeting minutes.
Submitting a dissenting opinion by a Member of the Management Board requires stating it in the minutes of the meeting
with a possible, concise statement of motives.
Two members of the Management Board acting jointly or one member of the Management Board acting jointly with a proxy
are required to make declarations on behalf of the Company.
Composition, personnel changes of the Management Board and the breakdown of duties in 2024
The scope of the Management Board’s responsibilities includes all aspects of the Company’s affairs, except for the instances
reserved in the Commercial Partnerships and Companies Code and the Statutes of the Company and other mandatory
provisions of law which lie within the purvue of the General Meeting of KGHM Polska Miedź S.A. or the Supervisory Board
of KGHM Polska Miedź S.A.
A detailed description of the Management Board’s scope of duties and obligations and the manner in which it functions, as
well as the catalogue of matters requiring resolutions of the Management Board, may be found in the Bylaws of the
Management Board of KGHM Polska Miedź S.A.
With the exception of matters exceeding the scope of ordinary management, Members of the Management Board shall
manage the areas of the Company's activities specified in the "Organizational Regulations of KGHM Polska Miedź S.A. in
Lubin" and in resolutions of the Supervisory Board on the assignment of responsibilities to a given Management Board
Member. Within the scope of the competences and responsibilities thus defined, each Member of the Management Board
makes his/her own decisions regarding the area assigned to him/her, taking into account the change in the organisational
chart of KGHM Polska Miedź S.A. from 1 August 2024 presented below.
KGHM Polska Miedź S.A. 110
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
In case of doubt, a Member of the Management Board is obliged to submit the matter in question to the Management
Board for resolution. A member of the Management Board should, in the performance of his/her duties, exercise due
diligence required by the professional nature of their business and maintain loyalty to the Company.
Andrzej Szydło – President of the Management Board
A graduate of the Faculty of Mechanical and Power Engineering at Wrocław University of
Science and Technology, as well as the School for Managers in Industry and Studies in
Strategic and Operational Corporate Management. Completed post-graduate studies in
managing corporate value at the SGH Warsaw School of Economics.
An experienced manager specialising in management and the implementation of
innovative solutions, as well as the realisation of investment and maintenance projects.
Among others he has been involved in implementing ISO-based management and also
Integrated Management Systems. Skilled in conducting negotiations and managing
projects using Prince2 and Ten Step methodology. He has enhanced his know-how
during training in the areas of strategy, labour law and HR. He participated in the KGHM
Executive Academy organised by IMD.
In the years 2021-2023 he was a member of the management board of Hyundai
Engineering Poland, and previously a member of the management board of SPS Inscon Sp. z o.o. Since the beginning of his
professional career, for 25 years he has been involved with KGHM Polska Miedź S.A. He has served in the positions among
others of chief energy engineer, technical director and executive director of the Głogów Copper Smelter and Refinery
Division. In the years 2010-2014 he worked in the Head Office of KGHM Polska Miedź S.A. as a director of the production
infrastructure department, a director of the technology department and a director of the Pyrometallurgy Modernisation
Program. He was also secretary and chairman of the Supervisory Board of Energetyka Sp. z o.o. – a company in the KGHM
Polska Miedź S.A. Group.
He is a recipient of a Bronze Service Star, a Bronze Service Medal for Fire Fighting and a Silver Medal „Za Zasługi dla
Obronności Kraju” (Medal of Merit for National Defence). He also received an honorary award from the Minister of the
Economy „Za zasługi dla Energetyki” (Medal of Merit for Energy). In 2006 he received the honorary award “Zasłużony dla
KGHM Polska Miedź S.A.” (In the Service of KGHM Polska Miedź S.A.).
Diagram 18. Scope of competence of the President of the Management Board from 1 January 2024 to 31 July 2024.
Management of
corporate risk,
compliance and
internal audit
and control
The Company’s
Strategy and
Sustainable
Development
Policy
Security and
preventing
losses
The activities of
the Central Data
Processing
Center
Corporate
governance
Activities related to
communications
and corporate
image-building and
relations with the
external business
environment
Human capital
management
Administrative
services for the
Company
Diagram 19. Scope of competence of the President of the Management Board from 1 August 2024 to 31 December
2024 and as at the date of preparation of the Corporate Governance Statement
Management of
corporate risk,
compliance and
internal audit
and control
Security and
preventing
losses
Corporate
governance
Organisational
services
provided to the
Company’s
bodies
Activities related
to communications
and corporate
image-building and
relations with the
external business
environment
Human capital
management
The activities of
the Central Data
Processing
Center
Administrative
services for the
Company
Diagram 20. Persons acting as the President of the Management Board in 2024 and up to the date of the report
Tomasz Zdzikot
Zbigniew Bryja
Andrzej Szydło
from 13 February 2024 to 6 March 2024 (temporary execution of duties)
from 1 January 2024 to 13 February 2024
from 6 March 2024 to the date of preparation of the report
KGHM Polska Miedź S.A. 111
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Zbigniew Bryja – Vice President of the Management Board (Development)
An experienced manager specialising in the mining sector, especially in the management
of companies, production oversight, supervision of investment activities as regards
mining and metallurgy, as well as oversight of mine operations.
Related with KGHM since the start of his professional career. In the years 1995-1997 he
served in the Rudna mine of KGHM Polska Miedź S.A. as the Chief Engineer for Orebody
Mechanics and Development, subsequently in the years 1997-2002 as the Director for
Development and Production Preparation in this mine. He held the position of Executive
Director of the Polkowice Sieroszowice mine in the years 2002-2003. From 2003 to 2006
he worked in the Office of the Management Board of KGHM Polska Miedź S.A. (currently
the Head Office) as the Executive Director for Mining, and later as the Executive Director
for Investments and Development. In recent years he was President of the Management
Board of the following companies: PAK KWB Adamów S.A., PAK KWB Konin S.A., PAK Górnictwo sp. z o.o.
He has many years of professional experience in managing corporations, production and in the area of mining technology.
He gained experience in improving production processes and investment projects both in KGHM and outside of the Group.
He is a graduate of the Mining Faculty of Wrocław University of Science and Technology with a specialty in deposits mining
technology, as well as mine geophysical studies at the AGH University of Science and Technology in Kraków. He completed
a variety of managerial courses in international academic institutions involving the improvement of investment and
financial processes in companies.
He is the author and co-author of numerous articles and publications in areas in which he specialises.
He holds the title of General Mine Director, 1st, 2nd and 3rd degree, granted by the Minister of the Economy. He was
honoured by the President of the Republic of Poland with the Bronze, Silver and Gold Service Cross. He also received the
honorary titles of „Zasłużony dla KGHM Polska Miedź S.A.” (Of service to KGHM Polska Miedź S.A.) and „Zasłużony dla ZG
„Rudna” (Of service to the Rudna mine). In the years 2002-2005 he was appointed by the President of the Supreme Mining
Office as a Member of the Commission on Tremors, Restoration and Corridor Direction in Copper Ore Mines, and in the
years 1998–2000 as a Member of the Commission on Restoration of Corridors and Pillars.
Diagram 21. Scope of competence of the Vice President of the Management Board (Development) from 1 January
2024 to 31 July 2024.
R&D policy, innovation
and intellectual
property protection
Investment and
development processes
Managing projects and
programs
Development of the
national resource base
for the mining industry,
development of mining
structures and core
business
Real estate
Diagram 22. Scope of competence of the Vice President of the Management Board (Development) from 1 August
2024 to 31 December 2024 and as at the date of the Corporate Governance Statement
Company
Strategy
R&D policy,
innovation and
intellectual
property
protection
Investment and
development
processes
Managing
projects and
programs
Development of
the national
mining
resources base
Development of
the mining and
production
structure
Real estate
Diagram 23. Persons acting as the Vice President of the Management Board (Development) in 2024 and up to the
date of the report
Mirosław Kidoń
Mateusz Wodejko
Zbigniew Bryja
from 12 January 2024 to 13 February 2024 (fulfilling the duties)
from 13 February 2024 to the date of the report (including to 6 March 2024 - temporary execution of duties)
from 1 January 2024 to 12 January 2024 (fulfilling the duties)
KGHM Polska Miedź S.A. 112
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Mirosław Laskowski – Vice President of the Management Board (Production)
Since the beginning of his professional career, i.e. since 1987 he has been connected
with KGHM Polska Miedź S.A. In the years 2015-2016 he served as Vice President of the
Management Board (Production) of KGHM Polska Miedź S.A. He was a Director in the
following Divisions of the Company: the Rudna mine and the Polkowice-Sieroszowice
mine. An experienced manager with successes in the management of large employee
teams, responsible for implementing solutions supporting business efficiency and
optimising company costs. Responsible among others for planning the development of
the core business and for seeking and implementing new technologies and methods for
managing organisational structures in the copper company.
He has many years of experience in preparing corporate development plans with a 40-
50 year outlook. Actively participated in the implementation of Lean Management
systems based on 5S and TPM. He is a co-creator of several copper ore deposit mining systems and is the originator and
co-creator of KGHM’s unified safety system based on 3 pillars: education, environment and health. He created in the copper
company solutions involving the prevention of mine-related threats. He was also responsible for leading numerous rescue
operations.
He received the Knight's Cross of the Order of Polonia Restituta for the rescue operation in the Rudna mine in March 2013.
A graduate of the Faculty of Mining, with specialisation in deposit mining technology at Wrocław University of Science and
Technology. Also completed post-graduate studies in financial management and organisation and management at Wroclaw
University of Economics. He gained experience in the Leadership Academy and the Innovation Academy of the ICAN
Institute and in the TenStep Academy in Warsaw.
Diagram 24. Scope of competence of the Vice President of the Management Board (Production) from 1 January 2024
to 31 July 2024.
Planning, current
production and the
development of mine
and metallurgical
production
Occupational health and
safety and control of
environmental risk
Maintaining readiness
of the production and
non-production assets
and achievement of the
main objectives of the
Energy Strategy
Management systems
Integrated supply chain
management
Diagram 25. Scope of competence of the Vice President of the Management Board (Production) from 1 August 2024
to 31 December 2024 and as at the date of the Corporate Governance Statement
Planning, current
production and the
development of mine
and metallurgical
production
Occupational health and
safety and control of
environmental risk
Maintaining readiness
of the production and
non-production assets
and achievement of the
main objectives of the
Energy Strategy
Management systems
Integrated supply chain
management
Diagram 26. Persons acting as the Vice President of the Management Board (Production) in 2024 and up to the date
of the report
Marek Świder
Mirosław Kidoń
Mirosław Laskowski
from 11 January 2024 to 6 March 2024 (fulfilling the duties)
from 1 January 2024 to 9.01.2024
from 6 March 2024 to the date of the report
KGHM Polska Miedź S.A. 113
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Piotr Stryczek – Vice President of the Management Board (Corporate Affairs)
He holds experience in the conduct of business activities, strategic consultancy and
corporate supervision. Specialises in corporate developmental restructuring and equity
investments.
From 2015 he was president of the management board of Automatyka Spółka z o.o., a
company involved in the comprehensive implementation of new, and the maintenance
of existing, production line control systems based on modern solutions by global
producers. Involved with KGHM Polska Miedź S.A., where he worked among others as
director of the corporate supervision department. Carried out the processes of asset
and equity restructuring in KGHM and supervised Group companies. In the years 2002-
2006 he was a vice president of a company from the KGHM Group, Pol-Miedź Trans Sp.
z o.o. During his professional career he also held managerial functions in the companies
Telefonika S.A. and TELBESKID.
A graduate of the Faculty of Law and Administration at Wrocław University majoring in law and administration, specialising
in management. He is an Attorney-at-law. He has completed a variety of courses and training in the areas of accounting,
strategic communication and equity acquisitions.
He was a member of the supervisory boards and management boards of many limited capital companies, including in the
Legnica Special Economic Zone, Zagłębie Lubin, KGHM Metale and Krakowska Fabryka Kabli.
Diagram 27. Scope of competence of the Vice President of the Management Board (Corporate Affairs) from 1 January
2024 to 31 July 2024.
Corporate oversight
over subsidiaries in
Poland and abroad
Uniformity of internal
regulations to maintain
consistent operating
principles
Legal services for the
statutory bodies of the
Company with regard to
the Supervisory Board
Supervision of the
functioning of the
KGHM Polska Miedź
Foundation as well as
other organisations
serving the public
Coordination of
procurement processes
Diagram 28. Scope of competence of the Vice President of the Management Board (Corporate Affairs) from 1 August
2024 to 31 December 2024 and as at the date of the Corporate Governance Statement:
Corporate governance
standards
Corporate oversight
over subsidiaries in
Poland
Legal services to the
statutory bodies, the
Company and the
Divisions
Purchasing processes
Oversight of the
operation of the KGHM
Polska Miedź S.A.
Foundation
Diagram 29. Persons acting as the Vice President of the Management Board (Corporate Affairs) in 2024 and up to the
date of the report
Marek Pietrzak
Zbigniew Bryja
Piotr Stryczek
from 13 February 2024 to 6 March 2024 (temporary execution of duties)
from 6 March 2024 to the date of the report
from 1 January 2024 to 13 February 2024
KGHM Polska Miedź S.A. 114
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Piotr Krzyżewski – Vice President of the Management Board (Finance).
A manager with many years of experience in both the production and investment
sectors. He has experience in the management of companies, groups and finance in
developed groups at a company and group level, in the evaluation of the profitability
of investments, restructuring, optimising processes, managing financial risk, managing
liquidity and developing and executing financing strategies. Manager at Luma Holding
(a family office), responsible for finance of the entire holding company and individual
group companies.
He created a business model, created and managed a second-round fund in Poland.
He built and obtained the first Sustainability Linked-Loan (SLL) in Central and Eastern
Europe, and one of the first in the European mining sector. He gained experience as a
manager in the mining and metallurgical sector in Europe and Africa. He carried out
numerous trade finance transactions with partners on various continents.
He is experienced in negotiations, due diligence and the conduct and supervision of acquisitions of companies in Poland
and abroad. A member of Supervisory Boards and Investment Committees – responsible for the processes of merger,
restructuring and optimisation as well as the setting of development directions.
He is a graduate of the SGH Warsaw School of Economics with a major in finance and banking as well as international
economic relations. Completed doctoral studies in economics. Holds a broker license and completed numerous courses
and training.
Diagram 30. Scope of competence of the Vice President of the Management Board (Finance) from 1 January 2024 to
31 July 2024.
Financial and taxation
policy
Accounting services
Disclosure and
publishing obligations
Investor relations
Activities related to
development projects in
the power generation
area.
Diagram 31. Scope of competence of the Vice President of the Management Board (Finance) from 1 August 2024 to
31 December 2024 and as at the date of the Corporate Governance Statement:
Financial and
taxation
policy
Financial
verification of
the Strategy
projects
Finances in all
of the
Group’s
operations
and activities
Accounting
services
Disclosure
and
publishing
obligations
Investor
relations
Development
projects in
the field of
energy
transition
Commercial
and logistics
policies
ESG
Diagram 32. Persons acting as the Vice President of the Management Board (Finance) in 2024 and up to the date of
the report
Mateusz Wodejko
Zbigniew Bryja
Piotr Krzyżewski
from 13 February 2024 to 6 March 2024 (temporary execution of duties)
from 1 January 2024 to 13 February 2024
from 6 March 2024 to the date of the report
KGHM Polska Miedź S.A. 115
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Iga Dorota Lis - Vice President (International Assets)
Graduate of the Faculty of Law and Administration at University of Warsaw, lecturer at
Lazarski University at postgraduate studies in the fields of new technologies and
environmental protection law. She passed the bar exam at the District Bar Council in
Warsaw.
Experienced manager associated with the industrial sector, with many years of
experience in management and consultancy in the area of investments, including the
energy, petrochemical, chemical and metallurgical industries. In the past, she acted as
an advisor to KGHM Polska Miedź S.A. on projects related to modernisation of the
pyrometallurgical processes at the Głogów Copper Smelter and Refinery, the
development of smelting at the Głogów and Legnica Copper Smelter/Refineries and
investments at the Tailings Storage Facility, as well as the restructuring of an energy
project. Involved in providing legal services for the largest investments implemented in
Poland, including the construction of a refinery in Gdańsk and the construction of petrochemical and energy facilities for
the Orlen S.A. Group.
Associated with the energy market for many years as regards the construction of conventional and renewable sources as
well as in the expansion of transmission networks. Since 2020, she has been associated with Hyundai Engineering Poland
sp. z o.o., where she initially worked, among others, as the General Counsel and Director for Investment and Development,
and subsequently as a Member of the Management Board since 2021.
She has extensive experience in conducting and supervising technologically complex investment processes of international
scope.
Diagram 33. Scope of competence of the Vice President of the Management Board (International Assets) from 1
January 2024 to 31 July 2024.
Strategy for the
international assets
Developing the
international
resource base
International
exploration and
resource projects
Substantive
oversight over the
international
production
subsidiaries
Shaping of
commercial and
logistics policies
Identification of
international
development
opportunities
Diagram 34. Scope of competence of the Vice President of the Management Board (International Assets) from 1
August 2024 to 31 December 2024 and as at the date of the Corporate Governance Statement:
Strategy for the
international assets
Developing the
international
resource base
International
exploration and
resource projects
Substantive
oversight over the
international
production
subsidiaries
Identification of
international
development
opportunities
Corporate
oversight over
international
subsidiaries
Diagram 35. Persons acting as the Vice President of the Management Board (International Assets) in 2024 and up to
the date of the report
Mirosław Kidoń
Andrzej Szydło
Piotr Krzyżewski
Iga Dorota Lis
od 1 January 2024 to 1 April 2024
from 8 May 2024 to 31 August 2024 (fulfilling obgligations
as regards the shaping of trade and logistics policy)
from 1 September 2024 to the date of the report
from 8 May 2024 to 31 August 2024 (fulfilling obgligations,
excl. the shaping of trade and logistics policy)
KGHM Polska Miedź S.A. 116
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Table 72. Changes in the composition of the Management Board in 2024 and to the date of preparation of the report
9 January 2024
Marek Świder, Vice President of the Management Board (Production) resigned from the position of Vice President
of the Management Board (Production) of KGHM Polska Miedź S.A.
11 January 2024
The Supervisory Board entrusted the duties of Vice-President of the Management Board (Production) to Mirosław
Kidoń
12 January 2024
The Supervisory Board entrusted the duties of Vice-President of the Management Board (Development) to Mateusz
Wodejko, Vice President of the Management Board (Finance) and, at the same time, revoked the resolution
entrusting the duties of Vice President of the Management Board (Development) to Miroslaw Kidoń
13 February 2024
The Supervisory Board dismissed Tomasz Zdzikot - President of the Management Board, Mateusz Wodejko - Vice
President of the Management Board (Finance) and Marek Pietrzak - Vice President of the Management Board
(Corporate Affairs) from the Management Board.
At the same time, the Supervisory Board of the Company delegated a member of the Supervisory Board, Zbigniew
Bryja, to act temporarily as the President of the Management Board, Vice President of the Management Board
(Finance), Vice President of the Management Board (Corporate Affairs) and Vice President of the Management Board
(Development) for the period from 13 February 2024 until the date of the resolution of the qualification procedures
for the position of President of the Management Board of KGHM Polska Miedź S.A. and at least one of the Vice
Presidents of the Management Board of KGHM Polska Miedź S.A., however for a period not longer than three
months.
6 March 2024
Zbigniew Bryja resigned from temporarily performing the functions of the Member of the Management Board of
the Company (delegated from the Supervisory Board of KGHM Polska Miedź S.A.), the President of the Management
Board of KGHM Polska Miedź S.A., Vice President of the Management Board (Finance) of KGHM Polska Miedź S.A.,
Vice President of the Management Board (Corporate Affairs) of KGHM Polska Miedź S.A. and Vice President of the
Management Board (Development) of KGHM Polska Miedź S.A. and simultaneously he resigned from the function
of Member of the Supervisory Board of the Company.
6 March 2024
The Supervisory Board of the Company, following a qualification procedure, as of 6 March 2024 appointed the
following members of the Management Board: Piotr Stryczek as Vice President of the Management Board
(Corporate Affairs), Mirosław Laskowski as Vice President of the Management Board (Production), Zbigniew Bryja as
Vice President of the Management Board (Development), Piotr Krzyżewski as Vice President of the Management
Board (Finance) and Andrzej Szydło as President of the Management Board of KGHM Polska Miedź S.A. for the 11th
term of office.
29 March 2024
Resignation of Mirosław Kidoń from the function of Vice President of the Management Board (International Assets)
of KGHM Polska Miedź S.A., and thus from the membership in the Management Board of KGHM Polska Miedź S.A.,
as of 1 April 2024.
8 May 2024
The Supervisory Board of the Company additionally entrusted Andrzej Szydło, President of the Management Board,
with duties in the scope of competence previously entrusted to the Vice President of the Management Board
(International Assets) with the exception of the duties with respect to the shaping of the Company's commercial and
logistics policy, which the Supervisory Board temporarily entrusted to Piotr Krzyżewski, Vice President of the
Management Board (Finance), for the period until the date of appointment of a Vice President of the Management
Board (International Assets)
6 August 2024
The Supervisory Board of the Company, following the qualification procedure, appointed Ms Iga Dorota Lis to the
11
th
-term Management Board of KGHM Polska Miedź S.A. as Vice President of the Management Board (International
Assets) KGHM Polska Miedź S.A., as of 1 September 2024
Powers of the Management Board to issue or buy back shares of the Company
The authority of the Management Board to pass decisions on the issuance or redemption of shares is statutorily limited.
The shares of the Company may be redeemed given shareholder consent through their acquisition by the Company
(voluntary redemption). Redemption may not be carried out more than once per financial year. A resolution of the General
Meeting of KGHM Polska Miedź S.A on the redemption of shares may be preceded by an agreement entered into with a
shareholder whose shares are to be redeemed. In accordance with §29 sec. 1 point 6 of the Statutes of the Company, any
increase in share capital or issuance of shares requires the approval of the General Meeting of KGHM Polska Miedź S.A. The
same holds true for the issuance of bonds (§29 sec. 1 point 10 of the Statutes of the Company). The Management Board of
the Company does not have the authority to increase the share capital or issue the shares of the Company under conditions
specified in art.
444 – 446 of the Commercial Partnerships and Companies Code.
KGHM Polska Miedź S.A. 117
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
3.3.2 Supervisory Board of KGHM Polska Miedź S.A. (the Supervisory Board)
The principles of appointing and dismissing the Members of the Supervisory Board
According to the Company’s Statutes the Supervisory Board shall be composed of 7 to 10 persons appointed by the General
Meeting, including at least 3 members elected by employees of the KGHM Polska Miedź S.A. Group. The Supervisory Board
Members are appointed for a mutual term of office, which lasts three years. Before the end of term of office the mandate
of the Supervisory Board Members shall expire in the case of the resignation, death or dismissal of a Member by the General
Meeting.
Composition and personnel changes of the Supervisory Board in 2024
Diagram 36. Composition of the Supervisory Board in 2024 and to the date of preparation of this report
Table 73. Changes in the composition of the Supervisory Board in 2024 and to the date of preparation of the report
13 February 2024
The Extraordinary General Meeting of KGHM Polska Miedź S.A. dismissed the following persons from the
Supervisory Board: Agnieszka Winnik-Kalemba, Katarzyna Krupa, Wojciech Zarzycki, Andrzej Kisielewicz, Marek
Wojtków, Radosław Zimroz, Piotr Ziubroniewicz
and subsequently appointed the following persons to the 11
th
-term Supervisory Board: Zbigniew Bryja, Aleksander
Cieśliński, Zbysław Dobrowolski, Dominik Januszewski, Tadeusz Kocowski, Marian Noga and Piotr Prugar.
6 March 2024
Resignation of Zbigniew Brya from his function of member of the Supervisory Board of the Company
5 July 2024
Resignation of Marian Noga from his function of Vice Chairperson of the Supervisory Board of KGHM Polska Miedź
S.A. and election of Aleksander Ciesliński as Vice Chairperson of the 11
th
-term Supervisory Board
8 January 2025
The Extraordinary General Meeting of KGHM Polska Miedź S.A. appointed Joanna Zakrzewska to the Supervisory
Board
Organisation of work of the Supervisory Board
The Supervisory Board acts on the basis of established law, the Statutes of the Company and the Bylaws of the Supervisory
Board of KGHM Polska Miedź S.A. The Bylaws of the Supervisory Board of KGHM Polska Miedź S.A. and the Statutes of the
Company are publicly available on the website of the Company in the section Corporate governance | KGHM Polska Miedź
S.A. Corporate website.
The Supervisory Board selects from among its members a Chairperson of the Supervisory Board, his/her deputy and, if
necessary, a Secretary.
In order for resolutions of the Supervisory Board to be valid, all Members of the Supervisory Board must be invited to a
meeting and resolutions adopted by an absolute majority of votes in the presence of at least one-half of the members of
Agnieszka Winnik–Kalemba
Katarzyna Krupa
Wojciech Zarzycki
Andrzej Kisielewicz
Marek Wojtków
Radosław Zimroz
Piotr Ziubroniewicz
Józef Czyczerski
Przemysław Darowski
Bogusław Szarek
Zbigniew Bryja
Aleksander Cieśliński
Zbysław Dobrowolski
Dominik Januszewski
Tadeusz Kocowski
Marian Noga
Piotr Prugar
Joanna Zakrzewska
from 1 January 2024 to 13.02.2024 (Chairperson)
from 1 January 2024 to 13.02.2024 (Deputy Chairperson)
from 1 January 2024 to 13.02.2024 (Secretary)
from 13 February 2024 to the date of the report (Chairperson)
from 13 February 2024 to the date of the report (to 5 July 2024 Deputy Chairperson)
from 13 February 2024 to the date of the report (from 5.07.2024 Deputy Chairperson)
employee-elected members of the Supervisory Board of the KGHM Polska Miedź S.A. Group
from 1 January 2024 4 to 13.02.2024
from 1 January 2024 to 13.02.2024
from 1 January 2024 to 13.02.2024
from 1 January 2024 to 13.02.2024
from 1 January 2024 to the date of the report
from 1 January 2024 to the date of the report
from 1 January 2024 to the date of the report (from 13 February 2024 Secretary)
from 13 February 2024 do 6.03.2024
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
from 8.01.2025 to the date of the report
period served as Chairperson, Deputy Chairperson or Secretary
KGHM Polska Miedź S.A. 118
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
the Supervisory Board. The voting is open, unless the law provides otherwise or any Member of the Supervisory Board
requests a secret ballot.
In justified instances the Supervisory Board may also pass resolutions in written form or through the use of long-distance
means of direct communication. A resolution passed in this manner shall be valid if all Members of the Supervisory Board
were informed of the wording of the proposed resolution and in the presence of at least one-half of the Members of the
Supervisory Board.
Meetings of the Supervisory Board as well as meetings and votes on resolutions adopted outside of the Supervisory Board's
meeting shall be recorded in minutes of the meeting. Motions to the Supervisory Board, information and other attachments
submitted to the Supervisory Board shall constitute appendices to the minutes of the meeting. Submitting a dissenting
opinion by a Member of the Supervisory Board requires stating it in the minutes of the meeting.
During its meetings the Supervisory Board may also adopt resolutions in matters not included in the proposed agenda, if
none of the Members of the Supervisory Board participating in the meeting express disagreement in this regard.
The Supervisory Board should be convened at least once a quarter.
In 2024, 13 meetings of the Supervisory Board were held. The absence of Members of the Supervisory Board was
incidental and did not affect its work. In 2024, the Supervisory Board adopted four resolutions to justify the absence of a
Member of the Supervisory Board at the meeting. The Supervisory Board held only one meeting between 1 January 2024
and 13 February 2024. Attendance of individual Supervisory Board members in the period from 13 February 2024 to
31 December 2024 (12 meetings) was as follows: Tadeusz Kocowski (100%), Aleksander Cieśliński (100%), Zbysław
Dobrowolski (100%), Dominik Januszewski (100%), Marian Noga (100%), Piotr Prugar (100%), Józef Czyczerski (100%),
Przemysław Darowski (92%), Bogusław Szarek (92%).
Competence and experience of Members of the Supervisory Board
The Supervisory Board of KGHM Polska Miedź S.A. is the permanent supervisory authority of KGHM Polska Miedź S.A., in
all of the Company’s functional areas. This function is exercised among others through the right to receive cyclical or
advisory information from the Company concerning its assets, as well as important circumstances involving the Company’s
affairs, in particular in terms of the operations, investments and staff.
The detailed scope of competence of the Supervisory Board and the manner of its proceedings is described in the Statutes
of the Company and the Bylaws of the Supervisory Board of KGHM Polska Miedź S.A. available on the Company’s website
in the section Corporate Governance | KGHM Polska Miedź S.A.. Corporate website. The Members of the Supervisory Board
should, in performing their duties, exercise the due diligence arising from the professional nature of their activities as well
as loyalty towards the Company.
The appointed Members of the Supervisory Board of KGHM Polska Miedź S.A. are not engaged in activities which are
competitive to the activities of KGHM Polska Miedź S.A., do not participate in a company which is a competitor of KGHM
Polska Miedź S.A. as a partner in a civil law partnership, a partnership or a capital company, and do not participate in a
competing legal entity as a member of its bodies, and are not listed in the Register of Insolvent Debtors maintained on the
basis of the Act on the National Court Register.
Table 74. Biograms of Members of the Supervisory Board
Tadeusz Kocowski
Chairperson of the
Supervisory Board
Professor, habilitated doctor of law. Professor and a former Head of the Department of Economics Law of the Faculty
of Management of Wrocław University of Economics and Business. A retired professor of Wrocław University, a
former director of the Institute of Administrative Studies and a Head of the Department of Public Economic Law of
the Faculty of Law, Administration and Economics of Wrocław University.
He is the author or co-author of around 200 academic publications, among others: Administracyjne prawo
gospodarcze (Administrative economic law), Publiczne prawo gospodarcze (Public economic law), Reglamentacja
działalności gospodarczej w polskim administracyjnym prawie gospodarczym (Rationing of economic activities in
Polish administrative economic law), Prawo dla ekonomistów (Law for economists), Zamówienia publiczne jako
przedmiot regulacji prawnej (Public procurement as a subject of regulations), Prawo geologiczne i górnicze (Mining
and geological law). He promoted 10 doctors of law, prepared 11 reviews of doctoral theses and participated in 4
postdoctoral dissertations. Co-author of joint studies of Wrocław University and Wrocław University of Economics
and Business, the graduates of which receive diplomas of both universities, titled Legal and Economic Consulting.
At the turn of the twentieth century, and currently as well, he actively participates in the process of economic
transformation. Initially in affairs of a self-governing state-owned company and the self-government of its employees,
restitution of commercial companies and local self-governments engaged in economic activities and subsequently in
economic freedom and organisational-ownership changes. In the years 1990-1992 he cooperated with KGHM Polska
Miedź S.A. in the process of transforming the business.
He was an advisor in the Economic Development Section of the Voivodeship Office in Wrocław, a member of the Self-
Government Appeal Court. He is an arbitrator in the Wrocław Centre of Arbitration at the District Barristers Council
in Wrocław. He is related with the issues of public procurement and public-private partnerships. He participated in
the creation of regulations on safety and fire protection, organiser of many academic conferences on this topic.
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Translation from the original Polish version
Marian Noga
Deputy
Chairperson of the
Supervisory Board
Professor of economic sciences, he served as Rector of the Wrocław University of Economics and Dean of the Faculty
of National Economy at the same university. In the years 2000-2004 he was a Senator of the 4th and 5th terms of the
Republic of Poland. He was a member of the Monetary Policy Council in the years 2004-2010. Chairperson of the
Committee on Economic Sciences of the Polish Academy of Sciences in the years 2007-2014. In 2010, he was awarded
the badge of honour “For merits to banking in the Republic of Poland”. Author of 34 monographs and more than 170
scientific articles published in Poland, Germany, Ukraine and the United Kingdom. He is a regular economic
commentator on television, radio and the press.
Bogusław Szarek
Secretary of the
Supervisory Board,
member of the
Supervisory Board
elected by the
employees of the
Group
Since 1982 employed at the Sieroszowice Mine of KGHM Polska Miedź S.A. as a mining machinery and tools mechanic.
Secondary technical education.
Since 1992 – Chairperson of the Plant Committee of the trade union NSZZ „Solidarność” in the Sieroszowice Mine.
Following the merger of the Polkowice mine with the Sieroszowice mine, since 1996 Chairperson of the Plant
Committee of the trade union NSZZ „Solidarność” in the Polkowice–Sieroszowice mine. Since 2012 an employee-
elected Member of the Supervisory Board of KGHM Polska Miedź S.A.
Chairperson of the Board of the trade union Krajowa Sekcja Górnictwa Rud Miedzi NSZZ „Solidarność” in Lubin. Vice-
Chairperson of the Board of the Secretariat for Mining and Energy of the trade union NSZZ „Solidarność” in Katowice.
Member of the National Committee of the trade union NSZZ „Solidarność”.
Aleksander
Cieśliński
Legal counsel with over 20 years of experience in developing legal and expert opinions in the area of EU law and
international protection of human rights for entities in the public and private sectors, international law, as well as
experience in participating in proceedings before the European Court of Human Rights and the Court of Justice of the
European Union.
Moreover, he engaged in economic activity related to international trade and has experience in trade negotiations
with foreign entities.
He is a graduate of the Faculty of Law and Administration of Wrocław University. He received recognition by the
Council of the aforementioned Faculty for his doctorate in international law. He is a professor in the International
and European Law Department of the Faculty of Law, Administration and Economics of Wrocław University. He
conducts seminars and lectures on full-time and postgraduate studies, as well as English speaking studies such as
LMM (Large Language Model).
He has many years of experience in lecturing and teaching, among others of legal trainees, legal advisers and judges.
He was a lecturer in the Department of Economic Law of Wroclaw University of Economics, in the Copper Basin
Vocational University in Lubin and in the Higher School of Trade in Wrocław. He is the author and co-author of many
academic publications and scientific publications, among others in the area of EU and economic law, including
“System prawa UE” (European Union law system) and “Komentarz do Traktatu o Unii Europejskiej” (Commentary to
the Treaty on the European Union).
Józef Czyczerski
Member of the
Supervisory Board
elected by
employees of the
Group
Secondary technical education. Since 1979 employed at the Sieroszowice Mine of KGHM Polska Miedź S.A. as an
underground electromechanic. Chairperson of the trade union Krajowa Sekcja Górnictwa Rud Miedzi NSZZ
Solidarność. Employee-elected member of the Supervisory Board of KGHM Polska Miedź S.A. in the years 1999-2011,
and then from 2014.
Przemysław
Darowski
Member of the
Supervisory Board
elected by
employees of the
Group
Has higher technical education. Professional work commenced in 1997 as a metallurgist, next as a railways rolling
stock Specialist in Pol- Miedź Trans Sp. z o.o. From 2003 Head of the Unit responsible for maintenance planning and
settlement as well as Maintenance Control, subsequently Head of the Railways Operations Unit in Głogów. From
2006, Senior Specialist / Commissioner of the Railway Cars Maintenance Handover Unit. Cooperated with the Gmina
(municipality) of Legnica, on behalf of which Zespół Szkół Technicznych i Ogólnokształcących im. (Henryk Pobożny
Technical and General School Complex) in Legnica acts as regards the operation of a training and examinations center
for train drivers and candidates for train drivers.
Former member of the railways commissions in Pol-Miedź Trans which review railway accidents and incidents.
Moreover, in the years 2017-2019 served as an Employee Labour Inspector. Currently Chairperson of the
Interdivisional Commission of the NSSZ „Solidarność” trade union in Pol-Miedź Trans. Member of the trade union
Sekcja Krajowa Górnictwa Rud Miedzi NSZZ „Solidarność”. Member of the Management Board of Region Zagłębie
Miedziowe of the trade union NSSZ „Solidarność”.
Zbysław
Dobrowolski
Professor of the Jagiellonian University in Kraków, Ph.D in Economics: economics and corporate organisation, with
the status of habilitated doctor in the area of management.
He has more than 30 years of experience in research and the evaluation of enterprises involving public property,
including resulting from more than 25 years of work at the supreme national control body, among others as a
manager of one of the delegations. Engaged in internal auditing activities. Author of numerous scientific publications
on controlling, auditing and implementation of the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) guidelines. Expert in many international programs, including those financed by the International
Organization of Supreme Audit Institutions (INTOSAI), Organisation for Economic Co-operation and Development
(OECD) and EU. A speaker during the Organization for Security and Co-operation in Europe (OSCE) conference.
In 1998 he took part in a prestigious internship aimed at the management of the highest governmental control
bodies: the GAO International Auditor Fellowship Program of the U.S. Government Accountability Office. Since 2008
he had been involved with INTOSAI, where in the role of expert he trained employees of the highest governmental
control bodies from several dozen countries, and co-founded three global standards and audit guidance. He is an
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Translation from the original Polish version
expert involved in a dozen or so international enterprises, including those organised by the OECD or the European
Union, aimed at improving the management of international organisations in other countries.
Dominik
Januszewski
An experienced manager, an expert in the areas of management and finance. For more than 25 years he worked in
the companies Ernst&Young and Arthur Andersen. In the years 2005-2019 he was a Partner in Ernst&Young
responsible for projects involving business consultancy, transactional consultancy and privatisation, as well as the
auditing of financial statements. As a Partner, he managed a team of more than 200 consultants. His clients included
the largest financial institutions in Poland. Currently he is responsible for a strategic consulting team at JLL involved
in developing and implementing an ESG strategy as well as a strategy to optimize the energy aspects of companies.
He is a Polish Certified Auditor, and has taken numerous professional courses in the areas of auditing, consultancy
and management. In 2022 he received a Certificate from the University of Cambridge: “Business Sustainability
Management”. He is a graduate of the University of Łódź, Faculty of Economics-Sociology, specializing in Finance and
Banking.
Piotr Prugar
A graduate of the Law and Administration of Wrocław University. Legal counsel, with many years of experience in the
area of legal services and management of economic entities. Co-worked as and served as the receiver, liquidator and
proxy for company management boards. Served as a representative of creditors in insolvency and restructuring
proceedings, among others in GetBack S.A w restrukturyzacji, Hawe Telekom S.A. w restrukturyzacji, Fakos sp. z o.o.
[subsidiary of Kopex SA], Technical Glassworks (Huta Szkła Technicznego), Paper Mill in Dąbrowica (Fabryka Papieru
w Dąbrowicy), Julia Glassworks (Huta Julia) and others.
Joanna
Zakrzewska
Qualified manager with many years’ experience in management, audit and finance. For years, she has held
management positions in both Polish and international companies, i.e. Amazon, Deloitte, KPMG, LOT or Noble Bank,
pursuing her passion for improving organisational effectiveness also as an external advisor.
Expert in internal audit, corporate governance and risk. Advocate for sustainable development. Practitioner of the
development, implementation and attestation of internal control systems.
She started her career in the field of financial auditing, specialising in the analysis and audit of financial statements.
She served as coordinator for SOX implementation in Europe. As Director of Internal Audit, she created and
reorganised the internal audit function, working closely with the supervisory boards.
She studied at universities in Poland and abroad. Graduate of the Faculty of Economics, majoring in Organisation and
Management. Scholarship holder of the Hogeschool voor Economisch Administratief Onderwijs. She completed
postgraduate studies in "Business Psychology" (L. Koźmiński Academy).
She holds international qualifications in the areas of finance and internal audit: Association of Chartered Certified
Accountants (FCCA) and the Institute of Internal Auditors (CIA).
Chairperson of the ACCA Council Poland. She is a member of the Association of Independent Supervisory Board
Members, the Program Council of the "Financial Director Forum", the Institute of Internal Auditors and Chapter Zero
Poland.
Speaker. Author or co-author of publications, training courses, reports and analyses on internal audit, risk,
sustainability and the luxury goods market. Lecturer.
Supervisory Board Committees
Within the structure of the Supervisory Board are three committees which serve in an auxiliary role to the Supervisory
Board in the preparation of assessments, opinions and other actions aimed at reaching decisions which must be made by
the Supervisory Board. After the end of the year, the committees submit reports on their activities to the Supervisory Board.
The Committees elect a Chairperson from among themselves. Internal regulations on the basis of which the following
Committees organize their work and their changes are adopted by the Supervisory Board.
Diagram 37. Committees of the Supervisory Board of KGHM Polska Miedź S.A. in 2024
KGHM Polska Miedź S.A. 121
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Translation from the original Polish version
Remuneration Committee
Responsible for supervising the realisation of contracts signed with the Management Board, the remuneration system and
benefits paid out in the Company and Group, training and other benefits provided by the Company, as well as audits
performed by the Supervisory Board in this regard.
Diagram 38. Composition of the Remuneration Committee of the Supervisory Board in 2024 and to the date of this
report
Diagram 39. Tasks of the Remuneration Committee
The management of
issues related to the
recruitment and
employment of
members of the
Management Board
by preparing and
arranging draft
documents and
processes to be
submitted for the
acceptance of the
Supervisory Board
The preparation of
draft
contracts/agreements
and other sample
documents related to
the establishment of
an employment
relationship with a
Member/Members of
the Management
Board and oversight
of the execution of
the contractual
obligations by the
parties
Oversight of the execution of
the Management Board
remuneration system, in
particular the preparation of
settlement documents with
respect to moveable/variable
bonus elements of
remuneration in order to
submit recommendations to
the Supervisory Board and to
develop a draft report of the
Supervisory Board on the
remuneration of Members of
the Management Board and
Supervisory Board
Monitoring and
periodic
assessment of the
remuneration
system for the
Company’s senior
management and,
if necessary, the
preparation of
recommendations
for the Supervisory
Board
Oversight of the
proper execution of
additional benefits
for Members of the
Management Board
arising from
agreements
binding Members
of the Management
Board with the
Company
Other tasks
ordered by
the
Supervisory
Board
Katarzyna Krupa
Andrzej Kisielewicz
Agnieszka Winnik-Kalemba
Marek Wojtków
Wojciech Zarzycki
Radosław Zimroz
Józef Czyczerski
Bogusław Szarek
Tadeusz Kocowski
Zbigniew Bryja
Aleksander Cieśliński
Zbysław Dobrowolski
Marian Noga
from 1 January 2024 to 13 February 2024 (Chairperson)
from 1 January 2024 to 13 February 2024
from 1 January 2024 to 13 February 2024
from 1 January 2024 to 13 February 2024
from 1 January 2024 to 13 February 2024
from 1 January 2024 to the date of the report
from 1 January 2024 to the date of the report
from 13 February 2024 to the date of the report (Chairperson)
from 13 February 2024 to 6 March 2024
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
from 1 January 2024 to 13 February 2024
period served as Chairperson
KGHM Polska Miedź S.A. 122
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Translation from the original Polish version
Strategy Committee
Supervises the realisation of company strategy, the company's annual and long-term operating plans, supervises the
coherence of these documents, and also provides its opinion to the Supervisory Board on the strategic projects presented
by the Management Board of the Company and any changes thereto, as well as on the company's annual and long-term
operating plans.
Diagram 40. Composition of the Strategy Committee of the Supervisory Board in 2024 and to the date of this report
Diagram 41. Tasks of the Strategy Committee
Execution on behalf of
the Company's
Supervisory Board of
tasks in the area of
oversight of issues
associated with the
Company's strategy and
the annual and long-
term operating plans of
the Company
Monitoring execution of
the Company's strategy
by the Management
Board and issuing
opinions on the degree
to which the existing
strategy is able to deal
with changes in the
actual situation
Monitoring execution of
the annual and long-
term operating plans of
the Company by the
Management Board, and
assessment of whether
these plans need to be
modified
Assessment of the
consistency of the
annual and long-term
operating plans of the
Company with the
Company's strategy as
executed by the
Management Board, and
the presentation of any
proposed changes in all
such Company
documents
Submission to the
Company's Supervisory
Board of its opinions
regarding the draft strategies
of the Company and any
changes thereto and of the
annual and multi-year
operating plans of the
Company, as presented by
the Company's Management
Board, including the budget
Andrzej Kisielewicz
Katarzyna Krupa
Agnieszka Winnik-Kalemba
Marek Wojtków
Wojciech Zarzycki
Radosław Zimroz
Piotr Ziubroniewicz
Józef Czyczerski
Przemysław Darowski
Bogusław Szarek
Marian Noga
Zbigniew Bryja
Aleksander Cieśliński
Zbysław Dobrowolski
Dominik Januszewski
Tadeusz Kocowski
Piotr Prugar
from 1 January 2024 to 13 February 2024 (Chairperson)
from 1 January 2024 to 13 February 2024
from 1 January 2024 to 13 February 2024
from 1 January 2024 to 13 February 2024
from 1 January 2024 to 13 February 2024
from 1 January 2024 to the date of the report
from 13 February 2024 to the date of the report (Chairperson)
from 13 February 2024 to 6 March 2024
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
from 1 January 2024 to 13 February 2024
from 1 January 2024 to the date of the report
from 1 January 2024 to the date of the report
from 1 January 2024 to 13 February 2024
period served as Chairperson
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
KGHM Polska Miedź S.A. 123
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Audit Committee
Responsible for supervision in the areas of financial reporting, the internal control system, risk management and internal
and external audits. In addition, the Supervisory Board has appointed the Audit Committee to perform the function of
reporting on the sustainable development of the KGHM Polska Miedź S.A. Group and attesting of these reports.
Diagram 42. Composition of the Audit Committee of the Supervisory Board in 2024 and to the date of this report
Due to the significant size of the KGHM Polska Miedź S.A. Group, its global reach and the broad and diverse scope of its
activities, the Audit Committee is comprised of people with different qualifications, skills and competence. The broad
composition of the Audit Committee is a guarantee of effective, continuous oversight of the Company's affairs and, with
the very high number of matters referred to the Audit Committee meetings, its members are able to devote sufficient time
to the work of the Audit Committee through proper organisation and distribution of work.
Diagram 43. Most important tasks of the Audit Committee
In the area of financial reporting oversight
Monitoring of the
financial
reporting process
The conduct
of financial
review
Conducting reviews of
transactions carried out by
the Company, which the
Audit Committee considers
as significant for the
Company
Submitting recommendations
aimed at ensuring the
transparency of the
Company’s financial reporting
process
Monitoring the effectiveness of internal
control and risk management systems
and internal audit, in particular with
regard to financial reporting
In the area of supervision of the internal and external audit function
Providing an
opinion on the
Company’s
internal audit
plan and the
internal audit
regulations, as
well as changes
in the position of
internal audit
director who
reports directly
to the President
of the
Management
Board
Analysis of the
conclusions
and
recommendati
ons of the
Company's
internal audit
from
monitoring the
degree of
implementatio
n of
recommendati
ons made by
the
Management
Board
Auditing and
monitoring the
independence of
the certified
auditor and the
auditing firm, in
particular if the
auditing firm
provides other
services to the
Company apart
from auditing
Assessing the
independence of
the certified
auditor and
expressing
consent for the
certified auditor
to provide
permitted non-
auditing services
in the Company
Developing a policy
for the selection of
an audit firm to
audit the financial
statements and a
policy for the
selection of an
audit firm to
perform attestation
of the group’s
sustainability
reporting;
Developing a policy
for the provision of
services by the audit
firm performing audit
or sustainability
reporting attestation,
by affiliates of the
audit firm and by
members of the
network to which the
audit firm belongs, of
permitted services
other than audit or
sustainability
reporting attestation
Making a
recommendati
on to the
Supervisory
Board on the
appointment of
an
independent
auditor to
review the
internal audit
function
In the area of non-financial reporting oversight
Monitoring the group’s sustainability reporting
Monitoring the effectiveness of internal control and risk management systems and
internal audit, in particular with regard to sustainability reporting of the group
Wojciech Zarzycki
Andrzej Kisielewicz
Katarzyna Krupa
Agnieszka Winnik–Kalemba
Marek Wojtków
Przemysław Darowski
Bogusław Szarek
Zbysław Dobrowolski
Aleksander Cieśliński
Dominik Januszewski
Tadeusz Kocowski
Marian Noga
Piotr Prugar
Joanna Zakrzewska
from 1 January 2024 to 13 February 2024 (Chairperson)
from 1 January 2024 to 13 February 2024
from 1 January 2024 to 13 February 2024
from 1 January 2024 to 13 February 2024
from 1 January 2024 to 13 February 2024
from 1 January 2024 to the date of the report
from 1 January 2024 to the date of the report
from 13 February 2024 to the date of the report (Chairperson)
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
from 13 February 2024 to the date of the report
period served as Chairperson
od 19.02.2025 to the date of the report
KGHM Polska Miedź S.A. 124
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Translation from the original Polish version
In 2024, there were 15 meetings of the Audit Committee. The absence of Audit Committee Members was incidental and
did not affect its work. The Audit Committee held one meeting between 1 January 2024 and 13 February 2024. After
selecting its new composition, the Audit Committee held 14 meetings between 13 February 2024 and 31 December 2024.
The attendance of individual Members of the Audit Committee was as follows: Tadeusz Kocowski (100%), Aleksander
Cieśliński (100%), Zbysław Dobrowolski (100%), Dominik Januszewski (100%), Marian Noga (100%), Piotr Prugar (100%),
Przemysław Darowski (93%), Bogusław Szarek (93%).
In 2024, the Audit Committee, during its meetings, dealt with and became acquainted with information on, among others:
− market and corporate risk management in the KGHM Polska Miedź S.A. Group, including in detail in matters relating to
key risk;
− financial and production results in the KGHM Polska Miedź S.A. Group;
− recommendations for the Supervisory Board on the evaluation of financial statements and consolidated financial
statements and on the evaluation of the Report of the Management Board on the activities of KGHM Polska Miedź S.A.
and the KGHM Polska Miedź S.A. Group in 2023, including the Statement on non-financial information;
− impairment testing of production assets,
− appointment of the Executive Director responsible for the area of internal audit in the Head Office of KGHM Polska
Miedź S.A,
− the application of the International Standards for the Professional Practice of Internal Auditing by the Company
− the implementation of the internal audit plan for 2023 and the implementation of the audit plan for 2024.
− expenses related to consulting services, auditing financial and legal statements, marketing and advertising, cultivating
traditions, representation and sponsorship;
− anti-corruption management system based on the international PN-ISO 37001 standard;
− assessment of the independence of the audit firm in the provision of permitted non-auditing services;
− verification of the declarations of independence of members of the Audit Committee of the Supervisory Board of KGHM
Polska Miedź S.A.
Assessment of Independence of the Audit Committee Members
In the period from 1 January 2024 to 31 December 2024 the majority of the Members of the Audit Committee, including its
Chairperson, met the independence criteria referred to in art. 129 sec. 3 of the Act of 11 May 2017 on Auditors, Audit Firms
and Public Supervision. The independent members of the Audit Committee included:
− In the period from 1 January 2024 to 13 February 2024: Agnieszka Winnik-Kalemba, Andrzej Kisielewicz, Marek
Wojtków, Wojciech Zarzycki i.e. 4 out of 7 Audit Committee members (57%)
− In the period from 13 February to 5 August 2024: Tadeusz Kocowski, Aleksander Cieśliński, Dominik Januszewski,
Marian Noga, Piotr Prugar, Zbysław Dobrowolski i.e. 6 out of 8 Audit Committee members (75%)
− In the period from 6 August 2024 to 31 December 2024: Tadeusz Kocowski, Dominik Januszewski, Marian Noga, Piotr
Prugar, Zbysław Dobrowolski i.e. 5 out of 8 Audit Committee members (63%)
− As at the date of publication of this report: Joanna Zakrzewska, Tadeusz Kocowski, Dominik Januszewski, Marian
Noga, Piotr Prugar, Zbysław Dobrowolski i.e. 6 out of 9 Audit Committee members (67%)
The Supervisory Board evaluated the submitted declarations regarding the fulfilment of independence criteria and adopted
appropriate resolutions regarding the verification of the declarations of members of the Supervisory Board’s Audit
Committee.
The independence of the Committee Members was assessed in the context of their relationships within the Group and
related parties, as defined by the Accounting Act of 29 September 1994, including principle 2.3. of DPSN 2021, i.e. the
absence of any real and significant relationships with a shareholder holding at least 5% of the total number of votes in the
company. The declarations made were subject to verification by the Company, taking into account in particular the essence
of independence, the concept of material business relations and the nature of the group and related parties. In 2024, one
of the Members of the Committee submitted information on a change in independence status and on new circumstances
that could affect its assessment.
Qualifications, knowledge and skills of the Audit Committee members
The qualifications of the Audit Committee Members in the areas of accounting or the auditing of financial statements, as
well as knowledge and skills in the sector in which KGHM Polska Miedź S.A. operates, resulted from the education,
experience and professional practice of the Audit Committee Members. Following is detailed information on their
qualifications in the areas of accounting or the auditing of financial statements as well as their knowledge and skills in the
sector in which KGHM Polska Miedź S.A. operates.
Qualifications in the scope of accounting or auditing of financial statements
from 1 January
2024 to 13 February
2024
Wojciech Zarzycki was selected as a Member of the Audit Committee possessing qualifications in the field of
accounting or the auditing of financial statements. In 2004 he obtained his master’s degree from the Faculty of
Economics at Poznań University of Economics and Business. He has been a statutory auditor since 2008 and he
is a Member of the Polish Chamber of Statutory Auditors. He is a Member of the Association of Chartered Certified
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Accountants (ACCA), and since 2002 he has held the title of Chartered Financial Analyst (CFA) in the United States,
and is a member of the CFA Institute and CFA Society Poland. Since 2011 employed as a Manager, and
subsequently as a Financial Director of companies of the Allianz Group in Poland (prior to the merger of Aviva
companies). From 2016 to 2022 he was a Member of the Supervisory Board of KGHM TFI S.A. From 2005 to 2011
he worked as an Auditor in the company KPMG Audyt, conducting audits of the financial statements of insurance
companies. From 2003 to 2005 he worked as an Accountant in the company Morison Finansista-Finlex.
from 13 February
2024 to 31
December 2024
Dominik Januszewski has been selected as a Member of the Audit Committee by virtue of his knowledge and skills
in accounting and auditing financial statements. Compliance with the requirements concerning the knowledge
and skills pertaining to accounting and auditing financial statements was validated by means of verifying
appropriate documents concerning his education and work experience. In 1994, Dominik Januszewski graduated
from the Faculty of Economics and Sociology of the University of Łódź, where he studied Finance and Banking.
Since 2021, he has been a qualified statutory auditor.
Between 1994 and 2002 Dominik Januszewski worked at Arthur Andersen Polska, first as a consultant in the
financial institution audit department before moving on to become a Manager responsible for auditing financial
statements. In 2002, he joined Ernst & Young Polska as a Senior Manager in the audit department of financial
institutions. In the years 2005-2019, he was a Partner at Ernst & Young Polska and during this period, among
others in the years 2007-2015, he served as a leader of the audit department of financial institutions at Ernst &
Young Polska.
Industry knowledge and skills
from 01 January
2024 to 13 February
2024
and subsequently
from 13 January
to 31 December
2024
Bogusław Szarek was selected as a member possessing knowledge and skills in the sector in which
KGHM Polska Miedź S.A. operates resulting from many years of employment (since 1982) in KGHM
Polska Miedź S.A. as well as being a member of the Supervisory Board of KGHM Polska Miedź S.A.
since 2012, as a Member of the Supervisory Board of KGHM Polska Miedź S.A. elected by
employees.
Firm auditing the financial statements
The following are applicable in KGHM Polska Miedź S.A.:
− Policy of KGHM Polska Miedź S.A. for the selection of the auditing firm to conduct audits of the financial statements, or
attestation of the sustainable development reporting (hereafter: the “Selection policy”)
− Policy for permitted non-auditing services or attestation of the sustainable development reporting to be provided by
the auditing firm conducting audits of the KGHM Polska Miedź S.A. Group through entities associated with the auditing
firm and through members of the auditing firm’s network, (hereafter: the “Services policy”).
− Procedure of KGHM Polska Miedź S.A. concerning the selection of the audit firm auditing the financial statements or
providing attestation of the sustainable development reporting (hereafter: the “Selection procedure”).
Main tenets of the Selection policy:
− maximum uninterrupted period of providing services by a given auditing firm of audits of the financial statements
amounting to 10 years, followed by a grace period of at least 4 years, under condition that the key certified auditor may
not carry out the statutory audit for more than 5 years;
− transparency, accuracy and honesty in all procedures involving the selection of the auditing firm;
− equal opportunity for all of the auditing firms meeting the Company’s requirements to be selected;
−
− documentation of selection procedures performed and evaluation of offers in a manner which ensures the
transparency of the actions taken.
Main assumptions of the Services Policy:
− limitation of the scope of permitted non-auditing services ordered from the auditing firm or a related entity thereof;
maximum total remuneration for the services provided in this regard is limited to 70% of the average remuneration
paid out during the last three financial years due to providing statutory auditing services;
− need to review the purpose and necessity for purchasing permitted non-auditing services from the auditing firm or a
related entity thereof on an individual basis;
− active participation of the Audit Committee in the process of evaluating threats to and the security of the independence
of the auditing firm in providing permitted non-auditing services;
− signing of an agreement and the providing of services, as well as any change in the scope of the services or
remuneration thereof, will be possible only after the Audit Committee has provided the requisite consent.
The entity authorised to audit the financial statements of KGHM Polska Miedź S.A. for the years 2019-2028 is
PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt sp.k. In 2018, following the procedure for
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selecting an audit firm that meets the applicable criteria, an audit firm was selected for the period of 2019-2021. In 2021,
an annex to the agreement was signed extending the term of the agreement to 2022-2024, which was preceded, in
accordance with the policy for selecting an audit firm, by an assessment of the services provided to date by the audit firm
by the Audit Committee and its recommendation to the Supervisory Board to extend the term of the agreement. In 2023,
another annex to the agreement was signed, extending the term of the agreement to 2025-2028, also preceded by an
evaluation of the cooperation with the audit firm and the services it provided, and a recommendation by the Audit
Committee to extend the agreement with PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt
sp. k.
The entity authorised to carry out the service of attesting the sustainable development reporting of the KGHM Polska Miedź
S.A. Group, which is part of the Management Board Report on the operations of KGHM Polska Miedź S.A. and the KGHM
Polska Miedź S.A. Capital Group for the years 2024-2028, is PricewaterhouseCoopers Polska spółka z ograniczoną
odpowiedzialnością Audyt sp.k. The selection of the auditing firm in 2024 was made as a result of an organised procedure
of selection, which met the existing criteria.
The procedure was developed by the Audit Committee and complies with the requirements of:
− The Regulation of the European Parliament and of the Council (EU) No. 537/2014 on detailed requirements for statutory
audits of financial statements of public-interest entities;
− The Act dated 11 May 2017 on certified auditors, auditing firms and public oversight;
− The Accounting Act of 29 September 1994.
Based on the statement of the Supervisory Board, the Management Board of the Company confirms that the selection of
the audit firm to audit the annual financial statements for 2024 and the annual consolidated financial statements for 2024
was carried out in accordance with the regulations, including those related to the selection and procedure for the selection
of the audit firm, indicating that:
− the audit firm and members of the audit team fulfil the conditions for preparing an impartial and independent audit
report of the annual financial statements and annual consolidated financial statements in accordance with applicable
regulations, professional standards and professional ethics,
− the applicable regulations regarding the turnover of the audit firm and the key auditor as well as the mandatory grace
periods are respected,
− The Company has a policy regarding the selection of an audit firm and a policy regarding the provision of additional
non-audit services to the audit firm by a related entity of the audit firm or a member of its network, including services
conditionally exempted from the prohibition of provision by the audit firm.
In 2024, the following permitted non-audit services were provided to the Company by the audit firm examining its financial
statements:
− an opinion for the purposes of exemption from excise duty on electricity in energy-intensive plants in accordance with
art. 31d sec. 8 of the Act dated 6 December 2008 on excise tax;
− an independent attestation service for managing the responsible gold and silver supply chain to confirm compliance
with the requirements of the London Bullion Market Association ("LBMA");
− an assurance service to assess the accuracy of the calculation of data in order to comply with the requirements of Article
52 sec. 3 and Article 23 sec. 2 and 3 of the Act on Renewable Energy Sources of 20 February 2015;
− verification of the financial covenants in relation to the loan received from the European Investment bank, assessment
of the report in accordance with the provisions of the Government Program "Assistance to energy-intensive industries
related to natural gas and electricity prices in 2023";
− assessment of the report in accordance with the provisions of the Government Program "Assistance to energy-intensive
industries related to natural gas and electricity prices in 2024";
− an opinion for the purposes of exemption from excise duty on electricity in energy-intensive plants in accordance with
art. 31d sec. 8 of the Act of 6 December 2008 on excise tax - recalculation of years 2018, 2021, 2022;
− voluntary attestation of selected CSRD indicators for 2023;
− performing attestation services on the correctness of the determination of the PKD code of the prevailing activity and
assessment of whether the company is not in a difficult position
− ocena Sprawozdania o wynagrodzeniach Zarządu oraz Rady Nadzorczej KGHM Polska Miedź S.A.,
− przegląd sprawozdania finansowego za I półrocze 2024,
− atestacja dająca ograniczoną pewność w zakresie Sprawozdawczości zrównoważonego rozwoju Grupy Kapitałowej za
rok 2024,
− badanie informacji finansowej specjalnego przeznaczenia Zagłębia Sudbury (carve-out)..
In each case, the Audit Committee evaluated the independence of the auditing firm and expressed its consent to the
provision of permitted services.
Detailed information on remuneration of the entity entitled to audit the financial statements for the review and audit of
financial statements and other remuneration is presented in note 12.9 of the separate and consolidated financial
statements.
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Description of the diversity policy in relation to the management and supervisory bodies
The Company does not have a formally written Diversity Policy for the Management Board and the Supervisory Board in
place. The Company monitors the progress of the implementation of Directive (EU) 2022/2381 of the European Parliament
and of the Council of 23 November 2022 on improving gender balance among directors of listed companies and related
measures, into the national legal system. The adoption of the diversity policy for the Company's governing bodies will take
place in accordance with the deadline indicated in the Act amending the Act on public offerings and the conditions for
introducing financial instruments into the organised trading system and on public companies, and the Act on the
implementation of certain provisions of the European Union on equal treatment. The Company has already started work
on the preparation of the policy document, with particular reference to age, disability, gender or education and work
experience, together with an indication of the objectives of the policy and individual quantitative targets set with a view to
improving gender balance.
However, diversity management also applies to the members of the Supervisory Board and the Management Board of
KGHM Polska Miedź S.A. In 2024, the management and supervisory staff was composed of persons of various age and
experience. In selecting the best candidate for each position on the Management Board, the Supervisory Board is guided,
among other things, by an assessment of the aptitude directly related to the performance of the duties relating to the
position for which it has announced a selection procedure.
Table 75. Age structure and length of service of members of the Supervisory Board and the Management Board as at
the date of the report
Structure of age diversity
< 40 years
40-50 years
51-60 years
> 60 years
Supervisory Board of KGHM Polska Miedź S.A.
-
1
2
6
Management Board of KGHM Polska Miedź S.A.
-
2
2
2
Employment in KGHM Polska Miedź S.A.
< 5 years
5-10 years
11-20 years
> 20 years
Supervisory Board of KGHM Polska Miedź S.A.
7
-
-
2
Management Board of KGHM Polska Miedź S.A.
3
-
-
3
Information on gender representation in the governing bodies, distinguishing between non-executive directors
(Supervisory Board of KGHM Polska Miedź S.A.) and executive directors (Management Board of KGHM Polska Miedź S.A.)
within the meaning of Directive (EU) 2022/2381 of the European Parliament and of the Council of 23 November 2022 on
improving gender balance among directors of listed companies and related measures, is presented below.
Table 76. Gender representation in the Management Board and the Supervisory Board as at 1 January 2024
Structure of gender diversity
Number of women (% share)
Number of men (% share)
Supervisory Board of KGHM Polska Miedź S.A.
2 (20%)
8 (80%)
Management Board of KGHM Polska Miedź S.A.
0 (0%)
5 (100%)
Table 77. Gender representation in the Management Board and the Supervisory Board as at 31 December 2024
Structure of gender diversity
Number of women (% share)
Number of men (% share)
Supervisory Board of KGHM Polska Miedź S.A.
0 (0%)
9 (100%)
Management Board of KGHM Polska Miedź S.A.
1 (17%)
5 (83%)
Table 78. Diversity representation by gender in the Management Board and the Supervisory Board as at the date of the
report
Structure of gender diversity
Number of women (% share)
Number of men (% share)
Supervisory Board of KGHM Polska Miedź S.A.
1 (10%)
9 (90%)
Management Board of KGHM Polska Miedź S.A.
1 (17%)
5 (83%)
3.3.3 Description of the application of DPSN 2021
Table 79. The principles of Section II of DPSN 2021 - Management Board, Supervisory Board, applied in KGHM Polska
Miedź S.A.
2.3 At least two members of the supervisory board meet the criteria of being independent referred to in the Act of 11 May
2017 on Auditors, Audit Firms and Public Supervision, and have no actual and material relations with any shareholder who
holds at least 5% of the total vote in the company.
The principle is applied.
2.5 Members of the supervisory board and members of the management board who vote against a resolution may have their
dissenting vote recorded in the minutes.
The principle is applied. The relevant provisions can be found in the Bylaws of the Supervisory Board.
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2.6. Functions on the management board of a company are the main area of the professional activity of management board
members. Management board members should not engage in additional professional activities if the time devoted to such
activities prevents their proper performance in the company.
The principle is applied.
2.7. A company’s management board members may sit on corporate bodies of companies other than members of its group
subject to the approval of the supervisory board.
The principle is applied. The Supervisory Board passed 8 resolutions in this regard in 2024.
2.8. Supervisory board members should be able to devote the time necessary to perform their duties.
The principle is applied.
2.9. The chair of the supervisory board should not combine this function with that of chair of the audit committee of the
supervisory board.
The principle is applied.
2.10. Companies allocate administrative and financial resources necessary to ensure efficient functioning of the supervisory
board in a manner adequate to their size and financial standing.
The principle is applied.
2.11. In addition to its responsibilities laid down in the legislation, the supervisory board prepares and presents an annual
report to the annual general meeting once per year. Such report includes at least the following:
2.11.1. information about the members of the supervisory board and its committees, including indication of those
supervisory board members who fulfil the criteria of being independent referred to in the Act of 11 May 2017 on Auditors,
Audit Firms and Public Supervision and those supervisory board members who have no actual and material relations with
any shareholder who holds at least 5% of the total vote in the company, and information about the members of the
supervisory board in the context of diversity;
2.11.2. summary of the activity of the supervisory board and its committees;
2.11.3. assessment of the company’s standing on a consolidated basis, including assessment of the internal control, risk
management and compliance systems and the internal audit function, and information about measures taken by the
supervisory board to perform such assessment; such assessment should cover all significant controls, in particular reporting
and operational controls;
2.11.4. assessment of the company’s compliance with the corporate governance principles and the manner of compliance
with the disclosure obligations concerning compliance with the corporate governance principles defined in the Exchange
Rules and the regulations on current and periodic reports published by issuers of securities, and information about
measures taken by the supervisory board to perform such assessment;
2.11.5. assessment of the rationality of expenses referred to in principle 1.5;
Principles 2.11.1-2.11.5 are applied.
The annual report of the Supervisory Board is available at www.kghm.com in the section General Meeting | KGHM Polska Miedź S.A.
Corporate website.
3.3.4 Explanations on the waiver of the application of DPSN 2021 principles
In accordance with the published Statement on the Company's compliance with the principles in section II of DPSN 2021,
the following principles are partially applied or are not applied:
Table 80. Principles in section II of DPSN 2021 applied partially or not applied in KGHM Polska Miedź S.A.
2.1 The Company should have in place a diversity policy applicable to the management board and the supervisory board,
approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity goals and
criteria, among others including gender, education, expertise, age and professional experience, and specifies the target
dates and the monitoring systems for such goals. With regard to gender diversity of corporate bodies, the participation of
the minority group in each body should be at least 30%
The principle is partially applied.
A "Diversity Declaration" has been implemented in the Group’s Parent Entity due to the international scope of its activities, cultural
differences and the specific nature of the industries in which the Group operates. The Company does not currently have a Diversity
Policy in place; however, in its operations, the Company guarantees the implementation of diversity principles in the KGHM Group and
the promotion and dissemination of these principles for the respect of diversity in the workplace. The Company creates an
organisational culture based on mutual respect and equality, regardless of, among others: ethnic origin, age, gender, sexual orientation,
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nationality, citizenship, religious orientation, political convictions or trade union membership. The practical application of the
“Declaration of Diversity” results in fully respecting gender equality and sufficient selection in terms of expected skills, knowledge,
experience and education. The Company monitors the progress of the implementation of Directive (EU) 2022/2381 of the European
Parliament and of the Council of 23 November 2022 on improving gender balance among directors of listed companies and related
measures, into the national legal system. The adoption of the gender equality policy in the Company's governing bodies will take place
in accordance with the deadline indicated in the Act amending the Act on public offering and the conditions for introducing financial
instruments into the organised trading system and on public companies and the Act on the implementation of certain provisions of the
European Union on equal treatment.
2.2 Persons who make decisions to elect members of the management board or the supervisory board of companies should
ensure that the composition of those bodies is diverse by appointing persons ensuring diversity, among others in order to
achieve the target minimum participation of the minority group of at least 30% according to the goals of the established
diversity policy referred to in principle 2.1.
The principle is partially applied.
As described in reference to principle 2.1, the Company does not currently have a Diversity Policy. Nonetheless the Company aims at
ensuring reasonable diversity in terms of the members of the Supervisory Board and Management Board. The Company, through
internal acts such as the Bylaws of the Supervisory Board or the Regulations for the Conduct of the Qualification Procedure for Members
of the Management Board, aims to ensure diversity and versatility in the management bodies. The management and supervisory staff
is composed of people of different genders, ages and experience. The requirements and expectations for the competence of the
appointed members of the Supervisory Board are set out by the Company in the normative acts that are available to the shareholders
making the decision to appoint a member to the Supervisory Board. The adoption of the gender equality policy in the Company's
governing bodies will take place in accordance with the deadline indicated in the Act amending the Act on public offering and the
conditions for introducing financial instruments into the organised trading system and on public companies and the Act on the
implementation of certain provisions of the European Union on equal treatment.
2.4 The supervisory board and the management board vote in an open ballot unless otherwise required by law.
The principle is partially applied.
KGHM Polska Miedź S.A. strives at every stage of its operations to apply this principle and for full transparency in the process of the
adopting of resolutions by these bodies. The Bylaws of the Supervisory Board and Management Board stipulate as a principle that voting
shall be conducted in open ballot, which does not preclude the right of any Member of these bodies to request voting by secret ballot.
The Company anticipates that, in a small number of situations involving the adoption of resolutions by the Supervisory Board regarding
personal matters, there may occur cases of voting by secret ballot at the request of Members of the Supervisory Board or the
Management Board.
2.11.6 The annual report, which, in addition to the activities required by law, is prepared once a year by the supervisory
board and submitted to the general meeting of shareholders for approval, includes information regarding the degree of
implementation of the diversity policy applicable to the management board and the supervisory board, including the
achievement of goals referred to in principle 2.1
The principle is not applied.
As indicated in the explanation regarding the non-application of principle 2.1. of the DPSN, the Company does not currently have a
Diversity Policy in place. The planned adoption of the gender equality policy in the Company's governing bodies in accordance with the
deadline indicated in the Act amending the Act on public offering and the conditions for introducing financial instruments into the
organised trading system and on public companies and the Act on the implementation of certain provisions of the European Union on
equal treatment will enable the fulfilment of reporting obligations related to the implementation level of this policy.
3.4 SYSTEMS AND FUNCTIONS
KGHM Polska Miedź S.A., under the principles indicated in section 3 of DPSN 2021, strives to maintain effective
systems and functions as essential tools for supervising the Company in all of its operating activities.
3.4.1 Description of the application of DPSN 2021
Table 81. The principles of Section III of DPSN 2021 - Internal systems and functions, applied in KGHM Polska Miedź S.A.
3.1. A listed company maintains efficient internal control, risk management and compliance systems and an efficient
internal audit function adequate to the size of the company and the type and scale of its activity; the management board is
responsible for their functioning.
The principle is applied.
3.2. The Company’s organisation includes units responsible for the tasks of individual systems and functions unless it is not
reasonable due to the size of the company or the type of its activity.
The principle is applied.
Responsibility for the fulfilment of these obligations and their role in these systems reflects the principles existing in the organization
for the breakdown of duties at various operational and management levels and support the achievement of defined business goals. As
shown in the adopted diagram, the Company applies the model of three lines of defence (3LoD), assigning to the first line management
risk through business units and risk owners, as well as control mechanisms in the Company’s operational processes, to the second the
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function of support of risk management, and to the third – internal audit controlling the other lines. A detailed diagram of the three
lines of defence in the risk and compliance management system can be found in section 1.5 Risk management.
3.3. A company participating in the WIG20, mWIG40 or sWIG80 indices appoints an internal auditor to head the internal audit
function in compliance with generally accepted international standards for the professional practice of internal auditing. In
other companies which do not appoint an internal auditor who meets such requirements, the audit committee (or the
supervisory board if it performs the functions of the audit committee) assesses on an annual basis whether such person
should be appointed.
The principle is applied.
The company has appointed an internal auditor to manage the internal audit function. The Internal Audit Regulations adopted for use
are based on international standards for the professional practice of internal auditing
3.4. The remuneration of persons responsible for risk and compliance management and of the head of internal audit should
depend on the performance of delegated tasks rather than short-term results of the company.
The principle is applied.
The remuneration of the Company's risk management and compliance officers and the head of internal audit does not depend on the
short-term performance of the company, but primarily on the performance of the tasks. The company's result is not a key vehicle for
the remuneration of the persons referred to in Principle 3.4.
3.5. Persons responsible for risk management and compliance report directly to the president or other member of the
management board.
The principle is applied.
In accordance with the applicable Organisational Regulations, the Director of the Corporate Risk Management and Compliance
Department and the Executive Director for Audit report directly to the President of the Management Board.
3.6. The head of internal audit reports organisationally to the president of the management board and functionally to the
chair of the audit committee or the chair of the supervisory board if the supervisory board performs the functions of the
audit committee.
The principle is applied.
The head of internal audit reports organisationally to the President of the Management Board and functionally to the chairman of the
audit committee.
3.8. The person responsible for internal audit, or the management board if such function is not performed separately in the
company, reports to the supervisory board at least once per year with their assessment of the efficiency of the systems and
functions referred to in principle 3.1, and presents a relevant report.
The principle is applied.
In terms of corporate risk management systems, compliance activities and internal audit (including in terms of financial reporting) the
Audit Committee engages in regular monitoring of these functions. The corporate risk management and the compliance management
system undergoes an annual assessment of its effectiveness and the results are reported to the Audit Committee.
3.9. The supervisory board monitors the efficiency of the systems and functions referred to in principle 3.1 among others on
the basis of reports provided periodically by the persons responsible for the functions and the company’s management
board, and makes annual assessment of the efficiency of such systems and functions according to principle 2.11.3. Where the
company has an audit committee, the audit committee monitors the efficiency of the systems and functions referred to in
principle 3.1, which however does not release the supervisory board from the annual assessment of the efficiency of such
systems and functions.
The principle is applied.
The Supervisory Board prepares and presents to the Ordinary General Meeting for its approval the annual financial statements, which
among others contain an assessment of the standing of the Company on a consolidated basis, including an evaluation of the internal
control, risk management and compliance systems and the internal audit function, with information on the actions taken by the
Supervisory Board of KGHM Polska Miedź S.A. in performing this assessment.
This assessment comprises all of the important control mechanisms, including in particular those involving reporting and the operations,
and is prepared among others based on documents received from the Management Board and from persons managing risk and
compliance and also managing internal audit regarding information on the effectiveness of these functions, discussions held with the
participation of the Management Board and other individuals invited to attend meetings of the Supervisory Board, and also takes into
account the financial statements and the reports of the Management Board on the activities of KGHM Polska Miedź S.A. and of the
KGHM Polska Miedź S.A. Group, and based on the conclusions from the audit of the Company’s accounts by a Certified Auditor and
other audits.
3.4.2 Main characteristics of internal control and risk management systems as applied by KGHM Polska Miedź
S.A. in the process of preparing separate and consolidated financial statements
Supervision of the
application of uniform
accounting principles by
the Parent Entity and the
In order to ensure truthfulness and accuracy in the keeping of the accounting records of the Parent Entity and
the uniformity of the accounting principles applied when preparing the financial statements of Group
subsidiaries, the Management Board of the Parent Entity has introduced for continuous use an Accounting
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companies of the KGHM
Polska Miedź S.A. Group
during the process of
preparing reporting
packets to prepare the
consolidated financial
statements of the KGHM
Polska Miedź S.A. Group
Policy for the Group in accordance with International Financial Reporting Standards approved by the
European Union which is regularly updated in compliance with new regulations.
Control over the accounting policies applied in the process of preparing the financial statements of KGHM
Polska Miedź S.A. and of the Group subsidiaries is based on the control mechanisms embedded in the
functioning of the reporting systems.
The reporting packets of subsidiaries are also reviewed by appropriate services in the Parent Entity for
consolidation purposes.
Centralised financial and
accounting services
KGHM Polska Miedź S.A. performs its accounting activities within a centralised financial and accounting
services structure. Bookkeeping in the Parent Entity is performed by the Accounting Services Center under
the Head Office of KGHM Polska Miedź S.A. The centralisation of accounting services under a process model
which provides for the transparent breakdown of duties and responsibilities ensures minimisation of the risk
of bookkeeping errors and high-quality of financial statements. Actions are systematically being taken aimed
at optimising the functioning of the accounting services structures.
Finance and accounting
systems
KGHM Polska Miedź S.A. keeps accounting records in an integrated IT system. The modular structure of this
system ensures a transparent segregation of processes and duties, coherence of accounting records and
control over ledgers: special purpose ledger, general ledger and sub-ledgers. Access to this data at various
levels and in various units is available via a well-developed reporting system. The Parent Entity continuously
adapts the IT information system to changing accounting principles or other legal standards. The solutions
applied by the Parent Entity are implemented in the IT systems of the Group’s subsidiaries.
To ensure the adequate utilisation and protection of systems and data, as well as secure access to data and
computer equipment, appropriate organisational and systemic solutions have been implemented. Access to
the resources of the financial and accounting system, as well as financial reporting, is limited by a system of
authorisations that are granted to authorised employees solely with respect to the duties which they carry
out. These entitlements are subject to regular review and audits. Control over this access is carried out at
each stage of financial statements preparation, beginning with the entering of source data, through the
processing of data, to the generation of output information.
A key element in limiting the risk of errors and misstatements in accounting for economic activities are the
actions taken which are aimed at increasing the use of IT tools to automate control over and the settlement
of purchasing processes in the Company. These actions include:
− the Workflow system of electronic document settlement and approval;
− the system for transmitting data between the system in the Parent Entity and IT systems in Group
companies;
− customer settlement based on e-invoices for procurement and sales.
Corporate risk
management
Under the Corporate Risk Management Policy and Procedures and the Corporate Risk and Compliance
Committee Rules, corporate risk management is an on-going process in the Group. Risks associated with the
Group’s various operations are continuously identified, assessed and analysed in terms of their possible
limitation.
The Executive Director for Risk and Audit who, through his subordinate Corporate Risk Management and
Compliance Department, monitors and escalates risks and incident reporting, is responsible for overseeing
the entire corporate risk management process and developing the methods and tools used by managers in
the Parent Entity, all subsidiaries and projects.
These activities also comprise risk management with respect to the process of preparing the consolidated
financial statements of the Group.
The process of corporate risk management is annually subjected to an effectiveness audit (in compliance
with the guidelines of “Best Practice for GPW Listed Companies 2021”).
Detailed information regarding the risk management system applied in the KGHM Polska Miedź S.A. Group
together with an indication of the key risk is presented in section 1.5 Risk management.
Internal audit
A fundamental element of risk management with respect to the functioning of control mechanisms and the
existence of risks in the operations of KGHM Polska Miedź S.A. is the work carried out by the Internal Audit
Department. This work also indirectly strengthens the process of preparing financial statements as well as
their accuracy.
The Internal Audit Department carries out its tasks based on the ”Audit Plan” for the given calendar year
approved by the Management Board of KGHM Polska Miedź S.A. and assessed by the Audit Committee of
KGHM Polska Miedź S.A.
The goal of an audit is to provide the Management Board and the Audit Committee of the Supervisory Board
of KGHM Polska Miedź S.A. with independent and objective information on internal control and risk
management systems as well as with analyses of business processes within KGHM Polska Miedź S.A. and in
the Group’s companies. Independently from internal audit and institutional control, the obligation fully
remains in KGHM Polska Miedź S.A. for each employee to exercise self-control in respect of their duties and
for all levels of management to exercise their control as part of their coordination and supervision duties.
External audit
In accordance with prevailing law, the consolidated financial statements of the KGHM Polska Miedź S.A. Group
are submitted for half-year review and annual auditing by a certified auditor. The Supervisory Board selects
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Translation from the original Polish version
the certified auditor through a tender process, based on the recommendations of the Supervisory Board’s
Audit Committee and the report on the tender conducted by the Committee.
The appropriate entity to audit the financial statements of KGHM Polska Miedź S.A. for the years 2019-2028
is PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp.k. As part of the audit
work performed the certified auditor performs, on the basis of prevailing audit methodology, an independent
evaluation of the accounting principles applied by Parent Entity in preparing the financial statements and the
accuracy and reliability of the separate and consolidated financial statements.
Supervision over the
process of financial
reporting
The body which supervises the process of financial reporting in KGHM Polska Miedź S.A. and which cooperates
with the independent auditor is the Supervisory Board’s Audit Committee, which is appointed by the
Supervisory Board of the Parent Entity. The Audit Committee, in accordance with its duties as set forth in the
Act dated 11 May 2017 on certified auditors, auditing firms and public oversight, in particular:
− monitors the process of financial reporting in terms of compliance with the Accounting Policy approved by
the KGHM Polska Miedź S.A. Group and prevailing laws;
− monitors the effectiveness of internal control systems, internal audit and risk management;
− monitors the independence of the certified auditor and of the entity entitled to audit financial statements,
and
− conducts the process of selecting the entity entitled to audit financial statements of the Parent Entity to
provide a recommendation to the Supervisory Board.
Monitoring of the process of financial reporting and assessment of the financial statements by the Supervisory
Board is the final step of the review and control carried out by this body, ensuring the reliability and accuracy
of the data presented in the separate and consolidated financial statements of the KGHM Polska Miedź S.A.
Group.
Proper management of the process of keeping records and preparing financial statements ensures the
security and the high quality of the information.
3.4.3 Explanations on the waiver of the application of DPSN 2021
In accordance with the published Statement on the Company's compliance with the principles in section III of DPSN 2021,
the following principle does not apply to the Company:
Table 82. Principles of Section III of DPSN 2021 not applicable to KGHM Polska Miedź
3.7 Principles 3.4 – 3.6 apply also to members of the company’s group which are material to its activity if they appoint
persons to perform such tasks.
− (see principle 3.4. - The remuneration of persons responsible for risk and compliance management and of the head of internal audit
should depend on the performance of delegated tasks rather than short-term results of the company.
− Principle 3.5. - Persons responsible for risk management and compliance report directly to the president or another member of the
management board.
− Principle 3.6. - The head of internal audit reports organisationally to the president of the management board and functionally to the
chair of the audit committee or the chair of the supervisory board if the supervisory board performs the functions of the audit
committee.
The principle is not applicable to the Company.
In entities of the Company’s group, persons have not been designated to fulfil the tasks indicated in principles 3.4-3.6, but persons have
been designated to function as risk coordinators and compliance coordinators, who report directly to persons responsible for risk
management and compliance in the Parent Entity. At present, the Company is not considering, in the case of entities of the Company’s
group, the building of a structure to comply with principles 3.4.-3.6. with respect to the functions of risk management and compliance.
In relation to the audit function, tasks in entities of the Company’s group are performed by the Internal Audit Department of the Parent
Entity.
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Translation from the original Polish version
3.5 GENERAL MEETING AND RELATIONS WITH SHAREHOLDERS
KGHM Polska Miedź S.A., under the principles indicated in section 4 of DPSN 2021, strives to activate stakeholders
and their engagement in the Company’s affairs, mainly expressed in their active, personal or through a proxy,
participation in general meetings.
3.5.1 General Meetings of KGHM Polska Miedź S.A. (General Meeting)
The General Meeting of KGHM Polska Miedź S.A. is the Company’s highest authority. It meets in either ordinary or
extraordinary form, based on generally prevailing law, the Statutes of the Company and the “Bylaws of the General Meeting
of KGHM Polska Miedź S.A. with its registered head office in Lubin”. An Ordinary General Meeting is convened within six
months of the end of each financial year. General Meetings are convened by the Company’s Management Board. In
situations defined by the Commercial Partnerships and Companies Code, General Meetings may be convened by the
Supervisory Board or by shareholders. The Statutes of the Company also authorise the Polish State Treasury to convene a
General Meeting. The General Meeting is convened by an announcement published on the Company website and in the
manner set forth in the Act dated 29 July 2005 on public offerings and conditions governing the introduction of financial
instruments to organised trading, and on public companies. A General Meeting may adopt resolutions if at least one-fourth
of the share capital is represented. Resolutions are adopted by a simple majority of votes cast, unless the law or the
Company’s Statutes state otherwise. Additional issues related to the functioning of the General Meeting are regulated by
the “Bylaws of the General Meeting of KGHM Polska Miedź S.A. with its registered head office in Lubin” adopted by the
General Meeting on 17 May 2010, which are available on the Company’s website, www.kghm.com.
The duties of the General Meeting include in particular:
− examining and approving the report of the Management Board on the Company's activity and the financial statements;
including the financial statements of the Group, for the past financial year;
− adopting resolutions on the appropriation of profits or coverage of losses;
− acknowledging the fulfilment of duties performed by members of the bodies of the Company;
− changing the subject of the Company's activity;
− changes in the Company Statutes;
− increasing or decreasing the share capital;
− the manner and conditions for retiring shares;
− merging, splitting and transforming the Company;
− dissolving and liquidating the Company;
− issuing convertible bonds or senior bonds;
− consenting to the disposal and lease of an enterprise or of an organised part thereof, as well as the attachment
of limited property rights to same;
− all decisions relating to claims for redress of damage suffered during the foundation of the Company, or from
management or supervisory activities;
− purchase of the Company's own shares, which are to be offered to employees or persons who were employed by the
company or by related companies for a period of at least three years;
− establishing principles of the remuneration of members of the Supervisory Board, and
− establishing principles of the remuneration of members of the Management Board.
The schedule of work on organising the General Meetings of the Company is planned in such a way as to ensure that
the obligations towards shareholders are properly met and to enable them to exercise their rights.
Amongst the regulations of the Commercial Partnerships and Companies Code, in respect of the organisation of general
meetings and shareholder rights, the Company applies only those regulations which are obligatory, i.e. those which require
the publication of announcements and relevant materials for the general meeting on the website and the use of electronic
forms of contact with shareholders. Regulations enabling shareholders to participate in general meetings using electronic
means of communication are not applied.
Information on the General Meetings of Shareholders held in 2024
Table 83. General Meetings of Shareholders in 2024 and to the date of preparation of this report
13 February 2024
at the Company's
head office
Extraordinary General Meeting of KGHM Polska Miedź S.A., convened at the request of a Shareholder representing
at least 1/20 of the capital, i.e. the State Treasury. The Extraordinary General Meeting of Shareholders passed
resolutions on changes in the composition of the Supervisory Board. The foregoing results from the General
Meeting's competence to appoint and dismiss members of the Company's Supervisory Board and serves to exercise
the shareholder's right to shape the composition of the supervisory body in the Company.
7 June 2024
at the Company's
head office
Ordinary General Meeting of Shareholders, convened on the basis of an announcement by the Management Board
of KGHM Polska Miedź S.A. The General Meeting adopted resolutions on:
− the approval of the Financial Statements of KGHM Polska Miedź S.A. for the financial year ended 31 December
2023,
− the approval of the Consolidated Financial Statements of KGHM Polska Miedź S.A. for the financial year ended 31
December 2023,
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Translation from the original Polish version
− the approval of the Management Board’s Report on the activities of KGHM Polska Miedź S.A. and the KGHM
Polska Miedź S.A. Group in 2023,
− coverage of loss for 2023,
− payment of dividends on retained earnings and determination of the dividend record date and dividend payment
date,
− the approval of the Report of the Supervisory Board of KGHM Polska Miedź S.A. for 2023,
− evaluation of the Remuneration Report of members of the Management Board and Supervisory Board of KGHM
Polska Miedź S.A. for 2023.
The General Meeting convened on 7 June 2024 resolved to order an adjournment of the meeting until 5 July 2024, at
11.00 a.m. and determined that the meeting after the adjournment would be held at the Company's registered head
office in Lubin.
5 July 2024
at the Company's
head office
(resumed session)
The General Meeting adopted resolutions on:
− lack of approval of the fulfilment of duties of individual Members of the Management Board of KGHM Polska
Miedź S.A. for 2023,
− approval of the fulfilment of duties of individual Members of the Supervisory Board of KGHM Polska Miedź S.A.
for 2023.
− amendments to the “Remuneration Policy of Members of the Management Board and the Supervisory Board of
KGHM Polska Miedź S.A.”
8 January 2025
at the Company's
head office
Extraordinary General Meeting of KGHM Polska Miedź S.A., convened at the request of Shareholders representing at
least 1/20 of the capital, i.e. Nationale-Nederlanden Otwarty Fundusz Emerytalny, PZU "Złota Jesień" Otwarty Fundusz
Emerytalny, Generali Otwarty Fundusz Emerytalny. The Extraordinary General Meeting of Shareholders passed a
resolution on changes in the composition of the Supervisory Board. The foregoing results from the General Meeting's
competence to appoint and dismiss members of the Company's Supervisory Board and serves to exercise the
shareholder's right to shape the composition of the supervisory body in the Company.
All documents that need to be disclosed are available to the General Meeting participants in the General Meeting section:
General Meeting | KGHM Corporate website .
3.5.2 Principles regarding amendments to the Company’s Statutes
The right to make amendments to the Statutes lies within the competence of the General Meeting. It is performed as a
result of the General Meeting passing a relevant resolution and making an entry in the Register of Entrepreneurs of the
National Court Register. This entry is constitutive in nature, meaning that a General Meeting resolution adopted in
accordance with the formal requirements has no effect until it is registered. Prior to the registration, an amendment to the
Statutes has no legal effect.
A three-quarters majority of the votes cast at a General Meeting is needed to pass a resolution to amend the Statutes. There
is also a general requirement for at least 1/4 of the share capital to be represented in order for the General Meeting to pass
resolutions. In addition, the Statutes of KGHM Polska Miedź S.A. do not provide in this respect for any regulations regarding
the required majority, other than those resulting from the provisions of the Commercial Partnerships and Companies Code
- with the exception of changing the Company's scope of activity. In this case, the change may take place without the
obligation to repurchase shares if a resolution of the General Meeting is adopted by a 3/4 majority of the votes cast in the
presence of persons representing at least half of the share capital.
3.5.3 Shareholders and their rights
Shareholders of the Company exercise their rights in a manner and within the limits prescribed by prevailing law,
the Statutes of the Company and the Bylaws of the General Meeting of KGHM Polska Miedź S.A.
Shareholders are entitled to exercise their voting rights either personally or through a proxy. The authority to participate
in a General Meeting and to exercise voting rights should be granted in writing or in electronic form. Shareholders shall
inform the Company of the granting of proxy authority in electronic form by filling out and sending to the Company the
form placed on the website of the Company, or other information containing analogous data, no later than 24 hours prior
to the planned date of the General Meeting.
Pursuant to the Company’s Statutes, all of the shares are bearer shares, and their transformation into registered shares is
not allowed. Each share represents one vote. The shares of the Company may be redeemed with the permission of the
shareholder through their purchase by the Company (voluntary redemption). Redemption may not be carried out more
than once per financial year. The resolution of the General Meeting on the redemption of shares should especially describe
the legal basis for redemption, the amount of compensation to be paid to the shareholder for the redeemed shares or the
justification for redeeming shares without compensation, and the way in which the share capital will be decreased. A
resolution on the redemption of shares may be preceded by an agreement with the shareholder whose shares are to be
redeemed. The agreement shall set forth the number of shares to be redeemed and the price for which the shares will be
purchased. The validity of the agreement shall depend on the passage of a resolution by the General Meeting.
Moreover, in a situation where the Supervisory Board conducts qualification proceedings in the case of the existence of
circumstances justifying the appointment of a Member of the Management Board, it shall inform shareholders of the results
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Translation from the original Polish version
of such proceedings and shall provide the minutes of the qualification proceedings. The Supervisory Board is also obliged
to annually present to the Ordinary General Meeting a concise assessment of the standing of the Company, which should
be included in the Company’s annual report, made available to shareholders within such a time period as to allow them to
review the report prior to the Ordinary General Meeting.
Restrictions on ownership rights and on the exercise of voting rights
There are no specific restrictions in the Statutes on the transfer of share ownership and on the exercise of voting rights on
the Company's shares, so that each share carries the right to one vote at the General Meeting.
The Company has not issued securities which would grant special control rights in respect of the Company.
It is important to bear in mind the special powers vested in the State Treasury under laws such as, among others,
− The Act of 16 December 2016 on the principles of state property management,
− The Act of 24 July 2015 on audits of certain investments.
In accordance with the current regulations of the Act on the principles of state property management, as a rule, shares or
rights from shares owned by the State Treasury in KGHM Polska Miedź S.A. are not disposable. The rights of the shares
belonging to the State Treasury are exercised by the Minister of State Assets, while the coordination of the exercise of the
rights owed to the Treasury is the task of the Prime Minister, who seeks to ensure that the rights of the shares are exercised
in a uniform manner.
Shareholders' rights
Independent of the above, the rights of shareholders of KGHM include among others:
− requesting the convening of a General Meeting - in cases described by the Commercial Partnerships and Companies
Code, a General Meeting may be convened by shareholders representing at least half of the share capital or
shareholders authorised by a court of registration to represent at least one-twentieth of the share capital;
− announcing draft resolutions and their justification - Shareholders may utilise electronic contact with the Company
through the Company’s website, in particular to enable the submission of motions to include specific issues in the
agenda of the General Meeting, to announce draft resolutions and their justification. Towards this end it is necessary
to carry out the prior authentication of a shareholders for their identification, in the manner indicated by the Company
on its website. The Company shall also provide on its website the proxy form and the form to facilitate voting through
a proxy;
− the convening of General Meetings - the Polish State Treasury as a shareholder may convene an Ordinary General
Meeting if the Management Board does not do so in the statutory timeframe, as well as an Extraordinary General
Meeting if it considers its convening as warranted;
− requesting that a matter included in the agenda of the General Meeting be removed or not considered - removal of an
issue from the agenda, or not considering an issue placed on the agenda at the request of the shareholders, requires
the adoption of a resolution by the General Meeting, following the earlier-expressed approval of all shareholders
present who had put forward such a proposal, and supported by at least 75% of the votes cast;
− requesting the inclusion of specified matters on the agenda of the next General Meeting - shareholders representing
at least one-twentieth of the share capital may order the inclusion of specified matters on the agenda of the next
General Meeting.
− announcing candidates for Chairperson of the General Meeting – the General Meeting shall carry out an election of the
Chairperson from amongst any number of persons entitled to participate in the General Meeting who are put forward
by shareholders as a candidate for Chairperson;
− participation in dividends – the General Meeting may designate part of the profit for a shareholders' dividend if the
General Meeting of the Company had adopted a decision to designate part of the profit for a shareholders' dividend.
The Management Board of the Company is authorised, with the consent of the Supervisory Board, to adopt resolutions
in the matter of an interim payment to shareholders on the anticipated dividend at the end of the financial year, if the
Company is in the possession of sufficient funds for said payment. The rights date for dividends and the date for
payment of dividends shall be set by the General Meeting and announced by the Management Board of the Company.
Payment of dividends should commence within two months of the date the resolution on appropriation of profits is
adopted. The payment of an interim dividend requires the approval of the Supervisory Board. The Company may make
an interim payment on the anticipated dividend, if its approved financial statements for the prior financial year show a
profit. The interim dividend may represent at most half of the profit earned since the end of the prior financial year, as
shown in the financial statements audited by a certified auditor, and increased by the reserve capital created from
profit, which, for the purpose of payment of the interim dividend, may be used by the Management Board, and
decreased by uncovered losses and treasury shares;
− upon the motion of a shareholder representing at least one-fifth of the share capital, group elections for the Supervisory
Board shall be carried out at the nearest General Meeting. A motion to hold group elections for members of the
Supervisory Board should be submitted to the Management Board of the Company, in sufficient time to include it in
the agenda of the General Meeting;
− at the request of a shareholder representing at least one-twentieth of the share capital, the General Meeting may carry
out elections for a three-person Voting Committee, from among those candidates put forward by the participants of
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Translation from the original Polish version
the General Meeting. Should a Voting Committee be elected, its responsibilities shall include supervision to ensure that
all voting is properly carried out, supervision of the electronic voting system, and checking and transmitting to the
Chairperson of the General Meeting the results of voting. The Voting Committee shall have the right to review the results
of voting which was held prior to the election of the Voting Committee;
− at the request of a shareholder, the Management Board shall be required to provide the shareholder with a copy of the
Bylaws of the General Meeting.
Ownership structure
In 2024, no changes in the ownership of significant blocks of shares in KGHM Polska Miedź S.A. took place.
The shareholder structure of the Company as at 1 January 2024 and as at 31 December 2024 (as at the reporting date) and
as at the date of signing this report, established on the basis of notifications received by the Company pursuant to Article
69 of the Act on public offerings and conditions governing the introduction of financial instruments to organised trading,
and on public companies, was as follows:
Table 84. Shareholder structure of the Company as at 1 January 2024 and 31 December 2024 and as at the date of this
report
shareholder
number of shares/
number of votes
total nominal value of
shares (PLN)
interest in the share
capital/total number of
votes
State Treasury
44
63 589 900
635 899 000
31.79%
Allianz Polska Otwarty Fundusz Emerytalny
45
11 961 453
119 614 530
5.98%
Nationale-Nederlanden Otwarty Fundusz Emerytalny
46
10 104 354
101 043 540
5.05%
Other shareholders
114 344 293
1 143 442 930
57.18%
Total
200 000 000
2 000 000 000
100.00%
Detailed information on the ownership structure may be found in subsection 1.6.1 Shareholders and the capital market.
3.5.4 Description of the application of DPSN 2021
In view of the foregoing, the provisions of Section 5 of this Corporate Governance Statement, entitled "General Meeting and
relations with shareholders" and in connection with the published Information on the status of application by the Company
of the principles contained in Section IV of the DPSN, KGHM Polska Miedź S.A. applies the following principles:
Table 85. The principles of Section IV of DPSN 2021 - General meeting, shareholder relations applied in KGHM Polska
Miedź S.A.
4.2. The Company sets the place and date and the form of a general meeting so as to enable the participation of the highest
possible number of shareholders. For that purpose, the Company strives to ensure that the cancellation of a general
meeting, change of its date or break in its proceedings take place only if justified and does not prevent or limit the exercising
of the shareholders’ rights to participate in the general meeting.
The principle is applied.
4.3. The Company provides a public real-life broadcast of the general meeting.
The principle is applied.
In addition, recordings of previous general meetings are available at Video | Press Office of KGHM Polska Miedź
4.4. The presence of representatives of the media is allowed at general meetings.
The principle is applied.
4.5. If the management board becomes aware of a general meeting being convened pursuant to Article 399 § 2-4 of the
Commercial Partnerships and Companies Code, the management board immediately takes steps which it is required to take
in order to organise and conduct the general meeting. The foregoing applies also where a general meeting is convened
under authority granted by the registration court according to Article 400 § 3 of the Commercial Partnerships and Companies
Code.
The principle is applied.
4.6. To help shareholders participating in a general meeting to vote on resolutions with adequate understanding, draft
resolutions of the general meeting concerning matters and decisions other than points of order should contain a
justification, unless it follows from documentation tabled to the general meeting. If a matter is put on the agenda of the
44
based on a notification received by the Company dated 12 January 2010
45
based on a notification received by the Company dated 16 May 2023
46
based on a notification received by the Company dated 18 August 2016
KGHM Polska Miedź S.A. 137
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Translation from the original Polish version
general meeting at the request of a shareholder or shareholders, the management board requests presentation of the
justification of the proposed resolution, unless previously presented by such shareholder or shareholders.
The principle is applied.
4.7. The supervisory board issues opinions on draft resolutions put by the management board on the agenda of the general
meeting.
The principle is applied.
4.9.2. Candidates for members of the supervisory board make a declaration concerning fulfilment of the requirements for
members of the audit committee referred to in the Act of 11 May 2017 on Auditors, Audit Firms and Public Supervision and
having actual and material relations with any shareholder who holds at least 5% of the total vote in the company.
The principle is applied.
4.10. Any exercise of the rights of shareholders or the way in which they exercise their rights must not hinder the proper
functioning of the governing bodies of the company.
The principle is applied.
4.11. Members of the management board and members of the supervisory board participate in a general meeting, at the
location of the meeting or via means of bilateral real-time electronic communication, as necessary to speak on matters
discussed by the general meeting and answer questions asked at the general meeting. The management board presents to
participants of an annual general meeting the financial results of the company and other relevant information, including
non-financial information, contained in the financial statements to be approved by the general meeting. The management
board presents key events of the last financial year, compares presented data with previous years, and presents the degree
of implementation of the plans for the previous year
The principle is applied.
4.12. Resolutions of the general meeting concerning an issue of shares with subscription rights should specify the issue price
or the mechanism of setting the price, or authorise the competent body to set the price prior to the subscription right record
date within a timeframe necessary for investors to make decisions.
The principle is applied.
4.13. Resolutions concerning a new issue of shares with the exclusion of subscription rights which grant pre-emptive rights
for newly-issued shares to selected shareholders or other entities may be passed, subject at least to the following three
criteria:
a) the company has a rational, economically justified need to urgently raise capital or the share issue is related to rational,
economically justified transactions, among others such as a merger with or the take-over of another company, or the shares
are to be taken up under an incentive scheme established by the company;
b) the persons granted the pre-emptive right are to be selected according to objective general criteria;
c) the purchase price of the shares is in a rational relation with the current share price of the company or is to be determined
in book-building on the market.
The principle is applied.
4.14. The Company should strive to distribute their profits by paying out dividends. The Company may retain all their
earnings subject to any of the following criteria:
a) the earnings are minimal and consequently the dividend would be immaterial in relation to the value of the shares;
b) the company reports uncovered losses from previous years and the earnings are used to reduce such losses;
c) the company can demonstrate that investment of the earnings will generate tangible benefits for the shareholders;
d) the company generates insufficient cash flows to pay out dividends;
e) a dividend payment would substantially increase the risk to covenants under the company’s binding credit facilities or
terms of bond issue;
f) retention of the company’s earnings follows recommendations of the authority which supervises the company by virtue of
its business activity.
The principle is applied.
3.5.5 Explanations on the waiver of the application of DPSN 2021
In accordance with the published Statement on the Company's compliance with the principles in section IV of DPSN 2021,
the following principles do not apply:
KGHM Polska Miedź S.A. 138
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Translation from the original Polish version
Table 86. Principles in section IV of DPSN 2021 not applied in KGHM Polska Miedź S.A.
4.1 A company should enable their shareholders to participate in a general meeting by means of electronic communication
(e-meeting) if justified by the expectations of shareholders notified to the company, provided that the company is in a
position to provide the technical infrastructure necessary for such general meeting to proceed.
The principle is not applied.
The company has not yet received a request from shareholders concerning a possibility to hold an e-General Meeting. The Company’s
Statutes do not restrict the participation of shareholders in general meetings in terms of the use of electronic means of communication,
and the Company is able to ensure the requisite technical infrastructure to conduct such general meetings. Failure to apply the
aforementioned principle does not affect the reliability of the Company's information policy, nor does it create a risk of limiting or
impeding Shareholders' participation in general meetings. Since 2016 KGHM Polska Miedź S.A. has been providing real-time streaming
webcasts of its General Meetings.
4.8. Draft resolutions of the general meeting on matters put on the agenda of the general meeting should be announced by
shareholders no later than three days before the general meeting.
The principle is not applied.
The Company applies the Commercial Partnerships and Companies Code in this regard. In the Company’s opinion, this principle restricts
the rights of shareholders to propose items for the agenda during general meetings.
4.9.1 If the general meeting is to appoint members of the supervisory board or members of the supervisory board for a new
term of office: candidates for members of the supervisory board should be nominated with a notice necessary for
shareholders present at the general meeting to make an informed decision and in any case no later than three days before
the general meeting; the names of candidates and all related documents should be immediately published on the company’s
website.
The principle is not applied.
Years of practical experience by the Company have shown that proposals of a shareholder (pursuant to the shareholder’s rights arising
from the Commercial Partnerships and Companies Code) of candidates to the Supervisory Board usually occur during the course of a
General Meeting, i.e. in breach of principle 4.9.1. In the Company’s opinion, despite the fact that such announcements are made during
the course of the General Meeting, candidates are assessed with due consideration, based on complete materials regarding the given
candidate.
3.6 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES
KGHM Polska Miedź S.A., under the principles indicated in section 5 of DPSN 2021, strives to maintain best
standards of due diligence in the management of conflicts of interest and in concluding transactions with related
entities under conditions of the potential arising of conflicts of interest.
3.6.1 Description of the application of DPSN 2021
The Company applies a model of verifying data on significant transactions entered into between KGHM Polska Miedź S.A.
and subsidiaries of the KGHM Polska Miedź S.A. Group with entities related with KGHM Polska Miedź S.A.
The Supervisory Board shall prepare an opinion on whether a transaction with a related entity is justified, if the signing of
the said transaction requires the consent of the General Meeting. In such a case the Supervisory Board evaluates the need
for the prior opinion of an external entity, the task of which would be the valuation of the transaction and an analysis of its
economic affects.
With respect to management and supervisory staff, a Member of the Supervisory Board or of the Management Board
should immediately, but no later than at the next meeting of the Supervisory Board or of the Management Board, inform
the other Members of the Supervisory Board/Management Board of an existing conflict of interest with the Company or
the possibility of its arising, and should refrain from participating in matters which, in respect of his/her person, there may
arise a conflict of interest, including taking part in discussions and in voting on the adoption of resolutions in this regard.
The KGHM Group has a Procedure in place for dealing with corrupt activities. The aim of the procedure is to ensure the
compliance of activities and processes performed by persons working for or on behalf of Organisational Units of the KGHM
Group with the adopted Anticorruption Policy. The procedure applies to all Organisational Units of the KGHM Group. The
provisions of the Procedure apply to all Employees of the Organisational Units of the KGHM Group, irrespective of their
position and function, as well as their Representatives, respectively. The procedure regulates, among others, the handling
of actual, potential and perceived conflicts of interest and also covers members of management, control or executive
bodies. In the event of the occurrence of a conflict of interest or the possibility of its occurrence, the employee is obliged to
immediately complete a Declaration of Conflict of Interest/Potential Conflict of Interest, and to submit it to, among others,
the Ethics and Anti-Corruption Officer responsible for the respective Organisational Unit of KGHM. The statements are
subject to the review process to confirm or exclude the existence of a conflict of interest and, if applicable, to identify and
assess the level of risk and implement appropriate mitigating actions.
KGHM Polska Miedź S.A. 139
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Translation from the original Polish version
In 2024, neither the Parent Entity nor its subsidiaries entered into related party transactions under other than arm’s length
conditions.
In accordance with the published Statement on the Company's compliance with the principles in section 5 of DPSN
2021, the Company applies all principles regarding conflicts of interest and transactions with related entities.
Table 87. The principles of Section V of DPSN 2021 - Conflict of interests and related party transactions applied in KGHM
Polska Miedź S.A.
5.1. Members of the management board and members of the supervisory board notify the management board or the
supervisory board, respectively, of any conflict of interest which has arisen or may arise, and refrain from discussions on the
issue which may give rise to such a conflict of interest in their case.
The principle is applied.
The Company has introduced appropriate provisions in the Bylaws of the Management Board of KGHM Polska Miedź S.A. and the Bylaws
of the Supervisory Board of KGHM Polska Miedź S.A. in this regard.
5.2. Where a member of the management board or a member of the supervisory board concludes that a decision of the
management board or the supervisory board, respectively, is in conflict with the interest of the company, he or she should
request that the minutes of the management board or supervisory board meeting show his or her dissenting opinion.
The principle is applied.
The Company has introduced appropriate provisions in the Bylaws of the Management Board of KGHM Polska Miedź S.A. and the Bylaws
of the Supervisory Board of KGHM Polska Miedź S.A. in this regard.
5.3. No shareholder should have preference over other shareholders in related party transactions. The foregoing also
concerns transactions concluded by the company’s shareholders with members of the company’s group.
The principle is applied.
5.4. Companies may buy back their own shares only in a procedure which respects the rights of all shareholders.
The principle is applied.
The application of the principle is of a declarative nature, as the Company has never carried out share buyback operations.
5.5. If a transaction concluded by a company with its related party requires the consent of the supervisory board, before
giving its consent the supervisory board assesses whether to ask a prior opinion of a third party which can provide valuation
of the transaction and review its economic impact.
The principle is applied.
In accordance with the Bylaws of the Supervisory Board of KGHM Polska Miedź S.A., the Supervisory Board draws up an opinion on the
legitimacy of a related party transaction, and may commission individuals or experts from outside the Company (advisor to the
Supervisory Board) to prepare the opinion.
5.6. If a related party transaction requires the consent of the general meeting, the supervisory board issues an opinion on
the rationale of such transaction. In that case, the supervisory board assesses whether to ask a prior opinion of a third party
referred to in principle 5.5.
The principle is applied.
In accordance with the Bylaws of the Supervisory Board of KGHM Polska Miedź S.A., the Supervisory Board shall prepare an opinion on
whether a transaction with a related entity is justified, if the conclusion of the said transaction requires the consent of the General
Meeting. In such a case the Supervisory Board evaluates the need for the prior opinion of an external entity, the task of which would be
the valuation of the transaction and an analysis of its economic effects.
5.7. If a decision concerning the company’s significant transaction with a related party is made by the general meeting, the
company should give all shareholders access to information necessary to assess the impact of the transaction on the interest
of the company before the decision is made, including an opinion of the supervisory board referred to in principle 5.6.
The principle is applied.
In 2024, the Company did not enter into any material transactions with a related party for which the approval of the General Meeting
was required.
3.7 REMUNERATION
KGHM Polska Miedź S.A., under the principles indicated in section 6 of DPSN 2021, strives for stability in its
management staff, among others by the transparent, fair, consistent and non-discriminatory principles for its
remuneration, manifested among others in wage equality between women and men.
3.7.1 Description of the application of DPSN 2021
The procedure for the remuneration of Members of the Supervisory Board and Management Board of KGHM Polska Miedź
S.A. is defined in the "Remuneration Policy for Members of the Management Board and Supervisory Board of KGHM Polska
Miedź S.A." (the Remuneration Policy) adopted in 2020. The last amendment took place on 5 July 2024 pursuant to
KGHM Polska Miedź S.A. 140
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Resolution No. 31/2024 of the Ordinary General Meeting of KGHM Polska Miedź S.A., and included mainly changes with
respect to the inclusion of ESG sustainability factors in the objectives of the Remuneration Policy itself, but also in the
management objectives and criteria for their fulfilment, while maintaining the principles of transparency, fairness,
consistency and non-discrimination. When setting the remuneration of the Members of the Supervisory Board and the
Management Board, the Remuneration Policy is aimed at the implementation of the business strategy of KGHM, as well as
the long-term interests and stability of the Company. Moreover, the Company does not foresee the possibility of
temporarily refraining from the application of the Remuneration Policy.
To determine the level of remuneration matched to the tasks and duties of the Management Board and to maintain a high
level of motivation, total remuneration of Members of the Management Board consists of a fixed part and a variable part.
The fixed remuneration is the basic monthly remuneration, which is supplemented by variable remuneration, whose
amount may not exceed 100% of the annual fixed remuneration for the prior financial year. The management goals set for
each financial year and the criteria (KPIs) for meeting these goals with respect to financial and non-financial results,
representing the basis for setting variable remuneration, are set forth by the Supervisory Board for individual Members of
the Management Board in a way which is consistent with the short- and long-term strategic goals of KGHM Polska Miedź
S.A. and the KGHM Polska Miedź S.A. Group.
The criteria adopted in the Remuneration Policy should have a positive impact on the commitment to serving in the
Company, provide motivation to achieve the business strategy and interests of the Company and affect the objective
assessment of risks, opportunities and impacts of the Company related to ESG.
In connection with the remuneration policy for the management, supervisory staff and key managers, KGHM Polska Miedź
S.A. applies the following principles of DPSN 2021:
Table 88. The principles of Section VI of DPSN 2021 - Remuneration, applied in KGHM Polska Miedź S.A.
6.1. The remuneration of members of the management board and members of the supervisory board and key managers
should be sufficient to attract, retain and motivate persons with skills necessary for proper management and supervision of
the company. The level of remuneration should be adequate to the tasks and responsibilities delegated to individuals and
their resulting accountability.
The principle is applied.
6.2. Incentive schemes should be constructed in a way necessary among others to tie the level of remuneration of members
of the company’s management board and key managers to the actual long-term standing of the company measured by its
financial and non-financial results as well as long-term shareholder value creation, sustainable development and the
company’s stability.
The principle is applied.
The variable remuneration of members of the Management Board depends on financial and non-financial results, including the ratio.
When shaping the variable remuneration, the Company takes into account non-financial factors that relate to, among other things, the
fulfilment of tasks and initiatives included in the Company's Strategy, the improvement of occupational health and safety, the reduction
of adverse environmental impacts, including the achievement of climate goals and the achievement of other ESG objectives and impacts.
The accepted and applied remuneration system for key managers of KGHM Polska Miedź S.A. includes, among others, the annual bonus
system based on the assessment of the degree of achievement of KPIs, the basis of which are the key performance indicators of the
Management Board and the objectives arising from the long-term strategy of the Company.
6.3. If the company’s incentive schemes include a stock option program for managers, the implementation of the stock
option program should depend on the beneficiaries’ achievement, over a period of at least three years, of pre-defined,
realistic financial and non-financial targets and sustainable development goals adequate to the company, and the share
price or option exercise price for the beneficiaries cannot differ from the value of the shares at the time when such program
was approved.
The principle is applied.
Currently, the Company does not have such a program in place, but nevertheless declares its compliance should such a program be
enacted.
6.5. The level of remuneration of supervisory board members should not depend on the company’s short-term results.
The principle is applied.
In accordance with the adopted principles, remuneration of Members of the Supervisory Board is fixed and does not foresee the
payment of variable remuneration, bonuses or other cash benefits due to serving on the Supervisory Board of KGHM Polska Miedź S.A.
It is likewise not dependent on the number of meetings held.
Additional information concerning the remuneration of the Parent Entity's governing bodies and of other key
managers of the Group
Information on remuneration of Members of the Management Board of KGHM Polska Miedź S.A.
Detailed principles for setting the terms of remuneration of the Management Board Members were established by the
Supervisory Board in accordance with the "Remuneration policy of Management Board and Supervisory Board Members
of KGHM Polska Miedź S.A.” in the templates for the management services contracts for the Company’s Management Board
KGHM Polska Miedź S.A. 141
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
(set forth in the form of resolutions, separately for the President of the Management Board and for the Vice Presidents of
the Management Board).
The management services contracts were signed for the time Members of the Management Board serve in the Management
Board, within one term. This means that the termination of a contract will occur on the final day on which the function is
served, with no notice period and without the need to take additional actions.
Total remuneration received on their basis consists of a fixed part in the form of basic monthly remuneration, as well as
variable remuneration representing supplementary remuneration for the Company’s financial year.
The fixed monthly remuneration for individual members of the Company’s Management Board was determined by the
Supervisory Board (in the form of a resolution) and amounts to fourteen to fifteen times the average monthly salary in the
corporate sector, excluding payments from profit in the fourth quarter of the previous year, announced by the President
of the Central Statistical Office of Poland.
The variable remuneration depends on the level of achievement of the management goals set by the Supervisory Board
for a given financial year and may not exceed 100% of the annual fixed remuneration. In the case of a member of the
Management Board exercising the subject matter of the agreement for a period of less than one full reporting year, with
the provision that the contract was performed for a period of at least three months, the variable remuneration is calculated
proportionally.
Based on the Statutes of KGHM Polska Miedź S.A., the Bylaws of the Supervisory Board, the management services contracts,
the provisions of the Remuneration policy of Management Board and Supervisory Board Members of KGHM Polska Miedź
S.A. and the Act on the terms of setting the remuneration of individuals managing certain companies, the Supervisory Board
set management goals for the Management Board of KGHM Polska Miedź S.A. for 2024.
Management goals whose execution is a contingent condition to receive variable remuneration for the financial year of the
Company:
− forming and applying remuneration principles for members of management and supervisory bodies in line with the
provisions of the Act of 9 June 2016 on the principles of shaping the remuneration of persons managing certain
companies in all Group companies;
− implementation of the obligations referred to in Articles 17-20, Article 22 and Article 23 of the Act of 16 December 2016
on the principles of state assets management.
The Supervisory Board also established additional management goals for individual members of the Management Board
according to their competence, split into common and individual objectives.
Information on the way of applying the performance criteria for the variable remuneration of members of the Management
Board (including the assessment of management objectives for 2023 and the management objectives determining a
possibility to receive a variable part of remuneration for 2024) is presented in the Report on remuneration of the
Management Board and Supervisory Board of KGHM Polska Miedź S.A. for 2024.
Payment of variable remuneration is made following the submission by individual members of the Management Board of
reports on the achievement of the management goals. Payment of the variable part depends on the achievement by a
member of the Management Board of the aforementioned goals, approval of the Management Board’s report on the
activities of the Company and the Company’s financial statements for the prior financial year, and on the General Meeting
approving the fulfilment of duties by a given member of the Management Board. On this basis, the Supervisory Board
evaluates the execution of the management goals and sets the amount of the variable remuneration due by adopting
appropriate resolutions.
Table 89. Potentially due remuneration of Members of the Management Board of KGHM Polska Miedź S.A. for 2024
Name and surname
Position
Potentially due variable remuneration for
2024 under the agreement on the
provision of management services (in PLN
thousand)
Andrzej Szydło
Member of the Management Board - President of the Management Board
1,149.6
Piotr Stryczek
Member of the Management Board - Vice President of the Management Board
1,149.6
Piotr Krzyżewski
Member of the Management Board - Vice President of the Management Board
1,111.3
Zbigniew Bryja
Member of the Management Board - Vice President of the Management Board
1,073.0
Mirosław Laskowski
Member of the Management Board - Vice President of the Management Board
1,111.3
Iga Lis
Member of the Management Board - Vice President of the Management Board
435.0
Mirosław Kidoń
Member of the Management Board - Vice President of the Management Board
38.6
Total
6,068.4
A Member of the Management Board may join the Employee Pension Scheme under the terms of the Company Agreement
in force in this regard, provided that the amount of the monthly basic contribution in this Scheme is included in the amount
of the fixed remuneration due for this period.
Covering the Member of the Management Board - at the Company's expense - by a life insurance agreement under the
group life insurance policies already in place at the Company is permitted, including in the event of death, accident or
KGHM Polska Miedź S.A. 142
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
illness. The coverage corresponds to that provided to the management staff, with the only difference being that if the
Member of the Management Board chooses a pension fund-linked life insurance, the portion of the premium relating to
this option will not be funded by the Company.
Management services contracts also regulate matters concerning the application (use) of any resources (means) of the
Company required to perform contractual obligations and to maintain security requirements as to the collection and
transmission of data, including in particular:
− office space together with the equipment and technical facilities, including a portable personal computer with wireless
Internet access and other necessary equipment, means of communication including a mobile phone;
− local housing appropriate to the Function served (in respect of which the Company covers the cost of such housing to
the net amount of PLN 5 000);
− a company car;
− participation in conferences, seminars or meetings of a business nature related to the Company's scope of operations
and, insofar as necessary for the performance of such obligations, travel in the country and abroad;
− incurring or refinancing costs of individual training for the Management Board Member related to the Contract in
question and the contractual obligations, in each case with the prior consent of the Chairperson of the Supervisory
Board of the Company.
− incurring the costs of civil liability insurance for the Member of the Management Board related to serving in the function;
− other benefits, in particular such as those ensured by the Company to the Company’s management staff in appropriate
internal regulations or resolutions of Company bodies – under the condition that the principles for the granting of such
benefits to the Management Board Member, or the utilisation of such, are set forth by the Supervisory Board in
resolutions.
The Contracts also provide that if the Management Board Member serves as a member of a body in a subsidiary of the
Company within the Group, the Management Board Member will not receive additional remuneration for this function. In
addition, the Management Board Member is obliged to inform the Supervisory Board of the possession of shares in publicly-
listed companies and to gain its consent for accepting a position or serving in a function in the body of another commercial
law company – excluding companies of the Group or the acquisition or possession of shares in another commercial law
company, as well as performing work or services on behalf of other entities based on an employment contract, mandate
contract or based on any other legal relationship.
The contracts signed with the Members of the Management Board regulate the question of compensation in the case of
termination, with or without notice, of the management services contract for reasons other than breach of the contract’s
basic obligations. It stipulates that the Company will provide severance pay of no higher than three times the amount of
the monthly fixed remuneration (if the contract was in force for at least 12 months).
The contracts with the Members of the Management Board – both during the period of employment as well as following
the period of employment – deal with the question of forbidding competition. In particular, they establish that for a period
of six months from the date when employment in the function ceases, the Management Board Member is not allowed to
engage in any competing activities. For adherence to the clause on forbidding competitive activities, KGHM pays the
Management Board Member compensation throughout the period during which competitive activities are banned in the
amount of 50% (and in the case of the President of the Management Board 100%) of the monthly fixed remuneration. The
payment of compensation is conditional on the Management Board Member’s having served in the function for at least six
months and having provided the Company with the relevant written declaration. A Member of the Management Board who
breaches the provisions of the aforementioned contract will be required to pay a contractual penalty equal to the total
compensation received. Payment of the contractual penalty shall not exclude the Company's right to claim damages in
excess of the amount of the penalty on general terms.
Information on the remuneration of Members of the Supervisory Board of KGHM Polska Miedź S.A.
The remuneration of members of the supervisory body was set on 7 June 2019 by the General Meeting based on the Act
dated 9 June 2016 on the terms of setting the remuneration of individuals managing certain companies. According to the
"Remuneration policy of Management Board and Supervisory Board Members of KGHM Polska Miedź S.A.” the amount of
monthly remuneration of individual members of the Supervisory Board depends on the function served and is set as 2.2x
or twice the average monthly remuneration in the corporate sector excluding payments from profit in the fourth quarter
of the previous year, announced by the President of Statistics Poland. Members of the Supervisory Board are not
remunerated for any month in which they did not attend any of the formally convened meetings for unjustified reasons,
which are assessed and qualified by the Supervisory Board.
Apart from the above-mentioned remuneration, Members of the Supervisory Board are not entitled to receive any
additional remuneration components, including bonuses or other cash benefits.
According to the Commercial Partnerships and Companies Code, the Company also covers or reimburses costs related to
participation in the work of the Supervisory Board.
Detailed information on the amount of remuneration and other benefits for Supervisory Board and Management Board
members can be found in note 12.10 of the separate and consolidated financial statements and in the "Report on the
remuneration of members of the Management Board and Supervisory Board KGHM Polska Miedź S.A. for 2024”.
KGHM Polska Miedź S.A. 143
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
General information on the adopted and applied remuneration system for key managers of KGHM Polska Miedź
S.A.
The principles of the remuneration of key managers of KGHM Polska Miedź S.A. – the Executive Directors of the Head Office
and the Executive Directors of the Company’s divisions – is set by the Company’s Management Board.
The employment contracts concluded with the above-mentioned directors provide that they are entitled to the following
components of remuneration and benefits:
− the basic monthly remuneration, which amounts – depending on the function served – from 7- to 12-times the average
monthly remuneration in the corporate sector, excluding payments from profit, in the fourth quarter of the previous
year, announced by the President of Statistics Poland.
− an annual bonus up to 40% of the annual fixed part of remuneration, paid in accordance with the principles for bonuses
based on:
− part A – evaluation of the degree of achievement of business KPIs and individual goals (up to 30%) - the system is based
on collective and individual KPIs, the basis of which are the key performance indicators of the Management Board and
goals resulting from the Company's strategy;
− part B - evaluation of the work of a given director (up to 10%) reflecting among others their attitude, initiative,
engagement, innovation and creativity;
− additional benefits, such as life insurance, the Employee Pension Program, a Health Care Package,
− a company car,
− severance pay of three times the amount of the basic monthly remuneration, in the case of termination of the contract
by the Employer prior to the lapse of the contractual period
− (if the work was performed for a period of at least three months).
3.7.2 Explanations on the waiver of the application of DPSN 2021
In accordance with the published Statement on the Company's compliance with the principles in section VI of DPSN 2021,
the following principle is partially applied:
Table 90. Principles in section VI of DPSN 2021 applied partially or not applied in KGHM Polska Miedź S.A.
6.4. The supervisory board performs its responsibilities on a continuous basis, the remuneration of supervisory board
members cannot depend on the number of meetings held. The remuneration of members of committees, in particular the
audit committee, should take into account additional workload on the committee.
The Company partially applies the principle.
The members of the Supervisory Board are remunerated regardless of the number of meetings officially convened and held in a given
calendar month and takes into account the additional workload in the individual committees of the Supervisory Board. The Members
of the Supervisory Board do not however receive remuneration if, for unjustified reasons, they do not take part in any of the meetings
of the Supervisory Board officially convened and held in a given month. In accordance with the Remuneration Policy for Members of
the Management Board and Supervisory Board of KGHM Polska Miedź S.A., adopted by a resolution of the General Meeting of KGHM
Polska Miedź S.A., apart from basic remuneration, "the Supervisory Board does not receive additional remuneration components,
including bonuses or other cash benefits". As a result of the actions of shareholders, art. 10 section 2 of the Act on the principles for
setting remuneration for persons who manage certain companies has not been implemented in the internal regulations of the
Company, and the members of the existing committees of the Supervisory Board of KGHM Polska Miedź S.A. will not receive additional
remuneration for performing these functions.
144
4 SUSTAINABILITY REPORTING OF THE KGHM POLSKA MIEDŹ S.A. GROUP
4.1 GENERAL INFORMATION
4.1.1 [ESRS 2] General disclosures
[BP-1] General basis for the preparation of the sustainability statements
The formal basis for the preparation of this statement is the Accounting Act of 29 September 1994 (Journal of Laws of 2023,
item 120 as amended) which implements the requirements of Directive (EU) 2022/2464 of the European Parliament and of
the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and
Directive 2013/34/EU, as regards corporate sustainability reporting. (OJ L of 2022. No. 322, p. 15) (Corporate Sustainability
Reporting Directive - CSRD). This directive has been implemented into the national legal system through the provisions of
the Act of 6 December 2024 amending the Accounting Act, the Act on statutory auditors, audit firms and public supervision
and certain other acts (Journal of Laws of 2024, item 1863).
This statement has been prepared in accordance with the European Sustainability Reporting Standards (ESRS), set out in
Annex I - “European Sustainability Reporting Standards (ESRS)” of Commission Delegated Regulation (EU) 2023/2772 of 31
July 2023 supplementing Directive 2013/34/EU of the European Parliament and of the Council as regards sustainability
reporting standards (OJ L of 2023, item 2772, as amended), as corrected by Corrigendum to Commission Delegated
Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU of the European Parliament and of the
Council as regards sustainability reporting standards (Official Journal of the European Union L, 2023/2772, 22 December
2023) (OJ L of 2024, item 90431).
The statement also includes taxonomy disclosures compliant with Regulation (EU) 2020/852 of the European Parliament
and of the Council of 18 June 2020 on establishing a framework to facilitate sustainable investment, amending Regulation
(EU) 2019/2088 (OJ L of 2020, No. 198, p. 13 as amended)
In addition, the statement includes information on climate change issues pursuant to TCFD (Task Force on Climate-Related
Financial Disclosures) guidelines.
This statement has been prepared in consolidated form for the KGHM Group. The scope of consolidation is equivalent to
the financial statements. The structure of the KGHM Polska Miedź S.A. Group and the structure of the KGHM
INTERNATIONAL LTD. Group as at 31 December 2024, including domestic and foreign companies that have been
consolidated under sustainability reporting, are presented in Diagram 44. and Diagram 45.
To provide for the completeness and compliance with the requirements of the ESRS standards, the estimation method
based on a reference company has been applied in this Statement. This method was used for subsidiaries of the KGHM
Group which have an insignificant impact on environmental, social and governance aspects. The acquisition of full data for
these entities would be unjustified both from a cost perspective and in terms of the materiality principle. At the same time,
as these companies are financially consolidated, they have also been included in the non-financial section to ensure the
consistency between the two reports.
The statement takes into account key information concerning the KGHM Group’s value chain comprising own operations
excluding joint ventures in which the Group does not have operational control), key information from the value chain,
including both upstream and downstream segments (in the scope of direct suppliers and recipients), key products and
significant business relationships. In particular, the following areas of operations were included: exploration, mining,
smelting and refining, activities supporting mining and smelting processes, electricity generation and other services which
are not directly related to the main activities of the KGHM Group. For more information on the value chain, see subsection
[SBM-1] Strategy, business model and value chain.
The KGHM Group did not exercise the option to omit specific information regarding intellectual property, know-how or
innovation results, which were fully disclosed in accordance with the ESRS requirements.
The KGHM Polska Miedź S.A. Group has not used the exemption from the obligation to disclose information on expected
events or matters under negotiation in accordance with Article 63x sec. 7 of the Accounting Act of 29 September 1994
(Journal of Laws of 2023, item 120, as amended).
145
Diagram 44. Structure of the KGHM Polska Miedź S.A. Group as at 31 December 2024
47
47
Percentages represent the total share of the Group.
1/ wspólne przedsięwzięcie wyceniane metodą praw własności
2/ jednostka zależna niepodlegająca konsolidacji
Spółki zależne konsolidowane metodą wskaźnikową
100%
Grupa Kapitałowa
KGHM INTERNATIONAL
KGHM Kupfer AG
100%
85%
Uzdrowisko Cieplice
Sp. z o.o. - Grupa PGU
KGHM Metraco S.A.
100%
100%
99%
100%
KGHM CUPRUM
sp. z o.o. – CBR
100%
100%
POL-MIEDŹ TRANS
Sp. z o.o.
KGHM ZANAM S.A.
100%
NANO CARBON Sp. z o.o.
w upadłości /2
Uzdrowisko Świeradów
-Czerniawa Sp. z o.o.
99%
Uzdrowisko Połczyn
Grupa PGU S.A.
100%
Future 1 Sp. z o.o.
Future 5 Sp. z o.o.
100%
Uzdrowiska Kłodzkie S.A.
- Grupa PGU
100%
100%
MERCUS Logistyka
sp. z o.o.
„Energetyka” sp. z o.o.
49%
99%
CENTROZŁOM
WROCŁAW S.A.
100%
87%
100%
PHU „Lubinpex”
Sp. z o.o.
100%
NITROERG SERWIS
Sp. z o.o.
NITROERG S.A.
87%
100%
100%
Walcownia Metali
Nieżelaznych „ŁABĘDY”
Cuprum Development
sp. z o.o.
100%
Future 3 Sp. z o.o.
100%
100%
Future 4 Sp. z o.o.
100%
100%
Zagłębie Lubin S.A.
100%
„MCZ” S.A.
Polska Grupa Uzdrowisk
Sp. z o.o.
PeBeKa S.A.
100%
BIPROMET S.A.
100%
WPEC w Legnicy S.A.
PMT Linie Kolejowe
Sp. z o.o.
100%
TUW-CUPRUM /1
CBJ sp. z o.o.
100%
INVEST PV7 Sp. z o.o.
INVEST PV40 Sp. z o.o.
INVEST PV58 Sp. z o.o.
INVEST PV59 Sp. z o.o.
100%
100%
KGHM (SHANGHAI) COPPER
TRADING CO., LTD.
KGHM Polska Miedź S.A.
100%
100%
INOVA Spółka z o.o.
100%
OOO ZANAM VOSTOK
Struktura Grupy przedstawiona
na odrębnym schemacie
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
146
Diagram 45. Struktura Grupy Kapitałowej KGHM INTERNATIONAL LTD. na 31 grudnia 2024 r.
48
[BP-2] Disclosure in relation to specific circumstances
Disclosures incorporated by reference
The following information is incorporated by reference into the Consolidated Financial Statements for 2024:
− The financial results of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group by product and geographical
segmentation - Part 2 - Operating segments and information on income, and Part 4 - Explanatory notes to the statement
of profit or loss.
References are presented in individual sections of the Sustainability Report of the KGHM Polska Miedź S.A. Group.
48
Percentages represent the total share of the Group
Spółki zależne konsolidowane metodą wskaźnikową
KGHM INTERNATIONAL LTD.
PROJECT NIKOLAS
COMPANY INC.
100%
DMC Mining Services Ltd.
100%
DMC Mining Services
Corporation
100%
Quadra FNX Holdings
Chile Limitada
FNX Mining Company
USA Inc.
100%
DMC Mining Services
Chile SpA
100%
DMC Mining Services
Mexico, S.A. de C.V.
100%
Quadra FNX Holdings
Partnership
100%
KGHM Chile SpA
100%
55%
Sierra Gorda
S.C.M. /2
Centenario Holdings Ltd.
100%
Minera Carrizalillo SpA
100%
FNX Mining Company Inc.
100%
0899196 B.C. Ltd.
100%
100%
Robinson Holdings (USA) Ltd.
Wendover Bulk
Transhipment Company
100%
100%
KGHM AJAX
MINING INC.
Robinson Nevada Mining
Company
Sugarloaf
Ranches Ltd. /1
80%
80%
3/ rzeczywisty udział Grupy 80%
1/ wspólne przedsięwzięcie wyceniane metodą praw własności
2/ udziały w spółce FRANKE HOLDINGS LTD. posiadają odpowiednio: Centenario Holdings Ltd. 66,2%,
KGHM International Ltd. 30,3% i FNX Mining Company Inc. 3,5%
DMC Mining Services (UK)
Ltd.
100%
DMC Mining Services
Colombia SAS
100%
FRANKE HOLDINGS LTD.
/3
100%
100%
Carlota Copper Company
100%
KGHMI HOLDINGS LTD.
100%
Quadra FNX FFI S.à r.l
100%
Carlota Holdings Company
100%
100%
Aguas de la Sierra
Limitada
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
KMW
147
[GOV-1] The role of the administrative, supervisory and management bodies
Diagram 46. Structure of the entity's administrative, management and supervisory bodies and the distribution of
competence of the Management Board Members, taking into account the areas of sustainability as at 31
December 2024.
148
Table 91. Information regarding the experience of individual members of the Management Board and Supervisory
Board related to the sectors, products and geographical location of the entity
Management Board
Andrzej Szydło
President of the
Management Board
A graduate of the Faculty of Mechanical and Power Engineering at Wrocław University of Science and
Technology, as well as the School for Managers in Industry and Studies in Strategic and Operational
Corporate Management. Completed post-graduate studies in managing corporate value at the SGH
Warsaw School of Economics.
An experienced manager specialising in management and the implementation of innovative solutions, as
well as the realisation of investment and maintenance projects. Among others he has been involved in
implementing ISO-based management and also Integrated Management Systems. Skilled in conducting
negotiations and managing projects using Prince2 and Ten Step methodology. He has enhanced his know-
how during training in the areas of strategy, labour law and HR. He participated in the KGHM Executive
Academy organised by IMD.
Since 2021 he has been a member of the management board of Hyundai Engineering Poland, and
previously a member of the management board of SPS Inscon Sp. z o.o. Since the beginning of his
professional career he has been involved with KGHM Polska Miedź S.A., where he progressed from shift
master at the Głogów Copper Smelter and Refinery, to manager of the heat and power plant, head of the
power unit, technical director and executive director of this division. In the years 2010-2014 he worked in
the Head Office of KGHM Polska Miedź S.A. as a director of the production infrastructure department, a
director of the technology department and a director of the Pyrometallurgy Modernisation Program. He
was also chairman and later secretary of the Supervisory Board of one of the KGHM Polska Miedź S.A.
Group’s companies, Energetyka Sp. z o.o.
Scope of competence of the President of the Management Board from 1 January 2024 to 31 July 2024.
Management of
corporate risk,
compliance and
internal audit and
control
The Company’s
Strategy and
Sustainable
Development
Policy
Security and
preventing losses
The activities of
the Central
Information
Processing Center
Corporate
governance
Activities related to
communications
and corporate
image-building and
relations with the
external business
environment
Human capital
management
Providing legal
services to the
Company’s bodies
with the exception
of the Supervisory
Board
Scope of competence of the President of the Management Board from 1 August 2024 to 31 December 2024.
Management of
corporate risk,
compliance and
internal audit and
control
Security and
preventing losses
Corporate
governance
Organisational
services provided
to the Company’s
bodies;
Activities related to
communications
and corporate
image-building and
relations with the
external business
environment
Human capital
management
The activities of
the Central
Information
Processing Center
Administrative
services for the
Company.
Zbigniew Bryja
Vice President of the
Management Board
(Development)
An experienced manager specialising in the mining sector, especially in the management of companies,
production oversight, and supervision of investment activities as regards mining and metallurgy, as well as
oversight of mine operations.
Working for KGHM since the start of his professional career. In the years 1995-1997 he served in the Rudna
mine of KGHM Polska Miedź S.A. as the Chief Engineer for Orebody Mechanics and Development,
subsequently in the years 1997-2002 as the Director for Development and Production Preparation in this
mine. He held the position of Executive Director of the Polkowice Sieroszowice mine in the years 2002-
2003. From 2003 to 2006 he worked in the Office of the Management Board of KGHM Polska Miedź S.A.
(currently the Head Office) as the Executive Director for Mining, and later as the Executive Director for
Investments and Development. In recent years he was President of the Management Board of the following
companies: PAK KWB Adamów S.A., PAK KWB Konin S.A., PAK Górnictwo sp. z o.o.
He has many years of professional experience in managing corporations, production and in the area of
mining technology. He gained experience in improving production processes and investment projects both
in KGHM and outside of the Group.
He is a graduate of the Mining Faculty of Wrocław University of Science and Technology with a specialty in
deposits mining technology, as well as mine geophysical studies at the AGH University of Science and
Technology in Kraków. He completed a variety of managerial courses in international academic institutions
involving the improvement of investment and financial processes in companies.
He is the author and co-author of numerous articles and publications in areas in which he specialises.
Scope of competence of the Vice President of the Management Board (Development) from 1 January 2024 to 31 July 2024.
R&D policy, innovation and
intellectual property protection
Investment and development
processes
Managing projects and programs
Development of the national
resource base for the mining
industry, development of mining
structures and core business
149
Scope of competence of the Vice President of the Management Board (Development) from 1 August 2024 to 31 December 2024.
Company Strategy
R&D policy,
innovation and
intellectual
property
protection
Investment and
development
processes
Managing projects
and programs
Development of
the national
mining resources
base
Development of
the mining and
production
structure
Real estate
Mirosław Laskowski
Vice President of the
Management Board
(Production)
Since the beginning of his professional career, i.e. since 1987 he has been connected with KGHM Polska
Miedź S.A. In the years 2015-2016 he served as Vice President of the Management Board (Production) of
KGHM Polska Miedź S.A. He was a Director in the following Divisions of the Company: the Rudna mine and
the Polkowice-Sieroszowice mine. An an experienced manager with successes in the management of large
employee teams, responsible for implementing solutions supporting business efficiency and optimising
company costs. Responsible among others for planning the development of the core business and for
seeking and implementing new technologies and methods for managing organisational structures in the
copper company.
He has many years of experience in preparing corporate development plans with a 40-50 year outlook.
Actively participated in the implementation of Lean Management systems based on 5S and TPM. He is a
co-creator of several copper ore deposit mining systems and is the originator and co-creator of KGHM’s
unified safety system based on 3 pillars: education, environment and health. He created in the copper
company solutions involving the prevention of mine-related threats. He was also responsible for leading
numerous rescue operations.
A graduate of the Faculty of Mining, with specialisation in deposit mining technology at Wrocław University
of Science and Technology. Also completed post-graduate studies in financial management and
organisation and management at Wroclaw University of Economics. He gained experience in the
Leadership Academy and the Innovation Academy of the ICAN Institute and in the TenStep Academy in
Warsaw.
Scope of competence of the Vice President of the Management Board (Production) from 1 January 2024 to 31 July 2024.
Planning, current
production and the
development of mine and
metallurgical production
Occupational health and
safety and control over the
environmental risk
Maintaining readiness of the
production and non-
production assets and
achievement of the main
objectives of the Energy
Strategy
Management systems
Integrated supply chain
management
Scope of competence of the Vice President of the Management Board (Production) from 1 August 2024 to 31 December 2024.
Planning, current
production and the
development of mine and
metallurgical production
Occupational health and
safety and control over the
environmental risk
Maintaining readiness of the
production and non-
production assets and
achievement of the main
objectives of the Energy
Strategy
Management systems
Integrated supply chain
management
Piotr Stryczek
Vice President of the
Management Board
(Corporate Affairs)
He holds experience in the conduct of business activities, strategic consultancy and corporate supervision.
Specialises in corporate developmental restructuring and equity investments.
From 2015 he was president of the management board of Automatyka Spółka z o.o., a company involved
in the comprehensive implementation of new, and the maintenance of existing, production line control
systems based on modern solutions by global producers. Involved with KGHM Polska Miedź S.A., where he
worked among others as director of the corporate supervision department. Carried out the processes of
asset and equity restructuring in KGHM and supervised Group companies. In the years 2002-2006 he was
a vice president of a company from the KGHM Group, Pol-Miedź Trans Sp. z o.o. During his professional
career he also held managerial functions in the companies Telefonika S.A. and TELBESKID.
A graduate of the Faculty of Law and Administration at Wrocław University majoring in law and
administration, specialising in management. He is an Attorney-at-law. He has completed a variety of
courses and training in the areas of accounting, strategic communication and equity acquisitions.
He was a member of the supervisory boards and management boards of many limited companies,
including in the Legnica Special Economic Zone, Zagłębie Lubin, KGHM Metale and Krakowska Fabryka
Kabli.
Scope of competence of the Vice President of the Management Board (Corporate Affairs) from 1 January 2024 to 31 July 2024.
Corporate oversight over
subsidiaries in Poland and
abroad
Uniformity of internal
regulations to maintain
consistent operating
principles
Legal services for the
statutory bodies of the
Company with regard to the
Supervisory Board
Supervision of the
functioning of the KGHM
Polska Miedź Foundation as
well as other organisations
serving the public
Coordination of
procurement processes
150
Scope of competence of the Vice President of the Management Board (Corporate Affairs) from 1 August 2024 to 31 December 2024.
Corporate governance
standards
Corporate oversight over
subsidiaries in Poland
Legal services to the
statutory bodies, the
Company and the Divisions
Purchasing processes
Oversight of the operation
of the KGHM Polska Miedź
S.A. Foundation
Piotr Krzyżewski
Vice President of the
Management Board
(Finance)
A manager with many years of experience in both the production and investment sectors. He has
experience in the management of companies, groups and finance in developed groups at a company and
group level, in the evaluation of the profitability of investments, restructuring, optimising processes,
managing financial risk, managing liquidity and developing and executing financing strategies. Manager at
Luma Holding (a family office), responsible for finance of the entire holding company and individual group
companies.
He created a business model, created and managed a second-round fund in Poland. He built and obtained
the first Sustainability Linked-Loan (SLL) in Central and Eastern Europe, and one of the first in the European
mining sector. He gained experience as a manager in the mining and metallurgical sector in Europe and
Africa. He carried out numerous trade finance transactions with partners on various continents.
He is experienced in negotiations, due diligence and the conduct and supervision of acquisitions of
companies in Poland and abroad. A member of Supervisory Boards and Investment Committees –
responsible for the processes of merger, restructuring and optimisation as well as the setting of
development directions.
He is a graduate of the SGH Warsaw School of Economics with a major in finance and banking as well as
international economic relations. Completed doctoral studies in economics. Holds a broker license and
completed numerous courses and training.
Scope of competence of the Vice President of the Management Board (Finance) from 1 January 2024 to 31 July 2024.
Financial and taxation policy
Accounting services
Disclosure and publishing
obligations
Investor relations
Activities related to
development projects in the
power generation area.
Scope of competence of the Vice President of the Management Board (Finance) from 1 August 2024 to 31 December 2024.
Financial and
taxation policy
Financial
verification of
the Strategy
projects
Finances in all
of the Group’s
operations and
activities
Accounting
services
Disclosure and
publishing
obligations
Investor
relations
Development
projects in the
field of energy
transition
Commercial and
logistics policies
ESG
Iga Dorota Lis
Vice President of the
Management Board
(International Assets)
Graduate of the Faculty of Law and Administration at University of Warsaw, lecturer at Lazarski University
at postgraduate studies in the fields of new technologies and environmental protection law. She passed
the bar exam at the District Bar Council in Warsaw.
Experienced manager associated with the industrial sector, with multiannual experience in management
and consultancy in the area of investments, including energy, petrochemical, chemical and metallurgical
industry. In the past, she acted as an advisor to KGHM Polska Miedź S.A. on projects related to
modernisation of the pyrometallurgical processes at the Głogów Copper smelter, the development of
smelting at the Głogów and Legnica Copper Smelters and investments at the Tailings Storage Facility, as
well as the restructuring of the energy project. Involved in providing legal services for the largest
investments implemented in Poland, including the construction of a refinery in Gdańsk, the construction
of petrochemical and energy facilities for the Orlen S.A. Group.
Associated with the energy market for many years in the scope of construction of conventional and
renewable sources as well as in the expansion of transmission networks. Since 2020, she has been
associated with Hyundai Engineering Poland sp. z o.o., where she initially worked, among others, as the
General Counsel and Director for Investment and Development, and subsequently as a Member of the
Management Board since 2021.
She has extensive experience in conducting and supervising technologically complex investment processes
of international range.
151
Scope of competence of the Vice President of the Management Board (International Assets) from 1 January 2024 to 31 July 2024.
Strategy for the
international assets
Developing the
international resource
base
International
exploration and
resource projects
Substantive oversight
over the international
production
subsidiaries
Shaping of commercial
and logistics policies
Identification of
international
development
opportunities
Scope of competence of the Vice President of the Management Board (International Assets) from 1 August 2024 to 31 December 2024.
Strategy for the
international assets
Developing the
international resource
base
International
exploration and
resource projects
Substantive oversight
over the international
production
subsidiaries
Identification of
international
development
opportunities
Corporate oversight
over international
subsidiaries
Supervisory Board
Tadeusz Kocowski
Chairman of the
Supervisory Board
Professor, habilitated doctor of law. Professor and a former Head of the Department of Economics Law of
the Faculty of Management of the Wrocław University of Economics and Business. A retired professor of
the Wrocław University, a former director of the Institute of Administrative Studies and a Head of the
Department of Public Economic Law of the Faculty of Law, Administration and Economics of Wrocław
University.
He is the author or co-author of around 200 academic publications, among others: Administracyjne prawo
gospodarcze (Administrative economic law), Publiczne prawo gospodarcze (Public economic law),
Reglamentacja działalności gospodarczej w polskim administracyjnym prawie gospodarczym (Rationing of
economic activities in Polish administrative economic law), Prawo dla ekonomistów (Law for economists),
Zamówienia publiczne jako przedmiot regulacji prawnej (Public procurement as a subject of regulations),
Prawo geologiczne i górnicze (Mining and geological law). He promoted 10 doctors of law, prepared 11
reviews of doctoral theses and participated in 4 postdoctoral dissertations. Co-author of joint studies of
the Wrocław University and Wrocław University of Economics and Business, the graduates of which receive
diplomas of both universities, entitled Legal and Economic Consulting.
At the turn of the twentieth century, and currently as well, he actively participates in the process of
economic transformation. Initially in affairs of a self-governing state-owned company and the self-
government of its employees, restitution of commercial companies and local self-governments engaged in
economic activities and subsequently in economic freedom and organisational-ownership changes. In the
years 90-92 he cooperated with KGHM Polska Miedź S.A. in the process of transforming the business.
He was an advisor in the Economic Development Section of the Voivodeship Office in Wrocław, a member
of the Self-Government Appeal Court. He is an arbitrator in the Wrocław Centre of Arbitration at the District
Barristers Council in Wrocław. He is related with the issues of public procurement and public-private
partnerships. He participated in the creation of regulations on safety and fire protection, organiser of many
academic conferences on this topic.
Marian Noga
Professor of economic sciences, he served as Rector of the Wrocław University of Economics and Dean of
the Faculty of National Economy at the same university. In the years 2000-2004 he was a Senator of the 4th
and 5th terms of the Republic of Poland. He was a member of the Monetary Policy Council in the years
2004-2010. Chairman of the Committee on Economic Sciences of the Polish Academy of Sciences in the
years 2007-2014. In 2010, he was awarded the badge of honour “For merits to banking in the Republic of
Poland”. Author of 34 monographs and more than 170 scientific articles published in Poland, Germany,
Ukraine and the United Kingdom. He is a regular economic commentator on television, radio and the press.
Boguslaw Szarek
Secretary of the
Supervisory Board,
member of the
Supervisory Board
elected by the
employees of the Group
Since 1982 at the Sieroszowice Mine of KGHM Polska Miedź S.A. as a mining machinery and tools mechanic.
Secondary technical education.
Since 1992 – Chairman of the Plant Committee of the trade union NSZZ „Solidarność” in the Sieroszowice
Mine. Following the merger of the Polkowice mine with the Sieroszowice mine, since 1996 – Chairman of
the Plant Committee of the trade union NSZZ „Solidarność” in the Polkowice – Sieroszowice mine. Since
2012 – employee-elected Member of the Supervisory Board of KGHM Polska Miedź S.A.
Chairman of the Board of the trade union Krajowa Sekcja Górnictwa Rud Miedzi NSZZ „Solidarność” in
Lubin. Vice-Chairman of the Board of the Secretariat for Mining and Energy of the trade union NSZZ
„Solidarność” in Katowice. Member of the National Committee of the trade union NSZZ „Solidarność”.
Aleksander Cieśliński
Deputy Chairman of the
Supervisory Board
Legal counsel with over 20 years of experience in developing legal and expert opinions in the area of EU
law and international protection of human rights for entities in the public and private sectors, international
law, as well as experience in participating in proceedings before the European Court of Human Rights and
the Court of Justice of the European Union.
Moreover, he engaged in economic activity related to international trade and has experience in trade
negotiations with foreign entities.
He is a graduate of the Faculty of Law and Administration of Wrocław University. He received recognition
by the Council of the aforementioned Faculty for his doctorate in international law. He is a professor in the
International and European Law Department of the Faculty of Law, Administration and Economics of
Wrocław University. He conducts seminars and lectures on full-time and postgraduate studies, as well as
English speaking studies such as LMM (Large Language Model).
He has many years of experience in lecturing and teaching, among others for legal trainees, legal advisers
and judges. He was a lecturer in the Department of Economic Law of Wroclaw University of Economics, in
the Copper Basin Vocational University in Lubin and in the Higher School of Trade in Wrocław. He is the
author and co-author of many academic publications and scientific publications, among others in the area
of EU and economic law, including “System prawa UE” (European Union law system) and “Komentarz do
Traktatu o Unii Europejskiej” (Commentary to the Treaty on the European Union).
Józef Czyczerski
Secondary technical education. Since 1979 at the Sieroszowice Mine of KGHM Polska Miedź S.A.
underground electromechanic. Chairman of the trade union Krajowa Sekcja Górnictwa Rud Miedzi NSZZ
152
Member of the
Supervisory Board
elected by employees of
the Group
Solidarność. Employee-elected member of the Supervisory Board of KGHM Polska Miedź S.A. in the years
1999-2011, and then from 2014.
Przemyslaw Darowski
Member of the
Supervisory Board
elected by employees of
the Group
Has higher technical education. Professional work commenced in 1997 as a metallurgist, next as a railways
rolling stock Specialist in Pol- Miedź Trans Sp. z o.o. From 2003 Head of the Unit responsible for
maintenance planning and settlement as well as Maintenance Control, subsequently Head of the Railways
Operations Unit in Głogów. From 2006, Senior Specialist / Commissioner of the Railway Cars Maintenance
Handover Unit. Cooperated with the Gmina (municipality) of Legnica, on behalf of which Zespół Szkół
Technicznych i Ogólnokształcących im. (Henryk Pobożny Technical and General School Complex) in Legnica
acts as regards the operation of a training and examinations center for train drivers and candidates for
train drivers.
Former member of the railways commissions in Pol-Miedź Trans which review railway accidents and
incidents. Moreover, in the years 2017-2019 served as an Employee Labour Inspector. Currently Chairman
of the Interdivisional Commission of the NSSZ „Solidarność” trade union in Pol-Miedź Trans. Member of
the trade union Sekcja Krajowa
Górnictwa Rud Miedzi NSZZ „Solidarność”. Member of the Management Board of Region Zagłębie
Miedziowe of the trade union NSSZ „Solidarność”.
Zbysław Dobrowolski
Professor of the Jagiellonian University in Kraków, Ph.D in Economics: economics and corporate
organisation, with the status of habilitated doctor in the area of management.
He has more than 30 years of experience in research and the evaluation of enterprises involving public
property, including resulting from more than 25 years of work at the supreme national control body,
among others as a manager of one of the delegations. Engaged in internal auditing activities. Author of
numerous scientific publications on controlling, auditing and implementation of the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) guidelines. Expert in many international
programs, including those financed by the International Organization of Supreme Audit Institutions
(INTOSAI), Organisation for Economic Co-operation and Development (OECD) and EU. A speaker during the
Organization for Security and Co-operation in Europe (OSCE) conference.
In 1998 he took part in a prestigious internship aimed at the management of the highest governmental
control bodies: the GAO International Auditor Fellowship Program of the U.S. Government Accountability
Office. Since 2008 he had been involved with INTOSAI, where in the role of expert he trained employees of
the highest governmental control bodies from several dozen countries, and co-founded three global
standards and audit guidance. He is an expert involved in a dozen or so international enterprises, including
those organised by the OECD or the European Union, aimed at improving the management of international
organisations in other countries.
Dominik Januszewski
An experienced manager, an expert in the areas of management and finance. For more than 25 years he
worked in the companies Ernst&Young and Arthur Andersen. In the years 2005-2019 he was a Partner in
Ernst&Young responsible for projects involving business consultancy, transactional consultancy and
privatisation, as well as the auditing of financial statements. As a Partner, he managed a team of more than
200 consultants. His clients included the largest financial institutions in Poland. Currently he is responsible
for a strategic consulting team at JLL involved in developing and implementing an ESG strategy as well as
a strategy to optimize the energy aspects of companies. He is a Polish Certified Auditor, and has taken
numerous professional courses in the areas of auditing, consultancy and management. In 2022 he received
a Certificate from the University of Cambridge: “Business Sustainability Management”. He is a graduate of
the University of Łódź, Faculty of Economics-Sociology, specializing in Finance and Banking.
Piotr Prugar
He is a graduate of the Faculty of Law and Administration of Wrocław University. Legal counsel, with many
years of experience in the area of legal services and management of economic entities. Co-worked as and
served as the receiver, liquidator and proxy for company management boards. Served as a representative
of creditors in insolvency and restructuring proceedings, among others in GetBack S.A w restrukturyzacji,
Hawe Telekom S.A. w restrukturyzacji, Fakos sp. z o.o. [subsidiary of Kopex SA], Technical Glassworks (Huta
Szkła Technicznego), Paper Mill in Dąbrowica (Fabryka Papieru w Dąbrowicy), Julia Glassworks (Huta Julia)
and others.
Joanna Zakrzewska
Qualified manager with many years’ experience in management, audit and finance. For years, she has held
management positions in both Polish and international companies, i.e. Amazon, Deloitte, KPMG, LOT or
Noble Bank, pursuing her passion for improving organisational effectiveness also as an external advisor.
Expert in internal audit, corporate governance and risk. Advocate for sustainable development. Practitioner
of the development, implementation and attestation of internal control systems.
She started her career in the field of financial auditing, specialising in the analysis and audit of financial
statements. She served as coordinator for SOX implementation in Europe. As Director of Internal Audit,
she created and reorganised the internal audit function, working closely with the supervisory boards.
She studied at universities in Poland and abroad. Graduate of the Faculty of Economics, majoring in
Organisation and Management. Scholarship holder of the Hogeschool voor Economisch Administratief
Onderwijs. She completed postgraduate studies in "Business Psychology" (L. Koźmiński Academy).
She holds international qualifications in the areas of finance and internal audit: Association of Chartered
Certified Accountants (FCCA) and the Institute of Internal Auditors (CIA).
Chair of the ACCA Council Poland. She is a member of the Association of Independent Supervisory Board
Members, the Programme Council of the "Financial Director Forum", the Institute of Internal Auditors and
Chapter Zero Poland.
Speaker. Author or co-author of publications, training courses, reports and analyses on internal audit, risk,
sustainability and the luxury goods market. Lecturer.
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Table 92. Information on the composition and diversity of the administrative, management and supervisory bodies of
KGHM Polska Miedź S.A. as at 31 December 2024.
Number of executive and non-executive
members
− Management Body - 6 executive members
− Supervisory Body - 9 non-executive members (until 31 December 2024)
− Supervisory Body - 10 non-executive members (after 31 December 2024)
Representation of employees and other
persons providing work and percentage of
independent members of the bodies
3 Members of the Supervisory Board (non-executive) elected by employees of the
KGHM Group
Percentage according to gender and other
aspects of diversity
Management Board:
− Number of women - 1 (accounting for 16.7%)
− Number of men - 5 (accounting for 83.3%)
Supervisory Board
− Number of men - 9 (accounting for 100%)
Percentage of independent members of the
body
Supervisory Board - 5 independent members (accounting for 55%)
After the balance sheet date, i.e. from 8
January 2025
Percentage according to gender and other
aspects of diversity
Supervisory Board
− Number of women - 1 (accounting for 10%)
− Number of men - 9 (accounting for 90%)
Information on the roles and responsibilities of the administrative, management and supervisory bodies in the
scope of supervising impacts, risks and opportunities
The Members of the Management Board are in charge for the areas defined in the Organisational Regulations of KGHM
Polska Miedź S.A. and in the resolutions of the Supervisory Board of the Company, taking decisions independently in their
respective areas of responsibility. In accordance with the Organisational Regulations of KGHM Polska Miedź S.A., members
of the Management Board manage and supervise subordinate organisational units in order to fulfil their duties.
The Supervisory Board consists of standing committees (including the Audit Committee and the Strategy Committee), which
support the Supervisory Board in preparing assessments, opinions and other activities aimed at preparing the decisions
made by the Supervisory Board. Internal regulations on the basis of which the following Committees organize their work
and their changes are adopted by the Supervisory Board.
The Management Board of KGHM Polska Miedź S.A. is ultimately responsible for the risk management system and the
oversight of its individual elements. The system also includes ESG risk, as an integral part of the corporate risk management
process in the KGHM Polska Miedź S.A. Group.
The Supervisory Board performs an annual assessment of the effectiveness of the risk management process and monitors
the level of risk and the way it is handled (Audit Committee), evaluates and monitors the Company's strategic initiatives,
including the risks and opportunities associated with long-term development (Strategy Committee). The Director of the
Enterprise Risk Management and Compliance Department is responsible for overseeing the maintenance and development
of a comprehensive enterprise risk management system within the KGHM Polska Miedź S.A. Group, where ESG risk is an
integral part. As part of the second line of defence, tasks are performed by the Corporate Risk Management and Compliance
Department and the Corporate Risk and Compliance Committee is established within the governance structures.
The Director of Strategy Department reports to the Executive Director for Strategy and Investment and is responsible for
maintaining and developing the strategic management process and procedures, including ESG opportunities. Ongoing
activities related to the management of individual impacts are performed through specific managerial positions, in
accordance with the responsibilities assigned under the Organisational Regulations of KGHM Polska Miedź S.A.
Roles have been assigned to individuals in specific management level positions and supervision is provided according to
the principles of subordination in compliance with the scheme in place.
The appointed Enterprise Risk Management and Compliance Committee is responsible for issuing recommendations
regarding the update of the KGHM Group's List of Key Risks (including KGHM Group Risk Maps), with the aim of submitting
it to the Management Board for approval and issuing Recommendations regarding Risk Response Plans and Adjustment
Measures for KGHM or the KGHM Group addressed to the Committee. The Corporate Risk and Compliance Committee is
managed by its Chairman. In accordance with the Best Practices for WSE-listed Companies, persons responsible for risk
management and compliance report directly to the President of the Management Board. The Supervisory Board is the body
whose overriding task is to exercise continuous supervision over the Company's activities in all its areas. The risk
management and compliance function is subject to the assessment of its effectiveness by internal and external audit.
As part of the Enterprise Risk Management process, where ESG risk is an integral part and the Compliance process, the
Director of the Enterprise Risk Management and Compliance Department prepares Quarterly Risk Management Reports
and a the Compliance Management Report, which are submitted to the Enterprise Risk and Compliance Committee for
analysis. The Corporate Risk and Compliance Committee issues recommendations to the Management Board of the
Company regarding the approval of these reports. After the approval by the Management Board, the reports are sent to
the meeting of the Audit Committee of the Supervisory Board of KGHM Polska Miedź S.A. In accordance with the strategic
154
management process in place, the Strategy Risk Map is updated annually as a graphical presentation of the results of risk
assessment and strategic opportunities, including the ESG.
The processes of management of corporate risk, opportunities and impacts form an integral part of activities carried out
by the Organisational Units of the KGHM Polska Miedź S.A. Group. The results of work in the above-mentioned areas serve
as input data for other business processes operating in the Group (core and supporting processes).
The Supervisory Board of KGHM Polska Miedź S.A. sets objectives, weights and measurable criteria (indicators and KPIs) for
Members of the Management Board. The catalogue of management goals is described in the Remuneration Policy. In
determining the management goals for a given year, the current significant impacts, risks and opportunities within the
activities conducted are taken into account. The variable remuneration for the ended financial year depends, among other
things, on: the General Meeting discharging the Member from his/her duties in the financial year ended, the submission of
a report to the Supervisory Board on the fulfilment of the management goals and the assessment of the fulfilment of these
goals. Based on this, the Supervisory Board determines the amount of variable remuneration payable to the Management
Board Member concerned.
Once the Supervisory Board has adopted the management goals for the year concerned, the Management Board
determines the major directions of action, performance indicators and solidarity measures for senior management. The
Goal Cards are approved by the members of the Management Board according to their duties. The annual evaluation of
the achievement of these goals and work takes place after the publication of the consolidated annual report by the
Company.
The skills and expertise of the Members of the Management Board affect their ability to properly analyse and assess impacts
and associated risks and to take them into account in the conduct of the Company's affairs and in making management
decisions on how to respond to events that may relate to both impacts and risks, taking into account the Company's
organisational, financial and production capacity.
In accordance with the corporate governance principles in force in the Company in the scope of the risk management and
compliance function, risk ownership is determined on the basis of assigned duties and responsibilities within subordinate
areas of competence. Consequently, the KGHM Group has a transparent and consistent risk management system adapted
to its specific nature and provides strong support for decision-making at all levels of the organisation.
In connection with the management board’s duties arising from the contract for the provision of management services,
including the duty to act with the utmost care and professionalism, Members of the Management Board of KGHM Polska
Miedź S.A. are obliged to participate in conferences, seminars, business meetings related to the Company's activities, as
well as in individual training sessions.
In 2024, Members of the Management Board of KGHM Polska Miedź S.A. participated in the dedicated ESG training entitled
"Sustainability reporting - the Management Board’s perspective". Moreover, Members of the Management Board
represented the Company at national and international conferences and fora where sustainability issues and non-financial
reporting is discussed, including KGHM's contribution to global sustainability challenges. These events included:
− Seminar on "Health and safety protection of workers in the raw materials industry. Be responsible for
others."(organiser: Polska Miedź Employers' Association)
− Debate “A Clean Industrial Deal What's in it for industry. What's in it for climate?" (organiser: Business and Science
Poland)
− EuroPOWER & RES POWER Conference (organiser: MM Conferences S.A.)
− Wall Street 28 conference (organiser: Individual Investors Association)
The Supervisory Board and the Management Board of KGHM Polska Miedź S.A. also have an access to specialists in the ESG
Division, created in 2023, in 2024 converted into the Department which supports them in the area of sustainable
development. Moreover, the Company cooperates with external companies specialising in sustainable development, thus
providing access to current knowledge and expertise in this area.
In addition, in 2024, Members of Supervisory Boards, Management Boards of domestic Group’s companies and Executive
Officers participated in the dedicated ESG presentation entitled "Sustainability reporting - the Management Board’s
perspective. New EU regulatory requirements vs. the reporting process" as part of one of the KGHM Polska Miedź S.A.
Group’s Board Meetings.
Individual selected competences of the administrative, management and supervisory bodies in terms of supervising
sustainability issues:
Joanna Zakrzewska (Member of the Supervisory Board appointed as of 8 January 2025)
− Expert in the scope of internal audit, corporate governance and risk.
− Author or co-author of publications, training courses, reports and analyses in the scope of internal audit, risk,
sustainable development and the luxury goods market.
− Chairwoman of the ACCA Poland Board and member of Chapter Zero Poland - a programme for the development of
competence of management and supervisory bodies in the area of climate.
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Dominik Januszewski (Member of the Supervisory Board)
− Holder of the University of Cambridge Certificate „Business Sustainability Management.
− Experienced in strategic consulting at JLL: developing and implementing an ESG strategy as well as a strategy to optimize
the energy aspects of companies.
Aleksander Cieśliński (Member of the Supervisory Board)
− Experience in developing legal and expert opinions in the area of EU law, international protection of human rights for
entities in the public and private sectors, international law, including the participation in proceedings before the
European Court of Human Rights and the Court of Justice of the European Union.
Andrzej Szydło (President of the Management Board)
− Experience in the implementation of Integrated Management Systems, including ISO-based.
− Specialising in management and the implementation of innovative solutions as well as the realisation of investment
and maintenance projects.
Piotr Krzyżewski( Vice President of the Management Board (Finance)
− He built and obtained the first Sustainability Linked-Loan (SLL) in Central and Eastern Europe in the mining sector.
− He completed numerous courses and training in the areas of team management, crisis management, communication
and international cooperation.
Iga Dorota Lis - Vice President (International Assets)
− A lecturer under post-graduate studies in the area of new technologies and environmental protection law.
− Experience in the energy, petrochemical, chemical and metallurgical sectors.
Mirosław Laskowski( Vice President of the Management Board (Production))
− Originator and co-creator of KGHM’s unified safety system based on 3 pillars: education, environment and health as
well as solutions in the scope of combating mine-related threats.
[GOV-2] Information provided to the entity's administrative, management and supervisory bodies and the
sustainability issues they undertake
In the KGHM Group, communication with administrative, management and supervisory bodies, as well as with various types
of committees, is carried out in a systematic manner, ensuring effective information flows and support for decision-making.
Meetings are organised on a regular basis, according to an agreed work schedule, at a monthly or quarterly frequency. Ad
hoc meetings are also organised in response to emerging needs, new challenges or urgent issues.
Information provided as part of this collaboration is tailored to the specific topics and needs discussed. Forms of
communication used include written reports, presentations, face-to-face meetings or transmission via digital platforms.
This approach supports agile management, enables ongoing monitoring of key issues and fosters rapid decision-making in
a dynamically changing business environment.
The administrative, management and supervisory bodies are informed of significant impacts, risks and opportunities, as
well as the implementation of due diligence and the results and effectiveness of the policies, actions, measures and targets
adopted to address them through the following Committees:
− Risk Committee - at least on a quarterly basis
− Audit Committee - not less frequently than four times a year
− Development Committee - the Committee works on a continuous basis. Meetings of the Committee are held as required
− Strategy Committee - not less frequently than twice a year
− Remuneration Committee - not less frequently than twice a year
Moreover, information is also provided through audit reports and internal control reports, as well as within weekly
management meetings.
Administrative, management and supervisory bodies take into account impacts, risks and opportunities when overseeing
the entity's strategy, making decisions on key transactions and in the risk management processes. This process includes,
among others, the analysis of potential trade-offs associated with the identified impacts, risks and opportunities and the
156
assessment of their relevance to the achievement of strategic objectives. In particular, these bodies assess the long-term
consequences of business decisions, taking into account not only financial, but also environmental, social and corporate
governance issues.
In mid-2024, the assessment of the materiality of impacts, risks and opportunities in the context of sustainability reporting
was conducted in the KGHM Group. As part of this process, workshops were organised with the participation of senior
management to discuss the perspective of ESG (environmental, social and corporate governance) aspects in terms of the
substantive units of the KGHM Group. These workshops were aimed at identifying and assessing sustainability impacts,
risks and opportunities associated with sustainable development in key areas throughout the value chain.
In parallel, in the same period, work was carried out on updating of the Strategy of the KGHM Polska Miedź S.A. Group to
the year 2030 with an outlook to 2040. All information on identified impacts, risks and opportunities identified during the
materiality assessment and stakeholder dialogue, was included in the analysis process for the purposes of the update of
the KGHM Group’s Strategy. However, it should be noted that not every identified impact, risk and opportunity will be
directly addressed in the KGHM Group's Business Strategy.
In accordance with applicable legal regulations and internal procedures, the Management Board of the Group performs a
key operational and decision-making function in respect of the Company's strategy and operations, taking into account
environmental, social responsibility and corporate governance issues. Responsibility for these areas was distributed
amongst individual Members of the Management Board, who supervised and managed activities in line with the defined
strategic objectives.
Table 93. The Management Board’s responsibility for the achievement of ESG goals - as at 31 December 2024.
Strategic direction
Responsible Member of the
Management Board
Area related to:
Environment
Social
Governance
Core business
1.1 Advanced technology and R&D forming a
smart production chain
Vice President of the Management
Board (Development)
x
x
-
1.2 Optimisation of mine production
domestically and abroad ensuring long-term
operational continuity
Vice President of the Management
Board (Production)
Vice President of the Management
Board (International Assets)
x
-
-
1.3. Leader in the development of low-
emissions mining capacity for new metals and
mineral deposits in Poland
Vice President of the Management
Board (Development)
x
-
-
1.4. Development of metallurgy utilising
efficient processing based on Circular
Economy assumptions.
Vice President of the Management
Board (Production)
x
-
-
New activities
2.1. One of the leading producers of
environmentally-friendly electricity -
supporting Poland’s energy transformation
Vice President of the Management
Board (Finance)
x
x
-
2.2. Expansion along the value chain through
the development of new products from
copper and other metals (including
establishing cooperation with partners in
Poland and abroad).
President of the Management
Board
Vice President of the Management
Board (Production)
x
-
-
Supporting activities
3.1. Major supplier of Smart Mining solutions
for products and services sold in Poland and
globally.
Vice President of the Management
Board (Development)
Vice President of the Management
Board (Corporate Affairs)
x
x
-
3.2. Ensuring the financial stability of the
KGHM Group and implementing systemic
solutions aimed at increasing the Group's
value
Vice President of the Management
Board (Finance)
Vice President of the Management
Board (Corporate Affairs)
-
-
x
Health
4.1. Development of pro-health activities and
health resorts as a contribution to extending
the length and quality of life of citizens
Vice President of the Management
Board (Corporate Affairs)
-
x
-
Prosociality
5.1. Growth based on the idea of
sustainability and safety
President of the Management
Board
x
x
x
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Parallel to the activities of the Management Board, the Supervisory Board fulfils the supervision role, providing an ongoing
analysis of the Company's approach to key risk categories related to the achievement of business objectives, through the
Audit Committee of the Supervisory Board, including the monitoring of the risk management function. The Company
informs the Supervisory Board of the exposure of its activities to key risks, presenting the assessment of the vulnerability
to individual risk factors, as well as an assessment of the impact and likelihood of materialisation of negative events.
However, it should be emphasised that the risk management process involves a certain degree of uncertainty in terms of
effectiveness of risk mitigation measures, particularly in areas beyond the direct control of the KGHM Group.
The list of material impacts, risks and opportunities that were subject to analyses and actions undertaken by the Company's
administrative and management bodies in the reporting period is presented in section SBM-3 Significant impacts, risks and
opportunities and their links with the strategy and business model, as it is equivalent to the list of identified material
impacts, risks and opportunities in 2024.
Impacts and opportunities were not subject to analyses and actions undertaken by the supervisory authorities in the
reporting period. The Supervisory Board, through the Audit Committee of the Supervisory Board, performed the annual
assessment of the effectiveness of the risk management process and monitored the level of risk and the method of its
addressing.
[GOV-3] Incorporating sustainability-related results into incentive schemes
The basic legal act regulating the remuneration rules for members of the Management Board and the Supervisory Board
of the Company is the Remuneration Policy for Members of the Management Board and the Supervisory Board of KGHM
Polska Miedź S.A., adopted by the General Meeting.
The remuneration procedure for members of the Management Board and the Supervisory Board defined in the
Remuneration Policy takes into account the rules arising from the Act on the principles of shaping the remuneration of
persons managing certain companies (Journal of Laws 2020, item 1907). In accordance with the Commercial Partnerships
and Companies Code and the Statutes of KGHM Polska Miedź S.A., setting the remuneration and other terms of
management service contracts for members of the Management Board is the responsibility of the Supervisory Board. The
Supervisory Board concludes management service contracts with members of the Management Board based on the rules
set out in the Remuneration Policy.
The targets for the Management Board and the criteria for their implementation in terms of financial and non-financial
performance are defined by the Supervisory Board, with reference to the level of implementation of the KGHM Group’s
strategy. In particular, the key performance indicators (KPIs) are linked to the strategic objectives that fit into individual
pillars and areas of the Strategy, taking into account the key measures of success assigned to them. Target-setting criteria
adopted:
− have a positive impact on the commitment of the members of the Management Board to their functions in the
Company,
− motivate the members of the Management Board to pursue the Company's business strategy and interests,
− affect the adequate assessment of risks by members of the Management Board, including the assessment of the
Company's ESG-related risks, opportunities and impacts.
The management objectives, including those determining the possibility of acquiring rights to variable remuneration by
members of the Management Board of KGHM Polska Miedź S.A., are set on a case by case basis by the Supervisory Board
in the form of a resolution.
The variable remuneration for the completed financial year shall be due to the Management Board member concerned,
after the General Meeting has approved the Management Board's report on the Company's operations and the financial
statements for the completed financial year, and the General Meeting has approved the fulfilment of duties to that member
for the completed financial year, after submitting a report to the Supervisory Board on the fulfilment of management goals
in the past financial year and if the Supervisory Board determines that they have been fulfilled.
While determining the degree of achievement of management goals, the Supervisory Board sets the amount of variable
remuneration due to the respective Member of the Management Board.
In the case of fulfilment of the conditional objectives, the basis for calculating the variable remuneration for individual
Management Board Members is the degree of fulfilment of the management goals set out in the objective cards.
Management goals are cascaded in the form of KPIs to Head Office and Division directors in the form of a Management
Board resolution.
As part of the incentive scheme, goals as regards sustainable development have been assigned to members of the
Management Board of KGHM Polska Miedź S.A. as presented in the table below.
158
Table 94. Management and strategic goals of members of the Management Board of KGHM Polska Miedź S.A. in terms
of sustainable development for 2024.
Member of the Management
Board
Management and strategic goals regarding sustainable development
Contribution of the
goal to the general
objectives for 2024
President of the
Management Board
− Review and update of the KGHM Group’s Strategy
− Energy strategy in the scope of renewable energy development in the KGHM Group
15%
5%
Vice President of the
Management Board
(Finance)
− Review and update of the KGHM Group’s Strategy
− Energy strategy in the scope of renewable energy development in the KGHM Group
− Building a funding concept for the energy strategy
5%
5%
10%
Vice President of the
Management Board
(Development)
− Review and update of the KGHM Group’s Strategy
− Concept of tailings management for depletion of resources based on the current ZTE*
− Metallurgy development directions
− Renewable energy - technology overview
5%
10%
5%
5%
Vice President of the
Management Board
(Production)
− Review and update of the KGHM Group’s Strategy
− Metallurgy development directions
− Maintaining work safety in KGHM
5%
5%
5%
Vice President of the
Management Board
(International Assets)
− Review and update of the KGHM Group’s Strategy
− Maintaining work safety in KGHM
5%
10%
Vice President of the
Management Board
(Corporate Affairs)
− Review and update of the KGHM Group’s Strategy
5%
*A document entitled Technical and economic assumptions (ZTE)
The subsidiaries of the KGHM Group apply remuneration principles corresponding to those adopted in KGHM Polska Miedź
S.A. In accordance with the provisions of the Commercial Partnerships and Companies Code and other applicable
legislation, the remuneration of the management bodies is approved by the supervisory board, while the remuneration of
members of the supervisory board is approved by the general meeting of shareholders or the partners' meeting. In the
domestic and international assets of the KGHM Group, in accordance with applicable laws and corporate governance
principles, members of the supervisory boards do not receive variable remuneration nor are they covered by incentive
systems and incentive schemes linked to sustainable development.
With the exception of the following cases, the operating companies of the KGHM Group have not introduced any strategic
sustainability goals into their incentive and remuneration systems for members of the Management Board:
− In KGHM ZANAM S.A., the management goals comprise activities related to the development of machines equipped
with low-emission engines, including the production of machines that meet at least the STAGE V exhaust emission
standard and the development of a prototype blasting vehicle with this type of engine.
− PMT Linie Kolejowe sp. z o.o. pursues circular economy objectives by focusing on the recovery and reuse of railway
aggregate from track surface replacement.
− In “Energetyka” sp. z o.o., investments in the development of renewable energy sources (RES), with a weight of 10%, and
the reduction of process and mine water used at the Żelazny Most Tailings Storage Facility, also with a weight of 10%,
are included in the management goals.
− In KGHM INTERNATIONAL, management goals include activities in the area of "Zero Harm”, with an assigned weight of
15%.
− The management goals in KGHM Chile are related to the “Zero Harm” area with an assigned weight of 10%, the
environment area with a weight of 6%, and the human resources management (HR) area with a weight of 9%.
− In DMC Mining Services Ltd, management goals relate to HSE (health, safety, environment) results and are assigned a
weight of 15%.
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[GOV-4] Due diligence declaration
The KGHM Group acts with due diligence in managing sustainability issues. Detailed information related to this issue is
included, among others, in the following sections of this document:
Table 95. Basic elements of the due diligence process included in the sustainability reporting
Key elements of the due diligence
process
Items in the sustainability reporting
Incorporation of due diligence
into governance, strategy and
business model
− [GOV-2] Information provided to the entity's administrative, management and supervisory
bodies and the sustainability issues they undertake
− [GOV-3] Reflecting sustainability-related results in incentive schemes
− [SBM-3] Significant impacts, risks and opportunities and their links with the strategy and
business model
Cooperation with stakeholders
affected by the entity at all key
stages of the due diligence
process
− [SBM-2] Interests and views of stakeholders
Identification and assessment of
adverse impacts
− [SBM-3] Significant impacts, risks and opportunities and their links with the strategy and
business model
−
− [IRO-1] Description of the process to identify and assess significant impacts, risks and
opportunities
− [GOV-5] Risk management and internal controls over sustainability reporting
Taking action to reduce
identified adverse impacts
− [E1-3] Activities and resources in relation to climate policy
− [E2-2] Pollution-related activities and resources
− [E3-2] Activities and resources related to water and marine resources
− [E4-3] Activities and resources related to biodiversity and ecosystems
− [E5-2] Activities and resources related to the use of resources and circular economy
− [S1-4] Addressing the significant impacts on own staff resources and applying approaches to
manage material risks and opportunities related to own staff resources and the effectiveness
of these actions
− [S2-4] Addressing the significant impacts on workers in the value chain and applying
approaches to manage material risks and using opportunities related to workers in the value
chain and the effectiveness of these actions
− [S3-4] Addressing the significant impacts on affected communities and applying approaches
to manage material risks and opportunities related to these communities and the
effectiveness of these actions
− [S4-4] Addressing the significant impacts on consumers and end users and applying
approaches to manage material risks and opportunities related to consumers and end users
and the effectiveness of these actions
Monitoring the effectiveness of
these efforts and providing
relevant information in this
regard
− [E1-4] Goals related to climate change mitigation and adaptation to it
− [S1-5] Goals related to managing significant negative impacts, enhancing positive impacts
and managing significant risks and opportunities
− [S2-5] Objectives related to managing significant negative impacts, enhancing positive
impacts and managing material risks and significant opportunities
− [S3-5] Goals related to managing significant negative impacts, enhancing positive impacts
and managing significant risks and opportunities
− [S4-5] Objectives related to managing significant negative impacts, enhancing positive
impacts and managing material risks and significant opportunities
[GOV-5] Risk management and internal controls over sustainability reporting
Risk management in the area of sustainable development
Risk management is consistent across the KGHM Group and supports the resistantance of the corporate structure. Actions
were taken in the reporting period regarding ESG risks, comprising environmental, social and corporate governance
aspects. The compliance management process supports the achievement of sustainable development goals. More
information is presented in section SBM-3 Significant impacts, risks and opportunities and their links with the strategy and
business model and in [IRO-1] Description of the process to identify and assess significant impacts, risks and opportunities.
Internal controls over sustainability reporting
The ESG Department has been established in the organisational structures of the KGHM Group, which acts as a coordinator
of sustainability reporting, ensuring the consistency and quality of the reporting processes. The ESG department is
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responsible for integrating data from the Group's various business areas and for supervising the compliance of the reports
with applicable standards, including the requirements arising from the ESRS.
In order to increase the effectiveness of the reporting process, ESG coordinators were appointed in the KGHM Group’s
subsidiaries, who are responsible for the collection, analysis and initial verification of the data. The management boards of
individual subsidiaries have been directly committed as bodies responsible for the verification and completeness of the
sustainability data reported, thus strengthening the internal control process and ensuring accountability at the decision-
making level.
The data provided by the subsidiaries is then verified at the ESG Department level or in dedicated substantive units that
specialise in particular aspects of sustainability reporting (e.g. environment, human resources, corporate governance). This
model of organising the reporting process allows for accurate analysis and elimination of potential errors at an early stage
of report drafting.
The completeness of ESRS disclosures is verified at two levels. The initial verification takes place at the level of the business
units, and subsequently by the ESG Department of the Company.
The KGHM Group uses a specialised IT tool to aggregate sustainability data. This tool streamlines the reporting process,
mitigating the risk of errors due to manual data processing, ensures the consistency of the information reported and its
adequate archiving for audit purposes.
The key stages in the sustainability reporting process, such as:
− final confirmation of the subjects of the double materiality test,
− final approval of the disclosures by the substantive units,
− final approval of the materials by the Management Board or the Supervisory Board,
involve the Company's top management. The involvement of key decision-makers at these stages ensures that the
reporting process is carried out in accordance with the highest standards and highlights the strategic importance of
sustainability issues for the Group.
[SBM-1] Strategy, business model and value chain
Description of the business model and value chain
The KGHM Polska Miedź S.A. Group is one of the ten largest producers of mined copper worldwide and the second largest
producer of silver
49
. It has over 35,000 employees in more than 60 companies on four continents - Europe, North America,
South America and Asia. The activity of the KGHM Group is based on seven key segments that form a complete value
creation chain. They include areas such as exploration of raw materials, their mining, production, transport and delivery of
products to customers and stakeholders, as well as responsible waste management, in order to mitigate the adverse impact
on the environment.
49
Source: CRU, December 2024 and World Silver Survey, April 2024, based on 2023 production
161
Diagram 47. Business model of the KGHM Polska Miedź S.A. Group
The KGHM Group's business model also includes complementary subsidiaries, extending the core business (CB) in areas
such as manufacturing of mining machinery, explosives and metal recycling, among others. Production in the KGHM Group
is a fully integrated technological process in which the end product of one phase becomes an intermediate product used
in the next phase. This structure allows for efficient use of raw materials and cost optimisation.
Table 96. Description of the business model of the KGHM Polska Miedź S.A. Group
Segment
What does it involve?
Why is it important?
Exploration and
evaluation
The stage of geological work associated with the evaluation of
new areas of potential mineralisation, known as exploration.
This stage aims to document new, economically viable
deposits and ends with the preparation of geological
documentation for the particular concession area.
Safeguarding the perspective of continued
mining of documented ore resources is one of
the cornerstones of KGHM's development and
the growth of the Company's value.
Ore mining
Mining of deposits is performed with the use of the open-pit
method or, as in the case of the Parent Entity, the
underground method using blasting technology and battery-
powered mining machinery.
Ore mining is the basic element of KGHM's
business which enables the production of
metals and sales on the market.
Ore enrichment
Copper ore enrichment is the mechanical processing resulting
in the production of a concentrate with copper content
enabling its metallurgical processing.
The enrichment process is necessary as the
copper ore deposits mined by KGHM in Poland
have an average copper content of
approximately 1.5 per cent. Cu. The technology
used allows for the effective recovery of copper
and silver and other elements from the
excavated ore, up to 90 per cent.
Smelting and
refining
Production in the smelters and refineries of KGHM Polska
Miedź S.A. is based mainly on the processing of own copper
concentrates, but it also uses purchased raw materials.
Among other things, electrolytic copper as well as silver and
gold bars are produced at this stage.
Due to the production capacity of Polish copper
smelters, the KGHM Group is one of the world
leaders in the metallurgical industry.
Processing
The copper cathodes produced in KGHM's smelters and
refineries are processed into copper wire rod, oxygen-free
wire and low-alloy wire (Cedynia Wire Rod Division).
Processed products of a consistent high quality
respond to market needs and find buyers
worldwide.
Sales and trading
Sales are carried out while ensuring the safety of trading,
taking into account the principles contained in the sales,
credit risk management and market risk policies. One of the
solutions aimed at providing the security of trading is the
appropriate diversification of sales - both product and
geographic - or diversification of customers.
Ensuring the sale of manufactured products
guarantees a sustainable and stable income.
Trade is based on the Fair Trade principles.
Restoration
Safe and environmentally-friendly closure of mines, sand pits
and other industrial facilities.
An element of KGHM's environmental policy
and the basis for responsible business conduct.
A responsibility whose fulfilment builds trust
and reliability.
CE/recycling
Product lifecycle based on the circular economy - the Circular
Economy approach at every stage of the value chain.
162
+ complementary value chain:
Stakeholders
Customers, consumers and partners as a determinant of the KGHM Group's responsible business standards.
Activities
supporting the
CE
R&D activities, provision of energy and heat, including from RES, production of explosives, production and
servicing of mining machinery, transport services, sales and recycling services
Other
Sponsoring and CSR activities, among others, through the KGHM Foundation, as well as therapeutic and spa
activities
The Strategy of the KGHM Polska Miedź S.A. Group to the year 2030 with an outlook to 2040 takes into account issues
related to sustainable development, as presented in the table below:
Table 97. Issues of sustainable development as part of the Strategy of the KGHM Polska Miedź S.A. Group to the year
2030 with an outlook to 2040.
KGHM for the environment
KGHM for society
Corporate governance in KGHM
Development
directions
− Ecology
− Energy
− Efficiency
− Elasticity/Flexibility
− Efficiency
− Energy
− E-industry
− Efficiency
Pillars of the
Strategy
− Pillar 1. Core business
− Pillar 2. New activities
− Pillar 5. Pro-sociality
− Pillar 4. Health
− Pillar 5. Pro-sociality
− Pillar 1. Core business
− Pillar 3. Supporting activities
− Pillar 5. Pro-sociality
Strategic
objectives
− Optimisation of mine production
domestically and abroad
ensuring long-term operational
continuity,
− Leader in the development of
low-emissions mining capacity
for new metals and mineral
deposits in Poland”
− Development of metallurgy
utilising efficient processing
based on CE assumptions
− One of the leading producers of
environmentally-friendly
electricity - supporting Poland’s
energy transformation
− Growth based on the idea of
sustainability and safety
− Development of pro-health activities
and health resorts as a contribution
to extending the length and quality
of life of citizens”
− Growth based on the idea of
sustainability and safety
− Advanced technology and R&D
forming a smart production
chain
− Ensuring the financial stability of
the KGHM Group and
implementing systemic solutions
aimed at increasing the Group's
value
− Growth based on the idea of
sustainability and safety
Table 98. Status of progress of strategic success ratios - level in 2024
Strategic success
ratio (Strategic KPI)
Baseline value of the
ratio in 2020
Targets for 2030
Value of the ratio in
2024
Energy produced
22% of consumption
Minimum 50% of consumption (approx. 1.5 TWh)
656.9 GWh
(21.04% of
consumption)
In 2024, an increase in the volume of energy generated from own generation sources was recorded compared to
2023 (2023 - 578 GWh / 2024 - 656.9 Gwh). 2024 saw an increase in the share of electricity produced in the
company's own generation assets relative to the volume of electricity consumed in the KGHM Group (2023 - 18.36%
/ 2024 - 21.04%).
163
Reduction in
estimated CO
2
emission from
electricity
consumption
50
~1.6 million t eCO
2
1.0 million t eCO
2
~1.42 million t
eCO
2
In 2024, GHG emissions resulting from electricity consumption amounted to approx. 1.42 million t eCO
2
, a decrease
of approx. 0.34 million t eCO
2
compared to 2023. The reduction in emission compared to the previous year resulted
from the reduction in electricity consumption and a lower emission factor for electricity. Achieving climate
neutrality by 2050 is the overarching goal of the Climate Policy of KGHM Polska Miedź S.A., compliant with the
objectives of the Strategy.
Scrap recycling
~124 kt of copper
scrap
~350 kt of copper scrap
159 kt of copper
scrap (dry weight)
The Company is systematically increasing the quantity of copper scrap processed in the copper smelters. The
highest result was achieved in 2024 compared to the base year (2020).
LTIFR
51
i TRIR
52
LTIFR 7.31
Target: 0 accidents
6.64
TRIR 0.52
Target: 0 accidents
0.30
The Company is continuously pursuing its strategic ambition to achieve the lowest possible accident rate.
Level of support to
the Health Area
implemented by
the KGHM Polska
Miedź Foundation
~PLN 11.5 million
53
~PLN 7 million
PLN 8.07 million
(total for
institutions and
natural persons)
The level of support for the Health Area implemented by the KGHM Polska Miedź Foundation was higher than the
level adopted as the strategic goal for 2030.
Number of
volunteer projects
advanced
25 volunteer
campaigns
30 volunteer campaigns
137 voluntary
campaigns
(including 38 shares
in KGHM Group)
The “Copper Heart” employee volunteer programme, launched in KGHM in 2014, was consistently implemented.
Level of support
provided for
culture, sport and
health
~PLN 38.5 million
~PLN 48 million
PLN 48.15 million
The level of support provided for culture, sport and health was close to the value of the strategic target adopted
for 2030.
Significant groups of products or services offered and markets or customer groups
The primary products offered by the Group are copper concentrates, cathodes and copper wire rod. These products are
the result of various stages of processing copper ore and recycling of copper scrap. They are used extensively in a wide
range of industries, including the electrical, construction and automotive industries and the power sector, particularly in
the manufacture of cables, electric wires and electronic components. Copper is also used in renewable energy technology,
including photovoltaics and wind turbines. Copper products, such as cathodes with a purity of 99.99%, are used for further
processing in metallurgical plants, while copper wire rod is an intermediate product in manufacturing of wires and electric
cables. Depending on the degree of processing, copper can be used in a variety of forms adjusted to specific industrial
50
For KGHM Polska Miedź S.A., location-based methodology.
51
LTIFR (ang. Lost Time Injury Frequency Rate) - the total number of accidents at work, within the meaning of the Act of 30 October 2002 on
social insurance due to accidents at work and occupational diseases (Journal of Laws of 2025, item 257, as amended) standardised to 1 million
hours worked. Indicator calculated for KGHM Polska Miedź S.A.
52
TRIR (ang. (Total Recordable Incident Rate) - the ratio of accidents at work that meet the conditions for registration as defined by the ICMM
(International Council on Mining & Metals) standard. Indicator calculated for international assets.
53
Due to the epidemic conditions, the area of activity of the KGHM Polska Miedź Foundation - “Health and Safety” was the
particular priority in 2020, thus the significantly higher financing in this area in the base year.
164
needs. The Group, as one of the key copper producers, supplies copper products to a wide range of industries, supporting
global production and infrastructure.
Table 99. Significant groups of products offered, markets serviced and customer groups in the KGHM Polska Miedź S.A.
Group.
Product
category
Entity and region
Downstream
(customer segments)
Key product categories
Support to sustainable
development goals
Copper
Copper
cathodes
KGHM Polska
Miedź S.A.
(Poland)
KGHM
INTERNATIONAL
LTD. - Carlota
(Arizona, USA)
London Metal Exchange
(LME), manufacturers of:
wire rod, other rods, flat
bars, pipes, sheets and
profiles
The basic product of KGHM Polska
Miedź S.A. are copper cathodes
made of electrolytic copper with a
minimum copper content of at least
99.99%. They meet the highest
quality requirements and are
registered as grade “A” on the
London Metal Exchange (LME).
Development of energy
infrastructure (RES) and
electromobility. Support for
reduction of carbon
footprint.
Copper wire
rod
KGHM Polska
Miedź S.A.
(Poland)
Industry: cable
manufacturing,
electromechanical, electrical
engineering
Production is mainly based on the
use of own cathodes manufactured
in the divisions of KGHM Polska
Miedź S.A. Copper wire rod is the
second copper product in terms of
the volume manufactured by KGHM
taking into consideration the volume
of production. The Cedynia Wire Rod
Plant produces copper wire rod in
five classes of quality, adjusted to
various needs of customers.
Copper
concentrate
KGHM
INTERNATIONAL
LTD - Robinson
(Nevada, USA)
Copper smelters, raw
material traders
Copper concentrate is a product of
the Robinson mine in the USA, part
of the KGHM INTERNATIONAL LTD.
Group, containing about 20% of
copper, as well as silver and gold.
Oxygen-free
copper rod
KGHM Polska
Miedź S.A.
(Poland)
Industry: cable industry for
the production of thin,
enamelled, and fire-resistant
cables as well as cables
transmitting sound and
images. Oxygen-free copper
rod is also an ideal material
for the process of extrusion
into flat profiles and for
processing through the
Conform® process. In
addition, oxygen-free, silver-
bearing rod is used in the
manufacture of trolleys and
commutators.
KGHM Polska Miedź S.A. The Cedynia
Wire Rod Plant Division produces
two types of rod using UPCAST®
technology: Cu-OFE oxygen-free rod
and CuAg (OF) oxygen-free, silver-
bearing rod. Depending on
customers’ demand, the rod is
produced in several diameters: 8
mm, 12.7 mm, 16 mm, 20 mm, 22
mm, 24 mm and 25 mm with
possible silver content.
ETP/OFE
nuggets
KGHM Polska
Miedź S.A.
(Poland)
Producers of alloy, also used
in electroplating processes
Copper grain is obtained from Cu
ETP1 wire rod (99.90% Cu) and Cu
OFE wire (99.99% Cu). Sample sizes
of grain produced by KGHM Polska
Miedź S.A.: diameter of 8 mm, 12.7
mm; length of 10-35 mm.
Silver
Silver
KGHM Polska
Miedź S.A.
(Poland)
Financial institutions,
industries: jewellery,
electronic and electric,
photovoltaic, catalyst
manufacturers as well as
coin, bar and medal
producers
Electrolytic silver is mainly produced
by KGHM Polska Miedź S.A. The
product has a form of bars (ingots)
and granules with a silver content of
99.99%. Silver bars with the weight of
approx. 32 kg have a certificate
registered on COMEX in New York
(New York Mercantile Exchange) as
well as a Good Delivery certificate
issued by the London Bullion Market
Association. Silver grains are packed
in bags of 25 kg or 500 kg weight.
Development of renewable
energy (photovoltaics) and
emission reduction through
catalytic converters.
Other product groups
165
Molybdenum
concentrate
KGHM
INTERNATIONAL
LTD - Robinson
(Nevada, USA)
Industry: metallurgical,
chemical, energy,
electronics, automotive,
catalyst manufacturers
Molybdenum concentrate is another
commercial product (apart from
copper concentrate) produced by the
Robinson mine in the USA, part of
the KGHM INTERNATIONAL LTD.
Group. Production of molybdenum
concentrate is derivative of the
process of copper concentrate
production.
Support of advanced
industries and responsible
management of raw
materials.
Gold
KGHM Polska
Miedź S.A.
(Poland)
Sector: jewellery, mints,
banks and electrical industry
Gold in the form of bars weighing
approx. 0.5 kg, 1 kg, 4 kg, 6 kg and 12
kg, containing 99.99% of gold.
No impact.
Polymetallic
ore
KGHM
INTERNATIONAL
LTD. - Sudbury
(Ontario, Canada)
The total ore extracted from
the mines is processed at
the Clarabelle plant in
Sudbury, owned by Vale
Ores containing copper, nickel and
TPM are produced by the mines in
the Sudbury Basin in Canada, part of
the KGHM INTERNATIONAL LTD.
Group.
Support of energy
transformation,
electromobility and low-
emission technologies.
Sulphuric
acid
KGHM Polska
Miedź S.A.
(Poland)
Industry: chemical, fertilizer,
petrochemical, metallurgical,
pharmaceutical, automotive
and energy
Sulphuric acid is produced at the
Legnica Copper Smelter and Refinery
(approx. 100 thousand tonnes per
year) and Głogów Copper Smelter
and Refinery (approx. 550 thousand
tonnes per year).
Sulphuric acid used at the Polkowice
unit of the Mine Concentrator
Division in the enrichment process as
a factor enabling decarburisation of
one of the process intermediates.
Promoting circular economy
by reusing the by-product of
metallurgical processes.
Refined lead
KGHM Polska
Miedź S.A.
(Poland)
Industry: batteries,
chemicals, metals,
construction, armaments,
electronics, automotive and
aerospace
Refined lead (approximately 30,000
tonnes per year) is produced at the
Legnica Copper Smelter and
Refinery. The lead produced meets
the requirements of the PN-EN
12659 standard.
Support for energy storage
systems.
Assessment of the Group’s current significant products or services and significant markets and customer groups
in relation to its sustainability goals
The KGHM Group focuses its activities on the production of copper and silver as key raw materials in the energy and digital
transformation processes. Contemporary technologies, such as renewable energy sources, electric vehicles or digital
infrastructure, require stable access to these metals. They are the cornerstone of global efforts aimed at reaching climate
neutrality.
It is therefore crucial for sustainability to find environmentally-friendly ways of producing these metals. To meet these
expectations, the Institute of Mineral Raw Materials and Energy Management of the Polish Academy of Sciences was
commissioned in 2021 to prepare an analysis of the environmental impact and carbon footprint of the main products
manufactured by KGHM Polska Miedź S.A.
The life cycle analysis was carried out in accordance with ISO 14040, ISO 14044, ISO 14067. In addition, environmental
declarations (type II - so-called self-declared environmental statements) were prepared for selected products in accordance
with PN-EN ISO 14021, which were independently verified - the certificates are valid until March 2026. The carbon footprint
of KGHM Polska Miedź S.A. products is lower than the market average, as shown for individual products in the table below.
Table 100. Key products of the KGHM Polska Miedź S.A. Group and their carbon footprint compared to industry averages
Product
Carbon footprint
of KGHM product
(data: 2020)
Average product carbon footprint
(data: 2019, unless otherwise indicated)
HMG 1 cathode
2 961 kg CO₂ eq/t
3 965 kg CO₂ eq/t (2023, ICA global average
54
)
HMG 2 cathode
2 149 kg CO₂ eq/t
3 965 kg CO₂ eq/t (2023, ICA global average)
HML cathode
1 552 kg CO₂ eq/t
3 965 kg CO₂ eq/t (2023, ICA global average)
54
Source: Copper Environmental Profile - International Copper Association
166
OFE rod
3 091 kg CO₂ eq/t
3 622 kg CO₂ eq/t (2024, ICA global average
55
)
Copper wire rod
2 288 kg CO₂ eq/t
3 622 kg CO₂ eq/t (2024, ICA global average)
CuAg rod
3 207 kg CO₂ eq/t
3 622 kg CO₂ eq/t (2024, ICA global average)
Silver
90 kg CO₂ eq/kg
448 kg CO₂ eq/kg
The analyses performed confirmed that KGHM's metallurgical plants (Legnica Copper Smelter and Refinery, Głogów Copper
Smelter and Refinery, Cedynia Wire Rod Plant) produce metals in a responsible manner and in accordance with the highest
standards (which is also confirmed by The Copper Mark certification for metallurgical plants in the KGHM Group).
Moreover, to meet market expectations, for two of KGHM's key products - wire rod and wire, type III Environmental Product
Declarations will be prepared in accordance with EN 15804+A2 in the first quarter of 2025. Type III environmental
declarations are international, independent and certified documents that provide transparent and reliable information
about the environmental impact of a product. They are based on the Life Cycle Assessment (LCA) which covers all stages of
a product's life from sourcing of raw materials, through production, use to disposal or recycling. Once verified and certified,
the declaration will be registered in the EPD system, enabling public access to the declaration and increasing its reliability.
The Group’s copper cathodes demonstrate low CO₂ emission indicators in the industry, e.g. HML cathodes achieved
emissions of 1.552 kg CO₂/t in 2020, well below the global average of 3.965 kg CO₂/t. Silver, another key product, also
stands out for its significantly reduced carbon footprint – 90 kg CO₂/kg in 2020 versus the global average of 448 kg CO₂/kg.
Such parameters enable the company to meet the rising demands of the technology and energy sectors, while reducing its
environmental impact.
KGHM operates in global markets. Almost a quarter of product sales reaches the domestic market, while the largest
customers in the export market include China, Germany and the United Kingdom (see more in the Consolidated Financial
Statements for 2024 in „Section 2 – Information on segments and revenues” and „Section 4 – Explanatory notes to the
statement of profit or loss”). KGHM also maintains its strong position in the European Union which is increasingly dependent
on imports of critical raw materials. KGHM's products support the EU's efforts aimed at reducing the risk of supply
disruptions and securing the stability of energy transition. The customer groups are specified in detail in Table 101.
Significant groups of products offered, markets operated and customer groups in the KGHM Polska Miedź S.A. Group.. ”
Limitations in value chain reporting
In accordance with the transitional provisions defined in ESRS 1 in section 10.2 “Transitional provision related to section 5,
Value Chain”, in the first years of reporting, entities may limit the scope of disclosures to internally available data and
publicly available information. Therefore, in this annual report, the KGHM Group presents information on the value chain
based on the data it holds, while the full report on the value chain will be prepared and presented in subsequent reporting
years.
Given the extent of the Group's activities - comprising more than 60 companies within the KGHM Polska Miedź S.A. Group,
employing in total over 35 thousand employees and conducting mining, production, service and sales support activities on
four continents - obtaining complete data on the value chain requires the implementation of consistent processes and
analytical tools. In the current year, the Group will take measures to obtain comprehensive upstream and downstream
information on the value chain, in line with the principle of due diligence. After the closure of the reporting period, it is
planned to set up a team responsible for developing procedures for data collection and cooperation with partners within
the Group. These measures will allow the Group's sustainability impact to be presented in more detail in future reports.
55
Source: Copper and Copper Alloy Semi-Fabricated Products LCA - International Copper Association
167
Description of the main characteristics of the upstream and downstream value chain and the position of companies in the value chain
Table 101. Position of companies and customer groups in the key value chain of the KGHM Polska Miedź S.A. Group
Upstream
(main raw materials,
products, services used
by the KGHM Group
companies)
KGHM Group entity and
region
Downstream
(products)
Downstream
(customers)
Downstream
(product use)
Downstream
(major categories of waste)
I. Exploration (exploration and evaluation)
Design of drilling wells,
drilling, sampling and
testing, storage of cores
Service providers
(geology, surveying,
design, engineering)
Installation services
Suppliers of energy
resources, water
Component suppliers
KGHM Cuprum sp. z o.o.
Research and Development
Centre (Poland)
CBJ sp. z o.o. (Poland)
PeBeKa S.A. (Poland)
Central Core Warehouse at
CBZ Mercus Logistyka sp. z
o.o. (Poland)
Cores, samples for deposit
exploration and evaluation.
Testing of mechanical and
deformation parameters
(strength tests, notifications).
KGHM Polska Miedź
S.A.
Core production business (CPB): Tests of KGHM
products - testing of copper samples.
Programming of mine operations and production
of CPB's own resources.
Outside the KGHM Group, i.e. outside CPB: tests
of water, food, etc. (e.g. for LGUs, micro-
enterprises or individuals).
Water consumption, scrubber, water with chemicals
(e.g. with acids).
Acid-related air emission.
Municipal waste.
Hazardous waste (associated with food testing
services, i.e. bio-waste or medical waste).
II. Ore mining and enrichment
Specialised heavy
equipment and its
servicing
Water, energy and fuels
Transport services
Service providers in the
scope of geology,
surveying, engineering,
equipment maintenance
and repair, rescue,
construction,
maintenance, safety
Suppliers of construction
raw materials, energy
commodities, equipment,
components, spare parts
Suppliers of technical
materials and
consumables
Polkowice-Sieroszowice
underground mine (Poland)
Rudna underground mine
(Poland)
Lubin underground mine
(Poland)
Carlota open pit mine - mining
region, desert and mountain
terrain (USA)
Robinson open pit mine - 3
large pits; currently in
operation: Ruth and Liberty,
plus Tripp-Veteran, where no
mining activity is currently
carried out (USA)
Sudbury underground mine
(Canada)
Concentrators - Lubin, Rudna,
Polkowice-Sieroszowice
regions (Poland)
Copper ore, polymetallic ore
containing mainly copper and
silver, copper concentrate,
molybdenum, nickel including
precious metals.
Metallurgical sector,
including KGHM’s
metallurgical plants
Description below.
Flotation tailings (the largest stream of waste; it is
non-hazardous waste).
The supernatant water collected at the Żelazny Most
Tailings Storage Facility is returned to the
Concentrators and used in the flotation process, while
the excess water is discharged into the Oder river.
168
Upstream
(main raw materials,
products, services used
by the KGHM Group
companies)
KGHM Group entity and
region
Downstream
(products)
Downstream
(customers)
Downstream
(product use)
Downstream
(major categories of waste)
III. Smelting and refining, processing
Predominantly own
copper concentrates
(mined by other KGHM
Group entities)
Copper scrap
Electricity
Water
Suppliers of process raw
materials - chemicals,
technical materials and
consumables, energy
commodities
Providers of
technological, analytical,
engineering services
related to security and
production continuity
Głogów Copper Smelter and
Refinery (Poland)
Legnica Copper Smelter and
Refinery (Poland)
Cedynia Wire Rod Plant
(Poland)
In addition to copper, silver
and gold, KGHM smelters
produce, among others, raw
lead, refined lead, sulphuric
acid, nickel sulphate, selenium
Technical sulphuric acid is
produced as a result of the
smelter gas desulphurisation
process in Głogów Copper
Smelter and Refinery I and II
and Legnica Copper Smelter
and Refinery.
Business customers
Intermediaries
Wholesalers
Distributors
Copper cathodes: production of semi-finished
copper products such as wire rod, wire, ingots,
pipes, sheets and profiles, and copper alloys.
Copper rod: for the construction of conductive
conductors in electrical cables and wires (e.g.
enamelled cables, car cables, power cords, etc.)
Sulphuric acid: mineral fertiliser industry,
synthetic fibre industry, hydrometallurgical
processes, production of dyes, water
conditioners, cellulose, batteries, etc.
Refined lead: manufacture of batteries and lead
oxides.
Copper sulphate: flotation of zinc ores,
production of fertilisers and other chemicals and
compounds.
Selenium: used in glass, feed, pharmaceutical
and cosmetic industry.
Molybdenum: used in the aerospace, defence,
oil, nuclear and electronics industry.
The stage of the core production business generating
the second largest group of waste in the KGHM Group
is the pyrometallurgical process, which produces a
large amount of smelter slag.
Dust and sludge from flue gas dust removal.
IV. Sales
Products and services of
KGHM Polska Miedź S.A.
Group’s companies.
Head Office of KGHM Polska
Miedź S.A.
KGHM INTERNATIONAL LTD.
KGHM Shanghai Copper
Trading Co., Ltd.
Other KGHM Group companies
Products and services of
KGHM Polska Miedź S.A.
Group companies.
Business customers
Intermediaries
Wholesalers
Distributors
Mining sector, including
KGHM Group’s
companies
See above.
Recycling: Copper is one of few materials that can be
recycled multiple times without losing its properties.
V. Activities supporting mining and/or metallurgical processes - key companies
169
Upstream
(main raw materials,
products, services used
by the KGHM Group
companies)
KGHM Group entity and
region
Downstream
(products)
Downstream
(customers)
Downstream
(product use)
Downstream
(major categories of waste)
Steel, plastics and
machine components,
raw materials used in
refurbishment and
construction (including
but not limited to
concrete)
Fuels, electricity
KGHM ZANAM S.A.
(Poland)
Machinery and equipment for
the mining sector. Equipment
used in transhipment
systems, transport teams,
quarrying and open-pit
mining. Steel and iron
castings.
Maintenance and repairs,
transport and shipping and
specialised services at
underground mining sites.
Mining sector, KGHM
Group companies
Mining sector processes.
Raw materials used in
construction (including
but not limited to
concrete)
Fuels and electricity
PeBeKa S.A.
(Poland)
Mining construction
(construction of shafts and
drifts), construction of
roadway/railway tunnels;
specialist construction, drilling
services
(geological/exploration
drilling).
Mining sector, KGHM
Group companies
Mining sector processes.
Mining waste, construction waste such as rubble, soil
and earth waste, drilling mud (smaller quantities: iron
and steel).
Scrap
Industrial waste
Chemical reagents
Shaft slag
Electricity
KGHM Metraco S.A.
(Poland)
Trade and processing of non-
ferrous metals scrap; rhenium
recovery from acidic industrial
waste; processing of shaft
slag into road-building
material and sale; trading in
salt; recovery of copper and
silver from smelter tiles;
trading in chemical factors.
Mining sector, KGHM
Group companies,
customers outside the
KGHM Group’s core
business (salt and
aggregates used in
road construction)
Mining sector processes.
Storage and logistics services (sulphuric acid
terminal in Szczecin).
*CE - product-waste penetration
Rhenium from acid industrial waste, aggregates - slag
pits (from the production line), salt in side activities,
copper-plated lining.
Rolling stock vehicles
(locomotives, wagons)
and rolling stock
maintenance equipment
Electricity, fuels
POL-MIEDŹ TRANS sp. z o.o.
(Poland)
Railway cargo transport
Mining sector, KGHM
Group’s companies,
their suppliers and
customers
Mining and metallurgical sector processes.
Steel and iron scrap.
Oily rags, waste oil.
VI. Power industry
Hard coal
Natural gas
Other fuels
Water
Wojewódzkie
Przedsiębiorstwo Energetyki
Cieplnej w Legnicy S.A. (WPEC
Legnica)
(Poland)
Production, transmission,
distribution and trading in
heat. The network operated
by the company includes the
district heating systems of the
following cities: Legnica,
7 Lower Silesian cities -
industrial and
municipal customers in
the region
Heat used by consumers.
Furnace waste resulting from the generation of heat
using non-renewable raw materials (slags).
170
Upstream
(main raw materials,
products, services used
by the KGHM Group
companies)
KGHM Group entity and
region
Downstream
(products)
Downstream
(customers)
Downstream
(product use)
Downstream
(major categories of waste)
Lubin, Głogów, Złotoryja,
Chojnów, Chocianów and
Ścinawa.
“Energetyka” sp. z o.o.
(Poland)
Generation, transmission and
distribution of electrical and
heating energy; water-
effluents management; trade
in oil-based products.
Lubin - industrial
customers (including
KGHM Polska Miedź
S.A.) and municipal
customers in the
region.
KGHM Polska Miedź
S.A., WPEC in Legnica
S.A., Group’s companies
Energy, heat and water used by their consumers.
Wastewater treatment service.
Sludge from "Energetyka" sp. z o.o. wastewater
treatment plant (the third largest waste stream
related to the activities of KGHM Polska Miedź S.A.)
Furnace waste resulting from the generation of energy
from non-renewable raw materials (slags).
VII. Other services (not related to the core business of the KGHM Group) provided to entities outside the Group, institutional and individual clients (health services, catering and accommodation services)
Equipment and
substances (e.g. gases for
acid and carbon bath, raw
materials for mud bath,
etc.) for the provision of
spa services and cleaning
products
Renovation services
necessary for the
maintenance of spa
equipment and buildings
Food products
Electricity, water
Wellness and
rehabilitation services
Packaging of
"Staroplanka” mineral
water (glass and plastic
bottles)
Polska Grupa Uzdrowisk
(Polish Spa Group - PGU)
(Uzdrowiska Kłodzkie,
Uzdrowisko Połczyn,
Uzdrowisko Świeradów,
Uzdrowisko Cielice)
(Poland)
Medical services - sanatorium
treatments
(in total, more than 3,500
beds are available to PGU
guests in over 40 facilities).
“Staropolanka” bottled
mineral water produced in
Polanica Zdrój (Uzdrowiska
Kłodzkie)
National Health Fund
(NFZ) and patients
referred under the NFZ
to spas
Individual commercial
patients, external
companies (organised
stays)
Medical services provided in spas and sanatoria.
Hotel industry.
Bottled mineral water.
Municipal, post-consumer and food waste.
Treatment mud.
Medical waste.
Post-production waste.
Food products, cleaning
products, water,
electricity, fuels.
PHU “Lubinpex” sp. z o.o.
(Poland)
Restaurant and catering
services (4 restaurants, 35
catering establishments),
hotel services (2 hotels)
Institutional - KGHM
service, individual/retail
customers
Restaurant and catering services.
Municipal, post-consumer and food waste.
171
Upstream
(main raw materials,
products, services used
by the KGHM Group
companies)
KGHM Group entity and
region
Downstream
(products)
Downstream
(customers)
Downstream
(product use)
Downstream
(major categories of waste)
Medical products and
reagents, drugs and
medical equipment.
Professional cleaning
products.
Electricity, water
„MIEDZIOWE CENTRUM
ZDROWIA” S.A.(“MCZ” S.A.)
(Poland)
The core business of “MCZ”
S.A. is healthcare. The services
include medical services
provided at the multispecialist
Hospital of "MCZ" S.A. in
Lubin and at the Outpatient
Clinics and Facilities of "MCZ"
S.A. in Lubin, Legnica, Głogów
and Grębocice.
Patients within the
performance of
contracts concluded
with: NFZ (National
Health Fund - universal
health insurance), MZ
(Ministry of Health -
drug and prevention
programs ), business
entities (occupational
medicine), KGHM
Group’s companies
(subscription for
medical care),
individuals (commercial
services)
Medical services in the scope of hospital
treatment, specialist outpatient treatment,
primary healthcare, occupational medicine,
medical rehabilitation, imaging diagnostics,
laboratory diagnostics.
Municipal waste, medical waste, including hazardous
waste.
Breakdown of total revenues by significant ESRS sectors
In accordance with the footnote to the ESRS 2 SBM-1 disclosure requirement, the entity shall report the information set
out in ESRS 2 SBM-1 paragraph 40(b) (breakdown of total revenues by significant ESRS sectors) and 40(c) (list of additional
significant ESRS sectors) as from the date of application specified in the Commission delegated act to be adopted pursuant
to Article 29b(1), paragraph 3(ii) of Directive 2013/34/EU (as amended). The referenced article provides that by 30 June
2026, the European Commission will determine "the information to be reported by entities relating to the sector in which
they operate."
Breakdown of total revenues from selected sectors
The KGHM Polska Miedź S.A. Group does not operate and does not earn revenues from fossil fuels (coal, oil and gas), the
production of chemicals, controversial weapons (anti-personnel mines, cluster munitions, chemical and biological
weapons) or the cultivation or production of tobacco.
Obtaining performance in terms of current and expected benefits for customers, investors and other
stakeholders
The financial results of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group in accordance with the product
and geographical segmentation are presented in "Part 2 – Operating segments and revenue information" and "Part 4 –
Explanatory notes to the income statement" of the Consolidated Financial Statements for 2024.
Table 102. Current and expected benefits for key stakeholder groups
Clients
− Providing high quality products - products such as copper cathodes, electrolytic silver and oxygen-free copper
rod meet the highest quality standards (e.g. LME and Good Delivery certificates) and are manufactured in a
responsible manner, as confirmed by The Copper Mark certificates for the metallurgical plants of KGHM Polska
Miedź S.A.
− Clients in industrial sectors such as energy, electrical machinery or jewellery gain access to reliable and durable
materials, while being assured of a product made with respect for human rights and the environment.
− Supporting innovation and technology - materials used in photovoltaics, catalysts or advanced cable systems
enable clients to develop sustainable technologies.
Investors
− Increase in company value - regular growth of yield from core products such as copper cathodes, wire rod and
silver in ingots translates into stable revenue and increases investor sentiment.
− Dividend.
− Transparency and responsibility - ESRS-compliant reporting provides investors with full transparency on the
company's financial, environmental and social performance.
− Sustainability as a cornerstone of the strategy - investment in a circular economy, reduction of GHG emissions,
protection of biodiversity reduce investment risks associated with environmental regulations.
Local
communities
− Creation of jobs in the regions of operation, particularly in the Copper Basin, Sudbury Basin and White Pine
County, Nevada, affects the development of local economies.
− CSR projects supporting education, health and social infrastructure benefiting communities around KGHM's
plants.
− Impact on local budgets: local governments and territories and provinces as well as counties.
Suppliers
− Partnership, especially with local suppliers, supports the development of regional businesses and also promote
market stability. It enables joint implementation of sustainable practices, raising environmental and ethical
standards and creating added value for both parties.
Regulators and
environmental
organisations
− The application of best environmental practices, such as water management or reduction of CO₂ emissions,
contributed to (emission reduction - BATAs program) and contributes to the achievement of sustainable
development goals and climate policy assumptions of KGHM Polska Miedź S.A.
In 2025, the Company will carry out work related to operationalisation of the Strategy, whereby a comprehensive
Sustainable Development Policy for the KGHM Group will be prepared on the basis of the identified strategic directions
and ESG priorities. The policy will define specific strategic objectives and metrics to support responsible development and
long-term stakeholder value.
173
Chart 36. Average employment in the KGHM Polska Miedź S.A. Group by geographical location
[SBM-2] Interests and views of stakeholders
The KGHM Group is a global entity with a significant role in the national economy maintaining strong links with local
communities. As a company listed on the Warsaw Stock Exchange, it actively engages in communication with
stakeholders, both domestic and international, ensuring their access to reliable and transparent information.
Trust and mutual understanding are the cornerstones of the Group's relationship with its stakeholders, which are crucial
to the success of the organisation. The activities of the KGHM Group have a significant impact on the economic, social
and environmental environment, which requires responsibility and transparency. Cooperation with stakeholders is
integral to the long-term Group's Strategy while open dialogue allows for better understanding of mutual expectations.
Key stakeholders are parties who have influence on the entity or who can be affected by the entity. According to the ESRS
definition, stakeholders are divided into two main groups:
− Stakeholders affected by the entity: persons or groups whose interests are affected or likely to be affected, positively
or negatively, by the entity's actions and its direct and indirect business relationships throughout its value chain.
− Users of sustainability statements: primary users of financial reporting for general purposes, such as investors,
lenders, asset managers, insurance companies, as well as other users including business partners, trade unions, social
partners, NGOs, governments, analysts and scientists.
Some stakeholders may belong to both groups.
The stakeholder mapping process of the KGHM Polska Miedź S.A. Group has been carried out for many years and includes
two levels: Head Office and subsidiaries. At the level of subsidiaries, both domestic and international, stakeholder groups
are identified including an assessment. The process involves assessing two key parameters for each group of
stakeholders:
− Strength of impact - impact of a particular stakeholder group on the KGHM Group in terms of environmental, social
and corporate governance issues
− Level of interest - interest of a particular stakeholder group in activities of the KGHM Group in terms of environmental,
social and corporate governance issues
Both parameters are rated on a scale from 1 to 5, where 5 indicates the highest strength of impact or level of interest.
Based on such assessment, stakeholders are divided into two categories: key stakeholders and other stakeholders.
The next step in the mapping process is the verification performed at the Head Office level, using experience and
expertise. The aim is to determine whether a particular stakeholder group is relevant from the perspective of the entire
Group or only at the level of the specific subsidiary.
In 2024, the KGHM Group Stakeholder Map included 18 stakeholder groups, of which 10 were key groups and 8 were
categorised as other groups. The stakeholder map is updated on an annual basis.
The table below presents the key stakeholders.
Poland; 31 607
USA; 751
Canada; 924
Chile; 2 138
Other; 13
174
Table 103. Map of Key Stakeholders of the KGHM Polska Miedź S.A. Group in 2024
Stakeholder type
Specification
Employees, including trade union
members
Including former and potential employees.
Representatives of local and
national government
Local governments of the municipalities where the company operates; State Treasury.
Local community members
Social groups other than non-governmental organizations, or e.g. social assistance centres
Suppliers
Suppliers of the entire value chain, including JV partners cooperating with KGHM
Clients
Domestic and international.
Regulators
Including, among others, the legislator, the judiciary, standardization/metrological units
Stock exchange environment
Shareholders, bondholders, rating agencies.
Supervisory authorities
E.g. Polish Financial Supervision Authority, State Labour Inspectorate, certification bodies,
industry authorisation bodies (e.g. District Sanitary and Epidemiological Station, District
Veterinary Institute - State Research Institute).
Exchanges in Warsaw and London
London Metal Exchange and Warsaw Stock Exchange
Financial markets
Among others, lending banks, institutions involved in factoring, and insurance companies.
The KGHM Polska Miedź S.A. Group uses various communication channels which are adapted to the specific nature and
individual needs of particular stakeholder groups. Such a diversified communication model aims to build relationships
effectively based on trust and cooperation.
The table below provides examples of the forms of communication with key stakeholder groups used in the KGHM Group.
Moreover, each of these groups was invited to participate in the dialogue during the double materiality assessment
process. This offered stakeholders the opportunity to express their opinions and expectations on key issues.
Table 104. Channels of communication with selected key stakeholders
Stakeholder
group
Approach to dialogue
Goal
Main communication channels
Employees,
including trade
union members
− permanent open
communication
between employees
and the employer
− dialogue with trade
unions
− increasing employee
engagement
− building understanding of the
implementation of the strategy
and strategic objectives
− dialogue in the scope of working
conditions
− preparation and adaptation to
changes and crisis situations
− raising awareness and engaging
in initiatives in the scope of ESG
issues
− maintaining transparency in the
scope of decisions related to the
company business
− activating employees to
participate in new initiatives
− promotion of best practice
− meetings and consultations with employee
representatives regarding important decisions
or events
− the Intranet, internal publications and
television, newsletters, electronic
communication
− company events, competitions, employee
volunteering, training, engagement research
− publications in local and national media
regarding activities and projects implemented
by the Company
− engagement survey
− internal team meetings
− inviting trade unions to participate in
consultation processes and arrangements
− whistleblowing system
Owners, KGHM
Group
− corporate governance
over subsidiaries
− appointed
coordinators in
subsidiaries
− effective cooperation with
subsidiaries from the KGHM
Group
− exchange of experience, meetings, reports
− participation of representatives of KGHM
Polska Miedź S.A. in the supervisory boards of
the KGHM Group entities
− consistent approach to the management
standards in key areas of the KGHM Group’s
operations
− cooperation on the basis of adopted policies
Representatives
of local and
national
administration,
Regulators,
Supervisory
authorities
− cooperation in the
framework of debates
and conferences;
− ongoing dialogue and
incorporation of
recommendations;
− ensuring compliance with the
requirements and regulations
− supporting the development of
best market practice
− ensuring the fulfilment of
regulatory and supervisory
requirements
− co-shaping the regulatory
environment
− Identification of actual and
potential impacts resulting from
− meetings and consultations
− traditional correspondence and e-mail
− the Internet
175
the implementation of new
regulations, including legislation
and recommendations, both at a
level of European Union and
national legislation
Members of
local
community
− ongoing direct
communication
− employee
volunteering
− development support
− for local communities
− encouraging employees to
participate in social and
environmental actions
− employee volunteering
− supporting the development of
local communities,
− publications in local and social media,
− the naMiedzi mobile phone app,
− meetings, conferences and seminars, events
(sports, cultural) sponsored by KGHM
− CSR programs , e.g. Eco-Health
− participation of KGHM representatives in
events and ceremonies organized in the
municipalities and districts of the Copper
Basin
KGHM's stock
market
environment,
Markets in
Warsaw and
London,
Financial
markets
− permanent bilateral
communication
− between the
management board
of the company
− and capital market
participants
− based on best
practice
− building investor sentiment
− transparency of action
− equal access to information that
affects investment decisions
− activation of shareholders to
participate in making
− key decisions
− Communicating information on
the business model, strategy and
value creation of the KGHM
Group
− activation of shareholders to
participate in making key
decisions
− increase in the KGHM Group’s
capitalisation
− Informing on the dividend policy
and profit distribution plans
− General Meetings of Shareholders,
− regulatory filings and periodic reports,
newsletter,
− conferences, including international, meetings
and study visits (Investor Days, Analyst Days),
cyclical results conferences
− e-mail correspondence, telephone contact,
investor chats,
− Internet and social media (LinkedIn),
information posted on www.kghm.com
Suppliers
− ongoing cooperation
− transparent rules for selecting
and cooperating with suppliers
− shaping business and ethical
standards
− ensuring timely delivery
− quality monitoring and
assessment
− improving the quality of the
supply of goods and services
− increasing the knowledge of
suppliers about the needs of the
KGHM Group
− Increased awareness of ESG
issues and
− integrating ESG rules into
business and procurement
processes
− current and periodic meetings and
negotiations with new and existing suppliers;
− direct communication with suppliers on
relevant cooperation issues
− on-line meetings, video conferences, e-mail
− procurement management platforms
Clients
− constant and open
communication with
customers
− quality and
adjustment
− of products and
services
−
− creation of transparent terms
and conditions of offers and
contracts
− awareness of customer needs
and expectations
− building trust and loyalty
− communicating new products
and services
− awareness of customer needs
and expectations
− building trust and loyalty
− collecting feedback
− customising the offer
− satisfaction monitoring
− conferences and trade fairs
− meetings, traditional and electronic
correspondence
− corporate website www.kghm.com
− social media
The Company understands the interests and opinions of key stakeholders through systematic dialogue and analysis of
their expectations in relation to the strategy and business model. This process is carried out as part of the company's due
176
diligence and materiality assessment, which allows these aspects to be effectively taken into account in decision-making
processes.
− Integration of results in the strategy - The collected feedback and interests of stakeholders are analysed and taken
into account in decision-making processes, especially in the areas of sustainability strategy, environmental protection
and community relations.
− Prioritisation - The results of the consultation help to identify the most significant topics, which are then included in
the reports.
− Shaping operational measures - Based on the feedback collected, remedying, adaptive or proactive measures are
taken, such as modifying CSR programs , investing in local infrastructure or changing environmental policies.
− Feedback communication - Results included in the measures are communicated to stakeholders to maintain
transparency and confidence in the relationships.
Means of informing the administrative, management and supervisory bodies of the opinions and interests of
stakeholders
In the KGHM Polska Miedź S.A. Group, the Management Board and top management is regularly informed about the
most relevant opinions and interests of key stakeholders in the context of sustainability impacts. This process takes place
through several key communication channels, including:
− Periodic reports and regulatory findings
− Meetings and consultations with stakeholders
− Conferences and trade fairs
− Traditional and electronic correspondence
− Videoconferences
− Participation in events and celebrations
In addition, in 2024, the Management Board and the top management received a dedicated Stakeholder Outlook Survey
Report at the final stage of the double materiality assessment. This report contained all the key findings of the survey and
interviews, as well as detailed information on the assessment of the company's activities in terms of its contribution to
sustainability. The report also identifies priorities in the environmental and social area.
Members of the Supervisory Board are regularly informed on the progress in the scope of implementation of key impacts
affecting the KGHM Group’s business. Such information is provided in the form of reports and analyses, which are
discussed at meetings of the Supervisory Board and the Audit Committee of the Supervisory Board. These reports take
into account the current needs of stakeholders and changing regulatory and legal requirements.
177
[SBM-3] Significant impacts, risks and opportunities and their links with the strategy and business model
Table 105. List of material impacts, risks and opportunities considered by the administrative and governing bodies in 2024
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
ESRS E1 - Climate change
Adapting to climate change
Impacts
Positive Actual Production of key metals for a low-carbon economy and technological transformation
Support for the adaptation of economic sectors working towards transformation and low-emissions goals, indirectly leads to mitigation of their effects on climate
change as well as supports the energy transition. At the same time, the Group’s efforts to increase production of these metals responds to growing market expectations
associated with the transition to sustainable development.
Risks
Violent physical climate risk
Associated with the occurrence of severe weather events resulting from climate change.
Chronic physical climate risk
Related to the occurrence of permanent changes in weather patterns as a result of climate change
Opportu
nities
Development of new technologies in the field of mining, energy, automation
The implementation of new technologies and solutions to improve the efficiency of construction and the efficiency of operation of the facilities under construction
(better use of resources, automation of processes, reduction of workers' exposure to onerous working conditions in the mine) can help avoid possible additional costs
resulting from new emissions regulations.
Availability of external funding sources
Grants or loans for climate change adaptation measures (e.g. energy transformation) can provide support in ensuring financial stability as well as optimise and diversify
the Company's sources of funding.
Adapting to climate change
/ Mitigating climate change
Impacts
-
Risks
Regulatory climate risk
Regulatory risk related to changes in legal requirements concerning climate change and adaptation to its effects.
Technological climate risk
Technological risk related to the technological progress towards a low-emission economy.
Reputation climate risk
Reputation risks related to the perception of customers and other stakeholders as a result of climate change.
Market climate risk
Market risk associated with changes in demand for and supply of certain products and services of the Company.
Opportu
nities
Extension of the value chain
The construction of a new process line (extending the product range and increasing production capacity) and a facility to melt copper scrap (CE; lowering the
environmental footprint of the product) can contribute to an increase in the company's revenues, an improvement in the margin of copper sales, a reduction in the unit
cost of production due to economies of scale and greater energy efficiency of the new facilities, as well as diversification and a reduction in the cost of production inputs
through the expansion of processed production based on copper scrap.
Raw material diversification of development areas
The gradual development towards the exploration of deposits not directly related to copper, but used in electromobility, may in the long term contribute to an increase
in sales revenue, especially if the decision is made to diversify raw materials towards metals necessary for the production of components for electric vehicles.
Climate change mitigation
Impacts
Negative Actual Direct emissions of greenhouse gases (Scope 1)
KGHM Polska Miedź S.A. generates considerable Scope 1 greenhouse gas emissions, mainly due to the activities of the parent entityand its subsidiaries (mining and
smelting). The other companies in the group demonstrate lower emissions compared to the parent entity.
Negative Actual Indirect emissions of greenhouse gases (Scope 2) as a result of purchasing electricity from third parties where the energy mix is largely
based on fossil fuels such as coal, lignite and natural gas
Electricity produced from fossil fuels, such as coal (hard coal and lignite) and natural gas, is one of the main sources of greenhouse gas emissions, including carbon
dioxide (CO₂). The use of such energy sources by external suppliers contributes to an increase in overall CO₂ emissions, which can significantly affect the Group's
carbon footprint.
178
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Negative Actual Indirect emissions of greenhouse gases (Scope 3) related to the purchase of raw materials and fuels from external suppliers
Purchase of raw materials from external suppliers using carbon-intensive production technologies and fossil fuels, such as coal, natural gas or oil, contributes
significantly to the carbon footprint of a company's value chain.
Risks
-
Opportu
nities
Increasing the organisation’s competitiveness by reducing indirect CO2 emissions
Reorganisation of the model for meeting energy needs, assuming that by 2030, 50% of procured electricity capacity will originate from own low- and zero-carbon
sources, could reduce the amount of CO₂ emission allowances and guarantees of origin purchased, and reduce the cost of electricity through a more favourable price
from its own generation assets.
“Green copper”, “green concentrate”
The development of a concept and separation of part of the Company's copper product range with a reduced carbon footprint, as well as securing recycled concentrate
for direct use in the wire rod and wire plant, could contribute to the retention and acquisition of customers and associated sales revenue and the realisation of
additional margin from recycled copper.
Energy
Impacts
Negative Actual Consumption of large quantities of energy from non-renewable fossil sources
The Group consumes significant amounts of energy from non-renewable fossil sources.
Risks
Risk of increase in the costs of KGHM Polska Miedź S.A. as a result of further increases in the prices of energy carriers
Risk of lack of access to required energy utilities
Opportu
nities
Opportunity to increase the use of electricity and heat from own low- and zero-carbon energy sources
The construction of high-efficiency co-generation sources of electricity and heat/cooling using RES and low-carbon fuels (biomethane, hydrogen, syngas, etc.) can
contribute to savings through self-generation of electricity, including the reduction or elimination of distribution costs, as well as cost reductions through the production
of heat and cooling in their own installations and a reduction in CO₂ emissions and expenditure on the purchase of emission allowances.
Taking advantage of the forms of funding offered by funds, banks, and other financing institutions for energy transition, decarbonisation, energy efficiency
improvement projects.
Utilising the available forms of funding for energy transformation, decarbonisation and energy efficiency improvement projects by analysing initiatives and programs
for external funding opportunities, reviewing and revising project assumptions, with the active involvement of all the Company's organisational units, can make it
possible to obtain low-interest loans and a financial return at a certain CAPEX level.
ESRS E2 - Pollution
Air pollution
Impacts
Negative Actual Air emissions of dust and gases
The Group's operations involve emissions of pollutants into the air, including dusts (containing metals) and gases.
Risks
Risk of non-compliance with air quality standards (including arsenic)
Opportu
nities
-
Soil contamination
Impacts
Negative Actual Soil contamination resulting from breakdowns
Failure of a transmission pipeline could lead to the leakage of chemicals or other materials transported through the pipeline, resulting in soil contamination. Such
contamination can adversely affect local ecosystems and require intervention in the form of and corrective and remediation measures. KGHM Polska Miedź S.A. has
remediation plans in place for areas where historical contamination occurs.
Risks
-
Opportu
nities
-
Water pollution /
Soil pollution
Impacts
Negative Potential No possibility of further storage of waste and damage to the protective layers of landfills
Potential damage to the protective and insulating layers of landfills, including landfills next to the metallurgical plants. Secondary emissions of heavy metals into human
environment.
Risks
-
179
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Opportu
nities
-
Water discharges
Impacts
Negative Actual Discharges of industrial effluents from the hydrotechnical management of mine-technological water from the Żelazny Most Tailings Storage
Facility and from technological water circulation
The discharge of industrial effluents from the hydrotechnical management of mine-technological water from the Żelazny Most Tailings Storage Facility and from
technological water circulation, is carried out in accordance with the restrictive permits in force. An uncontrolled discharge could affect the river's chemical composition.
Negative Actual Exceeded nitrite nitrogen limit values in water discharges
The discharge of industrial effluents from the hydrotechnical management of mine-technological water from the Żelazny Most Tailings Storage Facility and from
technological water circulation is carried out in accordance with the permits in force, but in one of the measurements (in the summer period) exceeded nitrite nitrogen
limits were recorded.
Negative Actual Discharge of treated metallurgical effluent
In the Głogów Copper Smelter and Refinery, metallurgical effluent is treated and discharged into the Odra river, while in the Legnica Copper Smelter and Refinery,
effluent is discharged into the Kaczawa river basin. Despite the potential risks associated with such discharge, no abnormal situations have been recorded in
measurements to date.
Risks
-
Opportu
nities
-
Water pollution / Soil
pollution / Contamination
of living organisms and
food resources
Impacts
-
Risks
Risk associated with the ability to store, discharge, sell or manage waste
Risk of environmentally hazardous spills (KGHM INTERNATIONAL LTD.)
Opportu
nities
-
Potentially hazardous
substances / substances of
very high concern
Impacts
Negative Actual Use / generation of hazardous substances
KGHM Polska Miedź S.A.'s production process uses copper concentrates and auxiliary substances that may exhibit potential hazardous properties in accordance with
the ESRS definition. Substances recognised as SVHCs (Substances of Very High Concern) which pose a particular risk are also used in the production process.
Negative Potential Environmental contamination by hazardous or potentially hazardous substances
The Group uses hazardous substances. In the event of a potential failure, there is a risk of environmental contamination, as well as of potential contamination as a
result of poor waste management by recipients.
Positive Potential Use of industrial dusts to produce refined lead
Metallic lead is a product obtained from the management of industrial dusts. Copper production is accompanied by the generation of dust, from which lead is
recovered.
Risks
-
Opportu
nities
-
Other
Impacts
Negative Potential Negative environmental impact on the supply chain resulting from significant pollution generated by suppliers
The extent and diversity of entities in the Group's supply chain is associated with the risk of substantial pollution generated by suppliers, which could negatively impact
the environment. The potential impact depends on the sector cooperating with mining and metallurgy, the location and the environmental practices of individual
entites in the supply chain
Risks
-
180
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Opportu
nities
-
ESRS E3 – Water and marine resources
Water consumption
Impacts
Negative Potential Water consumption in production processes
The Company uses large volumes of water in its production processes (mostly mine water) for process purposes.
Risks
Risk of inability to manage increased mine water inflows
Risk of interruption in the supply of key utilities - industrial water
Opportu
nities
-
Water intake
Impacts
Negative Potential Water needed for technological purposes (floatation, hydrotransport) comes from mine dewatering – this is more than 50% of water intake
Risks
Risk of inability to manage increased mine water inflows
Risk of interruption in the supply of key utilities - industrial water
Opportu
nities
-
Water discharges
Impacts
Negative Potential Discharges of industrial effluents from the hydrotechnical management of mine-technological water from the Żelazny Most Tailings
Storage Facility and from technological water circulation
The company discharges industrial effluents from the hydrotechnical management of mine-technological water from the Żelazny Most Tailings Storage Facility and from
technological water circulation. Failure to comply with the provisions of the permit could entail negative consequences.
Risks
-
Opportu
nities
-
ESRS E4 - Biodiversity and ecosystems
Direct factors of impact on
biodiversity loss
Impacts
Negative Actual Impact of mining on flora and fauna and animal habitats
Negative Potential Impact of water discharges from mine dewatering on surface ecosystems
The company discharges industrial effluents from the hydrotechnical management of mine-technological water from the Żelazny Most Tailings Storage Facility and from
technological water circulation. Failure to comply with the provisions of the permit could entail negative consequences.
Negative Potential Other types of pollution (e.g. air, soil) impairing the condition or resulting in loss of species/ecosystems
Emissions to the air or soli related to breakdowns can have a significant impact on the condition of species and ecosystems. Their presence can lead to biodiversity
impairment and loss of habitats. These pollutants can also result in long-term difficulties in restoring biodiversity.
Risks
Risk of inability to manage increased mine water inflows
Opportu
nities
-
Impact on the extent and
condition of ecosystems
Impacts
Negative Actual Land development, including clearing and land conversion
Tree felling, development of land for new facilities or storage of materials (e.g. waste rock) can lead to changes in the structure of ecosystems. These activities involve
the loss of vegetation, changes of animal habitats and affect biodiversity in the area.
Positive Actual Protecting biodiversity in the areas of operation of the Company
181
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
KGHM Polska Miedź S.A. carries out a number of initiatives and projects aimed at protecting biodiversity, both in the areas where mining and metallurgical activities are
carried out and outside them. The Company takes measures to support the conservation and restoration of biodiversity in its areas.
Risks
Risk of inability to manage increased mine water inflows
Opportu
nities
-
Direct drivers of
biodiversity loss / Impact
on the extent and condition
of ecosystems
Impacts
Negative Potential Supply chain impact on biodiversity and ecosystems
Some raw materials and products are sourced internally, supplied by Group companies. However, the purchase of raw materials and semi-finished products from
external suppliers may involve negative impacts on biodiversity and ecosystems.
Risks
Risk of inability to manage increased mine water inflows
Opportu
nities
-
Impact on the condition of
species
Impacts
Negative Potential Impact of suppliers and customers on biodiversity
Suppliers and customers can contribute to changes in populations of valuable natural species - both through the supply of raw materials and the demand for products
whose production may have an impact on the environment.
Risks
Risk of inability to manage increased mine water inflows
Opportu
nities
-
ESRS E5 – Utilisation of resources and the circular economy
Resources introduced,
including the use of
resources
Impacts
Negative Actual Use of fossil and non-renewable raw materials
The Group's business model is mostly based on the use of fossil raw materials such as copper, silver, molybdenum, nickel, gold, platinum or palladium. The use of these
raw materials is associated with serious environmental impact that may be difficult or even impossible to reverse.
Positive Potential Increasing efficiency in the use of non-renewable raw materials
Due to its heavy reliance on non-renewable raw materials, the Group has significant potential to improve the efficiency of their use. The optimisation of mining and
processing processes, as well as the development of material recycling and reuse technologies can significantly contribute to reducing environmental impact.
Risks
-
Opportu
nities
Use of process water in core business processes
Urban Mining
The fulfilment of customers' expectations regarding the share of recycling in final products may contribute to increasing or maintaining sales margins, lowering the cost
of production inputs at the Cedynia Wire Rod Plant and increasing the scale of copper production, thus supporting the development of the Company's business.
Discharged resources
related to products and
services
Impacts
-
Risks
Risk associated with the ability to store, discharge, sell or manage waste
Opportu
nities
-
Waste
Impacts
Negative Actual Generation of non-recyclable waste and other recovery processes
The Group generates certain quantities of waste that is not recyclable or reusable as part of the circular economy. Waste such as certain industrial waste, chemical
waste and process waste can create waste management challenges.
Positive Actual Optimisation of waste management in accordance with the waste handling hierarchy
The Group implements solutions to recover valuable materials from waste, supports the implementation of innovative recycling technologies and cooperates with
entities that process waste into secondary raw materials.
Positive Actual Copper Recycling - Supporting circular economy and reducing waste
182
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Copper recycling supports circular economy, reducing the demand for primary raw materials and reducing metal waste. By recovering copper from final products it is
possible to use existing resources efficiently, leading to reduction in the environmental burden associated with the extraction and processing of primary raw materials.
Risks
Risk associated with the ability to store, discharge, sell or manage waste
Risk of inability to manage increased mine water inflows
Lack of relevant permits for waste collection and treatment, or loss of those already held
Opportu
nities
-
ESRS S1 - Own Staff Resources
Employment security
Impacts
Positive Actual Providing stable jobs and employment security
The Group recognises the great importance of ensuring stable jobs, which translates into low employee turnover and no collective redundancies.
Positive Actual Social protection and benefits for employees
Group companies offer an extensive package of social and in-kind benefits to their employees to improve their quality of life and ensure social stability.
Risks
Changes in Occupational Exposure Limits (OEL) and Maximum Allowable Biological Concentration (MAC) (OHS)
Opportu
nities
-
Working time
Impacts
Negative Actual Dissatisfaction with overtime and shift work
Working time in the mining and metallurgical industry involves significant pressure related to the continuity of production processes. For some employees, overtime
can be perceived as a burden, despite being paid for the extra work.
Risks
Opportu
nities
-
Work and life balance
Impacts
Positive Actual Employee support and work-life balance
The Group offers a number of benefits and subsidies. Office workers can request flexible working hours.
Negative Actual Work-related stress and impact on employees' private lives
Workers, especially those at risk of serious accidents (e.g. in mines), feel the stress of having to work in a high-risk environment.
Risks
OHS: Changes in the limit values of the Occupational Exposure Limits (OELs) and Maximum Allowable Biological Concentration (MAC)
Opportu
nities
-
Social dialogue (dialogue
with employees);
Impacts
Negative Potential Failure to adequately consider employees' opinions and needs
The Group takes steps to listen to employees and take their opinions into account. However, there are challenges related to meeting all the needs that may arise in the
dialogue.
Positive Actual Expanded methods of social dialogue (focus on dialogue with employees)
Regular surveys and monitoring mechanisms give employees the opportunity to submit their opinions and concerns.
Risks
OHS: Changes in the limit values of the Occupational Exposure Limits (OELs) and Maximum Allowable Biological Concentration (MAC)
Opportu
nities
-
Impacts
Positive Actual Cooperation with trade unions and employee councils
183
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Freedom of association,
existence of employee
councils and workers' rights
to information, consultation
and participation
The Group has numerous trade unions. The company recognises great importance of dialogue and cooperation with trade union representatives. In addition, an
employee council operates in the Company, providing another channel of communication between employees and the Management Board.
Risks
OHS: Changes in the limit values of the Occupational Exposure Limits (OELs) and Maximum Allowable Biological Concentration (MAC)
Opportu
nities
-
Collective bargaining,
including percentage of
employees covered by
collective agreements
Impacts
Positive Actual Functioning of collective agreements
The Group has collective bargaining agreements in place that regulate the terms and conditions of employment, ensuring a balance between the interests of the
employer and employees.
Risks
-
Opportu
nities
-
Health and Safety
indicators
Impacts
Negative Actual Fatal and/or serious accidents at the workplace
Accidents at work are predominantly of a minor nature, but serious and fatal accidents also occur.
Negative Actual Occupational diseases
Occupational diseases in the mining and metallurgical industry pose a serious threat to the health of workers, due to the specific working conditions and exposure to a
variety of harmful factors.
Positive Actual Comprehensive physical and mental health support programs for employees
The Group implements comprehensive measures to care for the health and well-being of its employees. Health programs provide, among others, access to medical
care, regular preventive examinations and psychological support.
Risks
Changes in the limit values of OELs and MAC (OHS)
Opportu
nities
Possibility of obtaining external support for innovations in the field of OHS
Making efforts to increase use of public funds for the transformation of KGHM Polska Miedź S.A. may contribute to the optimisation of operating expenses.
Potential of the Company and selected dedicated R&D centres in the area of health and safety capable of diagnosing and adapting the Group to changes
The preparation of a long-term cooperation plan with reference entities for the Company may enable the Group to better adapt to changes in the area of health and
safety, which may translate into optimised operating costs.
Gender equality and equal
pay for work of equal value
Impacts
Negative Potential Gender pay gap monitoring
The Group monitors the gender pay gap by analysing the pay gap between men and women. The Group strives to carry out in-depth analyses and apply fair
remuneration policies to minimise financial discrimination in the workplace.
Risks
-
Opportu
nities
-
Diversity
Impacts
Negative Potential Low representation of vulnerable groups at risk of exclusion
Failure to adequately manage diversity can affect the loss of talent, cause a decline in engagement and innovation among employees.
Risks
-
Opportu
nities
-
Measures aimed at
preventing violence and
harassment in the
workplace
Impacts
Negative Potential Inadequate prevention of workplace abuse and violence and its psychological effects on employees
Transparent rules are in place to deal with suspected abuse, including the availability of channels to report such situations. Potential incidents can involve serious
psychological strain on employees.
Negative Potential Situations of discrimination and abuse in the workplace
184
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Due to its large scale of employment, the Group assumes a continuous need for prevention of abuse and violence in the workplace.
Risks
-
Opportu
nities
-
Training and skills
development
Impacts
Positive Potential Opportunities to develop skills/competence
The Group provides a wide range of training activities tailored to employees' expectations, impacting career development and increasing their commitment to the work
performed.
Risks
-
Opportu
nities
Potential of implementing a long-term follow-up program in the Company and occupational adaptation programs
Building an effective and inclusive organisational culture that supports the acquisition and development of employee competencies, including the implementation of
development programs for new key skills for the organisation and an age management program, can contribute to the optimisation of operating costs by better
matching competencies to the Company's needs and increasing work efficiency.
ESRS S2 - Working conditions
Employment security
Impacts
Positive Actual High impact on the local economy and employment
The Group has a significant influence on the stability and financial performance of its suppliers through procurement, especially in the regions where the companies'
main divisions are located.
Risks
-
Opportu
nities
-
Working time / Adequate
wages
Impacts
Negative Potential Unintentional indirect support to unethical practices in suppliers’ companies
As it is not possible to fully verify the labour practices of every supplier, including small and medium-sized enterprises (SMEs), there is a risk that some of them may
apply unethical practices non-compliant with the Company values.
Risks
-
Opportu
nities
-
Adequate pay
Impacts
Positive Actual Impact on decent employment conditions in direct suppliers’ companies
The Group's market presence contributes to the creation of jobs in its partner companies, supporting employment growth in the region. Stable cooperation with
suppliers and timely payment of liabilities ensure financial liquidity in the supply chain, enabling them to maintain employment and ensure that employees are paid at
least the statutory minimum wage..
Risks
-
Opportu
nities
-
Social dialogue (dialogue
with employees in the value
chain)
Impacts
Negative Potential Unethical practices in the supply chain
The lack of adequate verification mechanisms, insufficient communication concerning available whistleblowing channels and low levels of awareness among both
employees and contractors about violations of human rights and ethical standards can lead to the continuation of unethical practices in the supply chain.
Risks
-
Opportu
nities
-
Impacts
Negative Potential Lack of sufficient practical verification of suppliers in terms of respect for human rights, including freedom of association
185
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Freedom of association,
including the existence of
employee councils /
collective bargaining
Currently, KGHM Polska Miedź S.A., apart from declarative statements by suppliers, does not conduct audits to confirm respect for human rights, including freedom of
association. Lack of audits and verification throughout the supply chain can lead to human rights violations at suppliers’ plants.
Risks
-
Opportu
nities
-
Work and life balance
Impacts
Negative Potential Cooperation with suppliers who apply unlawful or unethical work-life balance practices
Cooperation with suppliers who do not adhere to work-life balance principles can lead to violations of both ethical and legal standards.
Negative Potential Work-related stress (overtime, shift work, high responsibility)
Work-related stress resulting from overtime, shift work and accident-exposed conditions can negatively affect employees' private lives. Consequently, it can lead to
professional burnout, health problems and disruptions of the work-life balance.
Risks
-
Opportu
nities
-
Health and Safety
indicators
Impacts
Negative Potential Collaboration with suppliers using illegal or unethical health and safety practices (violation of law and risk of accidents)
Working with suppliers using unlawful or unethical health and safety practices can lead to violation of law and an increased risk of accidents.
Negative Potential Collaboration with suppliers using illegal or unethical health and safety practices (fatal and/or serious accidents in the workplace)
Working with suppliers using illegal or unethical health and safety practices includes a deterioration of workplace safety standards, which can contribute to serious
incidents, including fatal accidents. This can also have a negative impact on the Group as a whole, leading to legal, financial and reputation consequences.
Risks
-
Opportu
nities
-
Measures aimed at
preventing violence and
harassment in the
workplace
Impacts
Negative Potential Collaboration with suppliers using illegal or unethical practices in the scope of prevention of violence and harassment in the workplace
Collaboration with contractors using illegal or unethical practices to prevent violence and harassment in the workplace can lead to violation of ethical standards and
legal regulations. It can also damage the Company's reputation, affect the legal position and lead to the loss of trust, higher staff turnover and lower morale.
Risks
-
Opportu
nities
-
Gender equality and equal
pay for work of equal value
Impacts
Negative Potential Collaboration with suppliers using illegal or unethical practices in the scope of gender equality and equal pay for work of equal value
The negative impact could be a deterioration of the Company's reputation, legal position, loss of stakeholder confidence and a decrease of employee morale, which
may perceive the Company as supporting inequality in treatment of its employees. Such circumstances can lead to increased employee turnover and decline in
involvement in the Company.
Risks
-
Opportu
nities
-
Diversity
Impacts
Negative Potential Collaboration with suppliers using illegal or unethical practices in the scope of diversity
Collaboration with contractors using illegal or unethical practices in the scope of diversity can lead to discrimination and lack of inclusiveness in the workplace.
Risks
-
186
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Opportu
nities
-
Training and skills
development indicators
Impacts
Negative Potential Collaboration with suppliers using illegal or unethical practices in the scope of training and development of skills
Collaboration with suppliers using illegal or unethical practices can lead to the lack of appropriate professional development opportunities for employees, which
reduces their motivation and effectiveness.
Risks
-
Opportu
nities
Availability of specialised global corporations implementing large investments
The development of competence and access to highly qualified specialists, best practices and modern management methods can support the maintenance or growth of
revenues, the stabilisation of costs and the containment of cost growth.
Employment and
integration of people with
disabilities
Impacts
Negative Potential Collaboration with suppliers using illegal or unethical practices in the scope of employment and integration of people with disabilities
Collaboration with contractors using illegal or unethical practices in the scope of employment and integration of people with disabilities can lead to discrimination and
inequality in employment, which negatively affects the Company's image.
Risks
-
Opportu
nities
-
Child labour
Impacts
Negative Potential Collaboration with suppliers using illegal or unethical practices in the scope of using child labour
Collaboration with suppliers using illegal or unethical practices such as using child labour can lead to serious legal and ethical violations, affecting reputation, legal and
financial issues.
Risks
Risk of non-compliance with legal regulations and human rights rules and procedures adopted at KGHM Polska Miedź S.A.
Opportu
nities
-
Forced labour
Impacts
Negative Potential Collaboration with suppliers using illegal or unethical practices such as forced labour
Collaboration with suppliers using illegal or unethical practices such as forced labour can lead to serious legal and ethical violations, affecting reputation, legal and
financial issues.
Risks
-
Opportu
nities
-
Adequate housing
conditions
Impacts
Negative Potential Collaboration with suppliers who provide substandard staff accommodation to employees
Collaboration with contractors with illegal or unethical practices, from the scope of providing substandard staff accommodation to employees, affecting legal and
ethical housing issues.
Risks
-
Opportu
nities
-
Water and sanitary
conditions
Impacts
Negative Potential Collaboration with suppliers who do not provide workers with access to clean water and adequate sanitary conditions
Collaboration with contractors using unlawful or unethical practices, from the scope of providing employees with access to clean water and adequate sanitary
conditions, can lead to violation of fundamental human rights and personal data protection regulations.
Risks
-
Opportu
nities
-
187
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Privacy
Impacts
Negative Potential Collaboration with suppliers who violate employees' right to privacy
Collaboration with contractors using unlawful or unethical practices, from the scope of providing employees with access to clean water and adequate sanitary
conditions, can lead to violation of fundamental human rights and personal data protection regulations.
Risks
-
Opportu
nities
-
ESRS S3 - Affected communities
Adequate housing
conditions
Impacts
Negative Actual Noise - impact on neighbourhood (metallurgical facilities and mines)
The Group complies with the standards set by law; however, in some cases, residents may experience noise associated with the activities of Group’s companies.
Negative Actual Unpleasant odours (metallurgical facilities and mines)
Under certain weather conditions, such as a specific wind direction, odour emitted from the metallurgical facilities can reach urban areas.
Risks
-
Opportu
nities
-
Impact on land
Impacts
Negative Actual Mining and post-mining damages
Mining activities resulting in damage to local infrastructure.
Risks
-
Opportu
nities
-
Impact on safety
Impacts
Negative Potential Negative impact on the safety of residents in the event of failure or disaster in facilities
Potential threat to health, life and damage to property in surrounding areas.
Risks
-
Opportu
nities
-
Other
Impacts
Positive Actual Positive impact on health of local communities
The Group actively supports health of local communities by funding preventive programs , organising sports events and working with municipalities to improve the
health condition of residents.
Negative Potential Impact of arsenic emissions from metallurgical operations on human health
Modern process management technologies make arsenic emissions negligible, compliant with the permits held by the company.
Positive Actual Positive impact on social, cultural, sports and educational life (social capital)
The Group is involved in the social life of the region through cultural, educational and sports activities that strengthen the integration of local communities.
Positive Actual Positive impact on development of local communities through taxes and scale of employment
The Group generates revenue for local authorities through the payment of taxes, which enables public investment and infrastructure development in the region. The
Group creates jobs, which has the effect of reducing unemployment and increasing employment among local residents.
Positive Actual Positive impact on local nature, environmental campaigns, environmental education and ecological awareness building
The Group is committed to the implementation of environmental programs such as planting trees, protecting green spaces and improving air quality. The Group
organises educational activities for local communities, including schools.
Risks
Risk that inadequate management of stakeholder relations will contribute to the lack of support for the Company’s activities or taking action against the
Company’s activities
188
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Opportu
nities
-
Prior, free and informed
consent
Impacts
Negative Potential Failure to provide opportunities for voluntary and informed consent of indigenous peoples (applies to international assets)
Current activities do not results in infringement of rights. However, the lack of dialogue and the development of a “common path” with local communities may result in
difficulties in building trust and acceptance among indigenous peoples, which may ultimately delay the project's progression to the next phase.
Risks
-
Opportu
nities
-
Self-determination
Impacts
Negative Potential Violation of the right of self-determination (applies to international assets)
Current activities do not cause a direct risk of violating the right of indigenous people to self-determination. However, the lack of constructive dialogue and the
development of acceptable solutions can increase the risk of escalating social conflicts, lead to project delays, reputational damage and make it difficult to obtain the
necessary approvals and continue activities in subsequent phases of the project.
Risks
-
Opportu
nities
-
Cultural rights
Impacts
Negative Potential Violation of the cultural rights of indigenous peoples (applies to international assets)
Current activities do not cause a direct negative impact on the cultural rights of indigenous peoples. However, the lack of dialogue and solutions that take into account
the protection of cultural heritage and traditions may lead to escalating social conflicts, loss of trust of local communities, delays in project implementation and
exposure of Group companies to criticism, which will negatively affect reputation and hinder further stages of the project.
Risks
-
Opportu
nities
-
ESRS S4 - Consumers and end-users
Privacy
Impacts
Negative Potential Loss of sensitive personal data
The loss of sensitive data from Miedziowe Centrum Zdrowia and the Group's spa companies, including medical data of patients and spa guests could lead to serious
legal and reputation consequences. A violation of data protection legislation (GDPR) in such a case would result in imposing financial penalties and a loss of trust of
both patients and the general public.
Risks
-
Opportu
nities
-
Occupational Health and
Safety / Personal safety
Impacts
Negative Potential Positive Actual Positive Impact on health status of patients and spa guests
The positive impact is due to the high quality of medical services and the comprehensive care they receive during their stay in a sanatorium or a hospital. High-quality
medical services and monitoring of health progress helps to improve the health condition of patients. Many people return to our facilities, which demonstrates the
effectiveness of the therapy and satisfaction with the care received.
Risks
-
189
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Opportu
nities
-
ESRS G1 - Business conduct
Corporate culture
Impacts
Negative Potential Lack of clarity of rules and unacceptable behaviour among office workers
Insufficient clarity of rules and behaviours unacceptable to the Group (presented among others in the Code of Ethics) can lead to non-compliance with ethical standards
in the organisation. As a consequence, this may result in Group companies being perceived as less reliable or not caring about business ethics, which in turn may
negatively affect the Group's reputation and business relationships.
Negative Potential Lack of clarity of rules and unacceptable behaviour among production employees in the mining sector
Insufficient clarity of rules and unacceptable behaviour among employees can lead to non-compliance with ethical standards, which increases the probability of
unethical practices such as breach of security procedures, fraud or dishonest behaviour. As a consequence, this could result in breach of workplace safety rules, an
increase in incidents, damage to the reputation of Group’s companies and potential legal and financial consequences.
Negative Potential Lack of clarity in rules and expectations towards counterparties
Insufficient clarity of rules and unacceptable behaviour in relation to counterparties can lead to misunderstanding of expectations, misinterpretation of Group
companies' policies and standards, and lead to misunderstandings and lack of cooperation. As a consequence, this can undermine the organisation's reputation and
hinder building positive relationships with contractors.
Negative Potential Lack of clarity of the rules and expectations towards social environment
Insufficient legibility of rules and behaviours unacceptable for the company in relation to the social environment can lead to unsatisfied information needs of this
stakeholder group. Consequently, this can result in weakening of relations with local communities, the risk of a lack of acceptance of the company's actions, a decline in
trust, as well as potential conflicts.
Risks
Failure to comply with established rules and standards of ethical conduct within the Group
Opportu
nities
New technologies and IT management systems
Integrated solutions in the areas of projects, portfolios, risks and strategy, can increase the efficiency of organisational units, seal sales procedures in the context of
fraud risks, and contribute to lower capital expenditure and cost stabilisation.
Whistleblower protection
Impacts
Negative Potential Inadequate whistleblower protection and negative consequences of reporting concerns or irregularities
Inadequate whistleblower protection may result in a decline in trust in the Company's internal systems, escalation of irregularities, deterioration of the Company's
organisational culture and reputation.
Risks
-
Opportu
nities
-
Supplier relationship
management, including
payment practices
Impacts
Negative Actual Negative impact of the Company on the condition and/or liquidity of suppliers (especially SMEs) through long payment terms
Long payment terms can adversely affect the liquidity of suppliers, especially small and medium-sized enterprises (SMEs), which may find it difficult to maintain financial
stability, meet ongoing obligations or develop.
Negative Potential Contracts with suppliers that do not comply with business ethics, including anti-corruption rules
With regard to external suppliers, the Group mainly relies on declarative statements. The lack of adequate knowledge of supplier practices can potentially lead to
unconscious support of irresponsible actions such as corruption, violation of ethical rules, etc.
Negative Potential Contracts with suppliers who violate human and/or labour rights
190
Subtopic
Impacts Positive, Negative, potential, actual / Risks / Opportunities
Failure to monitor and verify the activities of suppliers with respect to human and labour rights can result in collaboration with companies that engage in worker
exploitation, discrimination or other forms of human rights violation.
Negative Potential Contracts with suppliers that do not meet responsible environmental impact management standards
With regard to external suppliers, the Group mainly relies on declarative statements. Lack of adequate knowledge of the practices of external suppliers can potentially
lead to unconscious support of irresponsible activities that negatively affect the environment.
Positive Actual Positive impact on suppliers and their financial condition
Transparency of cooperation rules, scaling of orders and certainty of payment within agreed deadlines affects the financial condition of suppliers.
Risks
Risk of failing to meet social and ethical standards of the transparent and sustainable supply chain and stakeholder expectations in the scope of KGHM's
compliance with responsible supply chain rules
Opportu
nities
Optimisation of work and development of the potential of companies in the KGHM Group
Developing a way of supporting and cooperating with the Group’s companies in raising funds for selected areas and projects and the development of a catalogue of the
skills and scopes of activities of the Group’s companies, including the assignment of specific skills and activities, may contribute to optimising work and reducing the
Group's operating expenses.
Prevention and detection,
including training /
Incidents.
Impacts
Negative Potential Potential incidents of corruption
Corruption can occur in various areas of the Group companies' activities, including contracting, tenders or relations with suppliers and other stakeholders. Such cases
can lead to unfair procurement, favouring certain entities, regulatory violations and can also have serious legal and reputation consequences.
Risks
Risk of non-compliance with legal regulations and anti-corruption rules and procedures adopted in KGHM Polska Miedź S.A.
Opportu
nities
-
Other
Impacts
Negative Potential Potential leakage of contractor, employee data and personal data protection breaches
A potential leak could result in serious legal and financial consequences due to breaches of data protection legislation (e.g. GDPR), loss of the Company's reputation or
stakeholder trust.
Risks
-
Opportu
nities
-
191
Significant impacts and opportunities and their links with the strategy and business model
Significant sustainability impacts and opportunities result from the KGHM Polska Miedź S.A. Group's assessment of double materiality as specified in detail in section IRO-1 - Description of
the process for identifying and assessing material impacts, risks and opportunities.
The table below presents a list of significant impacts divided into: "E" environmental impact, "S" social impact and "G" corporate governance impact, followed by the ESRS thematic standards,
indicating the links to the areas and targets of the Strategy of the KGHM Polska Miedź S.A. Group to the year 2030 with an outlook to 2040 and the tools to manage these impacts, with a
reasonably expected time horizon for the impacts. If an impact was identified as “potential” rather than “actual” in the materiality test, the assessment of the likelihood of its occurrence in
time horizons of up to one year (short), up to five years (medium) and more than five years (long) followed.
Table 106. Significant impacts and opportunities and their links with the strategy and business model
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
ENVIRONMENTAL IMPACT
ESRS E1 - Climate change
Adapting to climate
change
Positive Actual
Production of key metals for a low-carbon
economy and technological transformation
Opportunities
− Extension of the value chain
− Raw material diversification of development
areas
Outlook of impact - not applicable
Lower level
Own operations
“1.3 Leader in the development of
low-emissions mining capacity for
new metals and mineral deposits in
Poland”
Poland, Canada,
USA, Chile
Contractors -
worldwide
PN-EN ISO 14001 Environmental Management
System; PN-EN ISO 50001 Energy
Management System; Climate Policy; Energy
Policy;
Adapting to climate
change /
Climate change mitigation
Opportunities
− Development of new technologies in the field
of mining, energy, automation
− Availability of external funding sources
Outlook of impact - not applicable
Higher level
Lower level
Own operations
“2.1 One of the leading producers
of environmentally-friendly
electricity - supporting Poland’s
energy transition”
Poland, Canada,
USA, Chile
Contractors -
worldwide
PN-EN ISO 14001 Environmental Management
System; Climate policy - declaration of
neutrality in 2050; Energy policy
Climate change mitigation
Negative Actual
Indirect emissions of greenhouse gases
(Scope 1)
Opportunities
− „Green copper”, „green concentrate”
Higher level
“2.1 One of the leading producers
of environmentally-friendly
electricity - supporting Poland’s
energy transition”
“1.2 Optimisation of mine
production domestically and
Contractors -
worldwide
PN-EN ISO 14001 Environmental Management
System; Climate policy - declaration of
neutrality in 2050; Energy policy
192
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Outlook of impact - not applicable
abroad ensuring long-term
operational continuity”
Climate change mitigation
Negative Actual
Indirect emissions of greenhouse gases
(Scope
2) as a result of purchasing electricity from third
parties, where the energy mix is largely based
on fossil fuels such as coal, lignite and natural
gas
Negative Actual
Indirect emissions of greenhouse gases
(Scope
3) as a result of purchasing raw materials and
fuels from third parties
Opportunities
− Increasing the organisation’s competitiveness
by reducing indirect CO
2
emissions
Outlook of impact - not applicable
Higher level
“2.1 One of the leading producers
of environmentally-friendly
electricity - supporting Poland’s
energy transition”
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
Contractors -
worldwide
PN-EN ISO 14001 Environmental Management
System; Climate policy - declaration of
neutrality in 2050; Energy policy
Climate change mitigation
Negative Actual
Indirect emissions of greenhouse gases
(Scope
3)
as a result of purchasing raw materials and
fuels from third parties
Outlook of impact - not applicable
Higher level
Not applicable
Contractors -
worldwide
PN-EN ISO 14001 Environmental Management
System; Climate policy - declaration of
neutrality in 2050; Energy policy
Energy
Negative Actual
Consumption of large quantities of energy from
non-renewable fossil sources
Opportunities
− Energy optimisation of KGHM
Taking advantage of the forms of funding
offered by funds, banks, and other financing
institutions for energy transition,
decarbonisation, energy efficiency
improvement projects.
Outlook of impact - not applicable
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“2.1 One of the leading producers
of environmentally-friendly
electricity - supporting
Poland’s energy transition”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; PN-EN ISO 50001 Energy
Management System; Climate Policy; Energy
Policy;
193
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
ESRS E2 - Pollution
Air pollution
Negative Actual
Air emissions of dust and gases
Outlook of impact - not applicable
Own operations
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; BATAs; Environmental Policy
Soil contamination
Negative Actual
Soil contamination resulting from a breakdown
Outlook of impact - not applicable
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Corporate Risk Management
Procedure of the KGHM Polska Miedź S.A.
Group
Soil pollution /
Water pollution
Negative Potential
No possibility of further storage of waste and
damage to the protective layers of landfills
Impact time horizon - ongoing monitoring
Own operations
1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Environmental Policy; Corporate Risk
Management Procedure of the KGHM Polska
Miedź S.A. Group; Business Continuity
Management System based on the ISO 22301
standard
Water discharges
Negative Actual
Discharges of industrial effluents from the
hydrotechnical management of mine-
technological water from the Żelazny Most
Tailings Storage Facility and from technological
water circulation
Outlook of impact - not applicable
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland - Żelazny
Most Tailings
Storage Facility
PN-EN ISO 14001 Environmental Management
System; Environmental Policy; ZTE (Technical
and Economic Assumptions); Selective
management of mine and process water
Water discharges
Negative Actual
Exceeded nitrite nitrogen limit values in water
discharges
Outlook of impact - not applicable
Own operations
Not applicable
Poland - Żelazny
Most Tailings
Storage Facility
PN-EN ISO 14001 Environmental Management
System; Environmental Policy; Corporate Risk
Management Procedure of the KGHM Polska
Miedź S.A. Group
Water discharges
Negative Actual
Discharge of treated metallurgical effluent
Outlook of impact - not applicable
Own operations
Not applicable
Poand -
Metallurgical
divisions of KGHM
Polska Miedź S.A.
PN-EN ISO 14001 Environmental Management
System; Environmental Policy
194
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Potentially hazardous
substances / Substances of
very high concern
Negative Actual
Use / generation of hazardous substances
Outlook of impact - not applicable
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Environmental Policy; Internal
documents, such as: Exposure scenarios,
Safety data sheets
Potentially hazardous
substances / Substances of
very high concern
Negative Potential
Potential environmental contamination by
hazardous or potentially hazardous substances
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Environmental Policy; Corporate Risk
Management Procedure of the KGHM Polska
Miedź S.A. Group
Substances of very high
concern
Positive Actual
Use of lead from dust a part of the CE
Outlook of impact - not applicable
Own operations
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland -
Metallurgical
divisions of KGHM
Polska Miedź S.A.
PN-EN ISO 14001 Environmental Management
System; Environmental Policy
Other
Negative Potential
Negative environmental impact on the supply
chain resulting from significant pollution
generated by suppliers
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
“5.1 Growth based on the idea of
sustainability and safety”
Contractors -
worldwide.
Policy for a Responsible Supply Chain in the
KGHM Polska Miedź S.A. Group, Procedure for
Examination of the Supply Chain for Gold in
KGHM Polska Miedź S.A., Procedure for Due
Diligence in Examination of the Supply Chain
for Copper and Lead; Principles for selection
of bidders in KGHM Polska Miedź S.A.;
Contractor’s Charter
ESRS E3 – Water and marine resources
Water - water
consumption
Negative Actual
Water consumption by production processes
Outlook of impact - ongoing monitoring
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Environmental Policy
Water intake
Negative Potential
Water needed for technological purposes
(floatation, hydrotransport) comes from mine
Own operations
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Environmental Policy; Corporate Risk
195
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
dewatering – this is more than 50% of water
intake
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Management Procedure of the KGHM Polska
Miedź S.A. Group
Water discharges
Negative Actual
Discharges of industrial effluents from the
hydrotechnical management of mine-
technological water from the Żelazny Most
Tailings Storage Facility and from technological
water circulation
Outlook of impact - ongoing monitoring
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland - Extension
of Żelazny Most
Tailings Storage
Facility
PN-EN ISO 14001 Environmental Management
System; Environmental Policy
ESRS E4 - Biodiversity and ecosystems
Direct drivers of
biodiversity loss
Negative Actual
Impact of mining activity on flora and fauna and
animal habitats
Outlook of impact - up to 1 year and over 5
years - low likelihood
Own operations
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Code of Ethics of the KGHM Polska
Miedź S.A. Group; Environmental policy;
Direct drivers of
biodiversity loss
Negative Potential
Impact of water discharges from mine
dewatering on surface water ecosystems
Impact outlook - up to 1 year and over 5 years -
low likelihood
Own operations
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
“5.1 Growth based on the idea of
sustainability and safety”
Poland - Extension
of Żelazny Most
Tailings Storage
Facility
PN-EN ISO 14001 Environmental Management
System; Environmental Policy
Direct drivers of
biodiversity loss
Negative Potential
Other types of pollution (e.g. air, soil) impairing
the condition or loss of species/ecosystems
Outlook - up to 1 year and over 5 years - low
likelihood
Own operations
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Environmental Policy; Code of Ethics
of the KGHM Polska Miedź S.A. Group
196
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Impact on the extent and
condition of ecosystems
Negative Actual
Land development, including clearing and land
conversion
Outlook of impact - not applicable
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.3 Leader in the development of
low-emissions mining capacity for
new metals and mineral deposits in
Poland”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Code of Ethics of the KGHM Polska
Miedź S.A. Group; Environmental policy;
Energy policy
Impact on the extent and
condition of ecosystems
Positive Actual
Protecting biodiversity in the areas of operation
of the Company
Outlook of impact - not applicable
Own operations
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System; Environmental Policy
Direct drivers of
biodiversity loss / Impact
on the extent and
condition of ecosystems
Negative Potential
Impact of supply chain on biodiversity
Impact outlook - up to 1 year and over 5 years -
low likelihood
Higher level
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
Contractors -
worldwide.
PN-EN ISO 14001 Environmental Management
System;
Environmental Policy; Policy for a Responsible
Supply Chain in the KGHM Polska Miedź S.A.
Group, Procedure for Examination of the
Supply Chain for Gold in KGHM Polska Miedź
S.A., Procedure for Due Diligence in
Examination of the Supply Chain for Copper
and Lead; Principles for selection of bidders in
KGHM Polska Miedź S.A.; Contractor’s Charter
Impact on the status of
species
Negative Potential
Impact of suppliers and customers on
biodiversity
Impact outlook - up to 1 year and over 5 years -
low likelihood
Higher level
Own operations
Lower level
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
Contractors -
worldwide.
PN-EN ISO 14001 Environmental Management
System; Policy for a Responsible Supply Chain
in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead;
Principles for selection of bidders in KGHM
Polska Miedź S.A.; Contractor’s Charter
197
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
ESRS E5 Use of resources and circular economy
Impact of resources,
including the use of
resources
Negative Actual
Use of fossil fuels and non-renewable raw
materials
Opportunities
− Use of process water in core business
processes
− Urban Mining
Outlook of impact - not applicable
Higher level
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.3 Leader in the development of
low-emissions mining capacity for
new metals and mineral deposits in
Poland”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland, Canada,
USA, Chile
Contractors -
worldwide.
PN-EN ISO 14001 Environmental Management
System; PN-EN ISO 50001 Energy
Management System; Climate Policy; Energy
Policy;
Impact of resources,
including the use of
resources
Positive Potential
Increasing efficiency in the use of non-
renewable raw materials
Impact outlook - up to 1 year - very low
likelihood
up to 5 years - medium likelihood;
over 5 years - high likelihood
Higher level
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.3 Leader in the development of
low-emissions mining capacity for
new metals and mineral deposits in
Poland”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
“2.1 One of the leading producers
of environmentally-friendly
electricity - supporting Poland’s
energy transition”
Poland, Canada,
USA, Chile
Contractors -
worldwide.
PN-EN ISO 14001 Environmental Management
System; PN-EN ISO 50001 Energy
Management System; Climate Policy; Energy
Policy;
Waste
Negative Actual
Generation of non-recyclable waste and other
recovery processes
Opportunities
− Multi-resource, including rare earth elements
−
Own operations
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland, Canada,
USA, Chile
PN-EN ISO 14001 Environmental Management
System;
198
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Outlook of impact - not applicable
Waste
Positive Actual
Optimisation of waste management in
accordance with the waste handling hierarchy
Outlook of impact - not applicable
Own operations
Lower level
“1.2 Optimisation of mine
production domestically and
abroad ensuring long-term
operational continuity”
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
Poland, Canada,
USA, Chile
Contractors -
worldwide.
PN-EN ISO 14001 Environmental Management
System;
Waste
Positive Actual
Copper Recycling - Supporting circular economy
and reducing waste
Outlook of impact - not applicable
Own operations
Lower level
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
“3.1 Major supplier of Smart Mining
solutions for products and services
sold in Poland and globally.
Poland -
Metallurgical
divisions of KGHM
Polska Miedź S.A.
Contractors -
worldwide
PN-EN ISO 14001 Environmental Management
System;
IMPACT ON SOCIETY
ESRS S1 - Own Staff Resources
Employment security
Positive Actual
Providing stable jobs and employment security
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
HR Policy of KGHM Polska Miedź S.A.; Code of
Ethics of the KGHM Polska Miedź S.A. Group;
Human Rights Policy of KGHM Polska Miedź
S.A.; PN-ISO 45001 Occupational Health and
Safety Management System
Employment security
Positive Actual
Social protection and benefits for employees
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
HR Policy of KGHM Polska Miedź S.A.;
Regulations of the Company Social Benefits
Fund; Company Collective Labour Agreement;
Code of Ethics of the KGHM Polska Miedź S.A.
Group; Human Rights Policy of KGHM Polska
Miedź S.A;
Working time
Negative Actual
Dissatisfaction with overtime and shift work
Outlook of impact - not applicable
Own operations
Not applicable
Poland, Canada,
USA, Chile
HR Policy of KGHM Polska Miedź S.A.;
Company Collective Labour Agreement;
Whistleblower Platform; Code of Ethics of the
KGHM Polska Miedź S.A. Group; Human Rights
Policy of KGHM Polska Miedź S.A.; PN-ISO
45001 Occupational Health and Safety
Management System
199
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Work and life balance
Positive Actual
Employee support and work-life balance
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
HR Policy of KGHM Polska Miedź S.A.;
Regulations of the Company Social Benefits
Fund; Human Rights Policy of KGHM Polska
Miedź S.A; Code of Ethics of the KGHM Polska
Miedź S.A. Group;
Work and life balance
Negative Actual
Work-related stress and impact on employees’
private lives
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
HR Policy of KGHM Polska Miedź S.A.;
Regulations of the Company Social Benefits
Fund; Human Rights Policy of KGHM Polska
Miedź S.A; Code of Ethics of the KGHM Polska
Miedź S.A. Group;
Social dialogue (dialogue
with employees)
Negative Potential
Failure to adequately consider employees'
opinions and needs
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
HR Policy of KGHM Polska Miedź S.A.; Code of
Ethics of the KGHM Polska Miedź S.A. Group;
PN-ISO 45001 Occupational Health and Safety
Management System; Occupational Health
and Safety Policy
Social dialogue (dialogue
with employees)
Positive Actual
Well-developed methods to engage in social
dialogue (pressure to have a dialogue with
employees)
Outlook of impact - not applicable
Own operations
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
HR Policy of KGHM Polska Miedź S.A.; Code of
Ethics of the KGHM Polska Miedź S.A. Group;
PN-ISO 45001 Occupational Health and Safety
Management System; Occupational Health
and Safety Policy
Freedom of association,
existence of employee
councils and workers'
rights to information,
consultation and
participation
Positive Actual
Cooperation with trade unions and employee
councils
Outlook - not applicable
Own operations
Not applicable
Poland, Canada,
USA, Chile
Company Collective Labour Agreement; HR
Policy of KGHM Polska Miedź S.A.; Code of
Ethics of the KGHM Polska Miedź S.A. Group;
Human Rights Policy of KGHM Polska Miedź
S.A.
Working conditions -
Collective bargaining,
including percentage of
employees covered by
collective agreements
Positive Actual
Functioning of collective labour agreements
Outlook of impact - not applicable
Own operations
Not applicable
Poland, Canada
Company Collective Labour Agreement; HR
Policy of KGHM Polska Miedź S.A.; Code of
Ethics of the KGHM Polska Miedź S.A. Group;
Human Rights Policy of KGHM Polska Miedź
S.A.
200
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Occupational health and
safety
Negative Actual
Fatal and/or serious accidents in the workplace
Opportunities
− Possibility of obtaining external support for
innovations in the field of H&S
− Potential of the Company and selected
dedicated R&D centres in the area of health
and safety capable of diagnosing and
adapting the Group to changes
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
Poland
PN-ISO 45001 Occupational Health and Safety
Management System; Occupational Health
and Safety Policy
Occupational health and
safety
Negative Actual
Occupational diseases
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
Poland, Canada,
USA, Chile
PN-ISO 45001 Occupational Health and Safety
Management System; Occupational Health
and Safety Policy
Occupational health and
safety
Positive Actual
Comprehensive physical and mental health
support programs for employees
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
Poland, Canada,
USA, Chile
PN-ISO 45001 Occupational Health and Safety
Management System; Occupational Health
and Safety Policy
Gender equality and equal
pay for work of equal
value
Negative Potential
Gender pay gap monitoring
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
Not applicable
Poland, Canada,
USA, Chile
Company Collective Labour Agreement; HR
Policy of KGHM Polska Miedź S.A.; Code of
Ethics of the KGHM Polska Miedź S.A. Group;
Human Rights Policy of KGHM Polska Miedź
S.A.; Diversity Declaration
Diversity
Negative Potential
Low representation of vulnerable groups at risk
of exclusion
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
Not applicable
Poland, Canada,
USA, Chile
Code of Ethics of the KGHM Polska Miedź S.A.
Group; Human Rights Policy of KGHM Polska
Miedź S.A.; Diversity Declaration
201
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Measures to prevent
violence and harassment
in the workplace
Negative Potential
Inadequate prevention of workplace abuse and
violence and their psychological effects on
employees
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
Not applicable
Poland, Canada,
USA, Chile
Anti-Abuse Policy in the KGHM Group;
Whistleblower Platform; HR Policy of KGHM
Polska Miedź S.A.; Code of Ethics of the KGHM
Polska Miedź S.A. Group; Human Rights Policy
of KGHM Polska Miedź S.A.; Diversity
Declaration
Measures to prevent
violence and harassment
in the workplace
Negative Potential
Cases of discrimination and abuse in the
workplace
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
Not applicable
Poland, Canada,
USA, Chile
Anti-Abuse Policy in the KGHM Group;
Whistleblower Platform; HR Policy of KGHM
Polska Miedź S.A.; Code of Ethics of the KGHM
Polska Miedź S.A. Group; Human Rights Policy
of KGHM Polska Miedź S.A.; Diversity
Declaration
Training and skills
development
Positive Potential
Opportunities to develop skills/competence
Opportunities
Potential of implementing a long-term follow-up
program in the Company and occupational
adaptation programs
Outlook of impact - not applicable
Own operations
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
HR Policy of KGHM Polska Miedź S.A.; Training
policy
ESRS S2 - Workers in the value chain
Employment security
Positive Actual
High impact on the local economy and
employment
Outlook of impact - not applicable
Higher level
“3.2 Ensuring the financial stability
of the KGHM Group and
implementing systemic solutions
aimed at increasing the Group's
value”
“5.1 Growth based on the idea of
sustainability and safety”
Contractors -
worldwide
Code of Ethics, Procurement Policy,
Contractor’s Charter
202
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Working time / Adequate
wages
Negative Potential
Involuntary indirect support of unethical
practices in the supply chain
Impact outlook – ongoing monitoring
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter
Adequate wages
Positive Actual
Impact on decent employment conditions in
direct suppliers’ companies
Outlook of impact - not applicable
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Procurement Policy,
Contractor’s Charter
Social dialogue (dialogue
with employees in the
supply chain)
Negative Potential
Unethical practices in the supply chain
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter
Freedom of association,
existence of works
councils / Collective
bargaining
Negative Potential
Lack of sufficient practical verification of
suppliers in terms of respect for human rights,
including freedom of association
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter
Working conditions - Work
and life balance
Negative Potential
Cooperation with suppliers who apply unlawful
or unethical work-life balance practices
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter
Work and life balance
Negative Potential
Work-related stress (overtime, shift work, high
responsibility)
Outlook of impact - not applicable
Higher level
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
“5.1 Growth based on the idea of
sustainability and safety”
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
203
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Procurement Policy, Contractor’s Charter;
Occupational Health and Safety Policy
Occupational health and
safety
Negative Potential
Collaboration with suppliers using illegal or
unethical health and safety practices (violation
of law and risk of accidents)
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter;
Occupational Health and Safety Policy
Occupational health and
safety
Negative Potential
Collaboration with suppliers using illegal or
unethical health and safety practices (fatal
and/or serious accidents in the workplace)
Outlook of impact - not applicable
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter;
Occupational Health and Safety Policy
Measures to prevent
violence and harassment
in the workplace
Negative Potential
Collaboration with suppliers using illegal or
unethical practices in the scope of prevention of
violence and harassment in the workplace
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter
Gender equality and equal
pay for work of equal
value
Negative Potential
Collaboration with suppliers using illegal or
unethical practices in the scope of gender
equality and equal pay for work of equal value
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter
Diversity
Negative Potential
Collaboration with suppliers using illegal or
unethical practices in the scope of diversity
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter;
204
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Human Rights Policy in KGHM Polska Miedź
S.A.
Training and skills
development
Negative Potential
Collaboration with suppliers using illegal or
unethical practices in the scope of training and
development of skills
Opportunities
Availability of specialised global corporations
implementing large investments
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter
Employment and
integration of people with
disabilities
Negative Potential
Collaboration with suppliers using illegal or
unethical practices in the scope of employment
and integration of people with disabilities
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics, Policy for a Responsible Supply
Chain in the KGHM Polska Miedź S.A. Group,
Procedure for Examination of the Supply
Chain for Gold in KGHM Polska Miedź S.A.,
Procedure for Due Diligence in Examination of
the Supply Chain for Copper and Lead,
Procurement Policy, Contractor’s Charter;
Human Rights Policy in KGHM Polska Miedź
S.A.
Child labour
Negative Potential
Collaboration with suppliers using illegal or
unethical practices, such as using child labour
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Regulations of international law; Code of
Ethics of the KGHM Polska Miedź S.A. Group;
Human Rights Policy of KGHM Polska Miedź
S.A.
Forced labour
Negative Potential
Collaboration with suppliers using illegal or
unethical practices such as forced labour
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Regulations of international law; Code of
Ethics of the KGHM Polska Miedź S.A. Group;
Human Rights Policy of KGHM Polska Miedź
S.A.
205
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Adequate housing
conditions
Negative Potential
Collaboration with suppliers who provide
substandard staff accommodation to
employees
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics of the KGHM Polska Miedź S.A.
Group; Human Rights Policy of KGHM Polska
Miedź S.A.
Water and sanitary
conditions
Negative Potential
Collaboration with suppliers who do not provide
workers with access to clean water and
adequate sanitary conditions
Outlook of impact - not applicable
Higher level
Not applicable
Contractors -
worldwide
Regulations of international law; Code of
Ethics of the KGHM Polska Miedź S.A. Group;
Human Rights Policy of KGHM Polska Miedź
S.A.; Procurement Policy; Contractor’s Charter
Privacy
Negative Potential
Collaboration with suppliers who violate
employees' right to privacy
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Code of Ethics of the KGHM Polska Miedź S.A.
Group; Human Rights Policy of KGHM Polska
Miedź S.A.; Procurement Policy
ESRS S3 - Affected communities
Adequate housing
conditions
Negative Actual
Noise - impact on neighbourhood (smelters and
mines)
Outlook of impact - not applicable
Own operations
Not applicable
Poland - Mining,
metallurgical
divisions of KGHM
Polska Miedź S.A.
Corporate Risk Management Procedure of the
KGHM Polska Miedź S.A. Group; PN-EN ISO
14001 Environmental Management System;
Environmental Policy
Adequate housing
conditions
Negative Actual
Unpleasant odours (smelters and mines)
Outlook of impact - not applicable
Own operations
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
“5.1 Growth based on the idea of
sustainability and safety”
Poland - Legnica
Copper Smelter and
Refinery
Corporate Risk Management Procedure of the
KGHM Polska Miedź S.A. Group; PN-EN ISO
14001 Environmental Management System;
Environmental Policy
206
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Impact on land
Negative Actual
Mining and post-mining damage
Outlook of impact - not applicable
Own operations
Not applicable
Poland - Mining
divisions of KGHM
Polska Miedź S.A.
Corporate Risk Management Procedure of the
KGHM Polska Miedź S.A. Group; "Uniform
procedures related to mining damage removal
and construction prevention carried out in
connection with anticipated impacts of mining
exploitation; Guidelines for design and
coordination of mining works in neighbouring
fields in mining plants of KGHM Polska Miedź
S.A.”
Impact on safety
Negative Potential
Negative impact on the safety of residents in the
event of failures or disasters in plants
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
Not applicable
Poland, Canada,
USA, Chile
Corporate Risk Management Procedure of the
KGHM Polska Miedź S.A. Group; PN-EN ISO
45001 Occupational Health and Safety
Management System; PN-EN ISO 14001
Environmental Management System
Other
Positive Actual
Positive impact on health of local communities
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
PN-EN ISO 45001 Occupational Health and
Safety Management System; PN-EN ISO 14001
Environmental Management System
Other
Negative Potential
Impact of arsenic emissions from metallurgical
activities on human health
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
“1.4 Development of metallurgy
utilising efficient processing based
on CE assumptions”
“5.1 Growth based on the idea of
sustainability and safety”
Poland -
Metallurgical
divisions of KGHM
Polska Miedź S.A.
PN-EN ISO 14001 Environmental Management
System; BATAs; Environmental Policy
Other
Positive Actual
Positive impact on social, cultural, sports and
educational life (social capital)
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
Code of Ethics of the KGHM Polska Miedź S.A.
Group; Human Rights Policy of KGHM Polska
Miedź S.A.; Sponsorship Policy of KGHM
Polska Miedź S.A.; Regulations of the
Volunteer Program "Copper Heart"
207
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Other
Positive Actual
Positive impact on development of local
communities through taxes and scale of
employment
Outlook of impact - not applicable
Own operations
“3.2 Ensuring the financial stability
of the KGHM Group and
implementing systemic solutions
aimed at increasing the Group's
value”
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
Integrated Management System, HR Policy of
KGHM Polska Miedź S.A.
Other
Positive Actual
Positive impact on local nature, environmental
campaigns, environmental education and
ecological awareness building
Outlook of impact - not applicable
Own operations
“5.1 Growth based on the idea of
sustainability and safety”
Poland, Canada,
USA, Chile
Regulations of the volunteer program "Copper
Heart"; Environmental policy
Prior, free and informed
consent
Negative Potential
Failure to provide opportunities for voluntary
and informed consent of indigenous peoples
(applies to international assets)
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
Not applicable
Canada
Code of Ethics of the KGHM Polska Miedź S.A.
Group; Human Rights Policy of KGHM Polska
Miedź S.A.; National and provincial regulations
(Canada); Statement on Respect for the Rights
of First Nations and Indigenous Peoples
Self-determination
Negative Potential
Violation of the right of self-determination
(applies to international assets, indigenous
peoples)
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
Not applicable
Canada
Code of Ethics of the KGHM Polska Miedź S.A.
Group; Human Rights Policy of KGHM Polska
Miedź S.A.; National and provincial regulations
(Canada); Statement on Respect for the Rights
of First Nations and Indigenous Peoples
Cultural rights
Negative Potential
Violation of the cultural rights of indigenous
peoples (applies to international assets,
indigenous peoples)
Own operations
Not applicable
Canada
Code of Ethics of the KGHM Polska Miedź S.A.
Group; Human Rights Policy of KGHM Polska
Miedź S.A.; National and provincial regulations
(Canada); Statement on Respect for the Rights
of First Nations and Indigenous Peoples
208
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Impact outlook - up to 1 year and over 5 years -
very low likelihood
ESRS S4 - Consumers and end-users
Privacy
Negative Potential
Loss of sensitive personal data
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
“1.1 Advanced technology and R&D
forming a smart production chain
Poland
PGU Spas: Kłodzko,
Świeradów Zdrój -
Czerniawa, Połczyn;
MCZ Lubin
Security Policy in the KGHM Polska Miedź S.A.
Group; Privacy Policy (GDPR);
OHS/health and personal
security
Positive Actual
Positive Impact on health status of patients and
spa guests
Outlook of impact - not applicable
Own operations
“4.1 Development of pro-health
activities and health resorts as a
contribution to extending the
length and quality of life of citizens”
Poland
PGU Spas: Kłodzko,
Świeradów Zdrój -
Czerniawa, Połczyn;
Lubin mine
Code of Ethics; Code of Conduct; Occupational
Health and Safety Management System
IMPACT ON CORPORATE GOVERNANCE
ESRS G1 Business conduct
Corporate culture
Negative Potential
Lack of clarity of rules and unacceptable
behaviour among office workers
Opportunities
New technologies and IT management systems
Impact outlook - up to 1 year - high likelihood;
over 5 years - very low likelihood
Own operations
Not applicable
Poland, Canada,
USA, Chile
Code of Ethics; Code of Conduct; Integrated
Management System; Whistleblower Platform;
Work Regulations; Purchasing Policy;
Contractor’s Charter
Corporate culture
Negative Potential
Own operations
Not applicable
Poland - Mining
divisions of KGHM
Polska Miedź S.A.
Code of Ethics; Code of Conduct; Integrated
Management System; Whistleblower Platform;
Work Regulations; Purchasing Policy;
Contractor’s Charter
209
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Lack of clarity of rules and unacceptable
behaviour among production employees in the
mining sector
Impact outlook - up to 1 year - high likelihood;
over 5 years - very low likelihood
Corporate culture
Negative Potential
Lack of clarity in rules and expectations towards
counterparties
Impact outlook - up to 1 year and up to 5 years -
medium likelihood; over 5 years - very low
likelihood
Higher level
Own operations
Lower level
Not applicable
Poland, Canada,
USA, Chile
Contractors -
worldwide
Code of Ethics; Code of Conduct; Integrated
Management System; Whistleblower Platform;
Work Regulations; Purchasing Policy;
Contractor’s Charter
Corporate culture
Negative Potential
Lack of clarity of the rules and expectations
towards social environment
Impact outlook - up to 1 year and up to 5 years -
medium likelihood; over 5 years - low likelihood
Own operations
Not applicable
Poland, Canada,
USA, Chile
Code of Ethics; Code of Conduct; Integrated
Management System; Whistleblower Platform;
Work Regulations
Whistleblower protection
Negative Potential
Inadequate whistleblower protection and
negative consequences of reporting concerns or
irregularities
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Own operations
Not applicable
Poland, Canada,
USA, Chile
Integrated Management System;
Whistleblower Platform, Procedure for
Receiving Internal Reports of Violations of Law
and Follow-up; Code of Ethics
Supplier relationship
management, including
payment practices
Negative Actual
Negative impact of the Company on the
condition and/or liquidity of suppliers (especially
SMEs) through long payment terms
Higher level
“3.2 Ensuring the financial stability
of the KGHM Group and
implementing systemic solutions
aimed at increasing the Group's
value”
Contractors -
worldwide
Integrated Management System; Competition
Law Policy in the KGHM Polska Miedź S.A.
Group; Procurement Policy; Code of Ethics;
Code of Conduct
210
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Opportunities
Optimisation of work and development of the
potential of companies in the KGHM Group
Outlook of impact - not applicable
Supplier relationship
management, including
payment practices
Negative Potential
Contracts with suppliers that do not comply
with the principles of business ethics, including
anti-corruption rules
Impact outlook - up to 1 year and over 5 years -
very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Anti-Corruption Management System (SZDA)
in accordance with PN-ISO37001; Integrated
Management System; Competition Law Policy
in the KGHM Polska Miedź S.A. Group;
Procurement Policy; Code of Ethics, Human
Rights Policy
Supplier relationship
management, including
payment practices
Negative Potential
Contracts with suppliers who violate human
and/or labour rights
Impact outlook - up to 1 year - low likelihood; up
to 5 years and over 5 years - very low likelihood
Higher level
Own operations
Not applicable
Poland, Canada,
USA, Chile
Contractors -
worldwide
Integrated Management System; Competition
Law Policy in the KGHM Polska Miedź S.A.
Group; Procurement Policy; Code of Ethics;
Human rights policy
Supplier relationship
management, including
payment practices
Negative Potential
Contracts with suppliers that do not meet
responsible environmental impact management
standards
Impact outlook - up to 1 year - low likelihood; up
to 5 years and over 5 years - very low likelihood
Higher level
Not applicable
Contractors -
worldwide
Integrated Management System; Competition
Law Policy in the KGHM Polska Miedź S.A.
Group; Procurement Policy; Code of Ethics;
Environmental policy
Supplier relationship
management, including
payment practices
Positive Actual
Positive impact on suppliers and their financial
condition
Outlook of impact - not applicable
Higher level
“3.2 Ensuring the financial stability
of the KGHM Group and
implementing systemic solutions
aimed at increasing the Group's
value”
Contractors -
worldwide
Integrated Management System; Competition
Law Policy in the KGHM Polska Miedź S.A.
Group; Procurement Policy
Prevention and detection,
including training /
Incidents
Negative Potential
Potential incidents of corruption
Impact outlook - up to 1 year and over 5 years -
medium likelihood
Higher level
Own operations
Lower level
Not applicable
Poland, Canada,
USA, Chile
Contractors -
worldwide
Anti-corruption Management System (SZDA) in
accordance with PN-ISO37001; Anti-Money
Laundering and Anti-Fraud and Deception
Prevention Procedure in Commercial
Transactions Concerning the Sale of Products
and Purchase of Bullion and Copper-bearing
211
ESRS area
Type of impact, identified opportunities and
outlook
Place of impact
occurrence
Strategic objectives related to the
Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an
outlook to 2040
Geographical areas
Impact management tools
Materials at KGHM Polska Miedź
S.A.ocurement Policy; Code of Ethics, Human
Rights Policy
Other
Negative Potential
Potential leakage of contractor, employee data
and personal data protection breaches
Impact outlook - up to 1 year and over 5 years -
low likelihood
Higher level
Own operations
Lower level
“1.1 Advanced technology and R&D
forming a smart production chain”
Poland, Canada,
USA, Chile
Contractors -
worldwide
Security Policy in the KGHM Polska Miedź S.A.
Group; Privacy Policy (GDPR); Integrated
Management System
The Group has preliminarily defined material, potential and opportunities in accordance with the methodology described
in section IRO-1 Description of the process used to identify and assess material impacts, risks and opportunities. An in-
depth analysis is required to confirm the validity of these opportunities and to assess their impact on financial results.
The results of this analysis will be presented in the coming years. This analysis will be continued as part of the
operationalisation of the strategy in the subsequent reporting periods.
Detailed references to individual impacts and risks and their potential links to the business model, value chain and/or
strategy are included in the relevant sections describing each ESRS sub-topic. Where appropriate, the possibility of
adjusting the strategy or business model has been flagged if the analyses have shown such a need. Nevertheless, in most
situations, it was found that the business model and the Group’s Strategy were designed to provide their stability and
resilience to the factors mentioned above, which is due, among other things, to the application of appropriate processes
and procedures and the implementation of mitigating actions.
Significant impacts and their links with the strategy and business model
A list of significant risks by ESG factors is presented below, along with a detailed description of individual risks, their
potential effects and information on mitigation (the manner of response or the planned manner of response to potential
effects).
Table 107. Risk associated with the environmental factor
ESRS issue
Risk
Assessment
Place of risk
concentration
in the value
chain
E1 - Climate
change
Risk related to the lack of availability of required energy sources.
Risk and description of potential effects
The Group is exposed to the risk of lack of availability of utilities, among
others, energy carriers for its operations. Potential disruption in the supply
of key utilities (mainly energy carriers) is primarily related to risk factors on
the part of external suppliers and breakdowns of their distribution
infrastructure. Risk is also related to the suspension of delivery of energy
carriers as a result of long-lasting droughts, leading to periodically lower
water levels in rivers, which could cause restrictions in the operations of
power plants belonging to KGHM’s suppliers. Amongst internal factors, the
most important involve questions of maintaining operations, utilisation and
investments and modernisation work. The potential impacts relate to losses
associated with reduced/suspended production. Potential financial losses
are related to reduced or suspended production if the risk materialises.
Mitigation
Ensuring back-up systems for the supply of critical utilities and on-going
assessment of the security of the power network. Conducting investment
projects aimed at strengthening energy security. Framework agreements
with utility suppliers increasing the security of supplies. Systematic
limitation of energy consumption under the implemented, ISO 50001
compliant Energy Management System. The planned increase in the
efficiency and flexibility of the Group in terms of its Polish and
international assets, among others by partially satisfying the demand for
electricity from its own sources as well as from renewable energy sources
(“RES”).
Own
operations,
Upstream
Risk of increase in KGHM costs as a result of further increases in the
prices of energy carriers
Risk and description of potential effects
The Group is exposed to risks from external and internal factors,
significantly linked to the increase in operating costs due to the rise in prices
of energy carriers. In 2024, general uncertainty in the financial markets
related to the armed conflict in Ukraine was a factor that could affect the
risk exposure. No significantly negative impact on this account was recorded
during the reported period.
Mitigation
The purchase of electricity is carried out within bilateral contracts,
framework agreements or the Polish Power Exchange (TGE).
Securing the supply of electricity in various periods and on many levels,
using in-house generation, which considerably increases the energy security
of the Company. The Group also carries out ongoing activities to optimise
Own
operations,
Upstream
213
the rise in electricity costs through, for example, the purchase of energy-
saving equipment.
The purchasing policy for electricity and gas fuel has been implemented
for years in the framework of the Standing Purchasing Committee for
electricity, gas fuel and property rights established pursuant to the
Regulation of the President of the Management Board.
Physical climate risk related to adverse climate changes
Risk and description of potential effects
The Group is exposed to climate risk related to the adverse impact of factors
resulting from specific events, in particular those related to rapid (acute) and
chronic weather events resulting from climate change, such as storms,
floods, fires or heat waves as well as permanent changes in weather
patterns, which may disrupt the value chain and the business continuity of
the Group.
The risk is associated with the changes in the conditions of running business
activity or disturbances in the operation of the core production business,
resulting from climate changes and adaptation to such changes. Permanent
changes in weather patterns as a consequence of climate change may also
have the effect of making work more onerous and increasing operational
costs directly related to business activities.
Mitigation
More in Chapter [E1] - Climate change ([SMB-3]and[IRO-1])
Own
operations,
Upstream,
Downstream
Climate risk arising from transitioning to a low-carbon economy that
is resilient to climate change.
Risk and description of potential effects
The Group is exposed to risks arising from the necessity for the economy to
adapt to gradual climate changes, in particular by using low-emission
solutions. The transition risk category includes issues related to legal
requirements, how clients and other stakeholders perceive climate issues,
technological progress towards a zero-emission economy, as well as
changes in demand for and supply of certain products and services whose
production has an adverse impact on climate.
Risks relate to changes in business conditions due to climate change and
adaptation to these changes in the context of the observed challenges faced
by the mining and steel industry.
Mitigation
More in Chapter [E1] - Climate change ([SMB-3]and[IRO-1])
Own
operations,
Upstream,
Downstream
E2 Pollution
Risk associated with the ability to store, discharge, sell or manage
waste
Risk and description of potential effects
The Parent Entity is exposed to the risk of a lack of sufficient tailings storage
capacity at the Żelazny Most Tailings Storage Facility. Risk factors involve the
management and control of the facility, maintaining the technological
regime and meeting environmental requirements. Another source of risk
are external factors with respect to administrative bodies and the
requirement to obtain the necessary administrative decisions for the
functioning of the facility. Some risk exposure is also linked to the possible
unscheduled shutdowns resulting from infrastructure breakdowns, which
may impact the continuity of operation of the Core Production Business
(GCT).
The risk is also related to the increase in waste volume, including the
increase in the weight of raw materials processed in the context of content
of metals and substances processed to products. The limitation or inability
to continue the storage/ management of tailings may result in restrictions
or suspension of operations of the entire facility (or a part thereof).
Mitigation
Preventive measures are taken to ensure that all formal and legal
requirements are met in order to obtain the required administrative
decisions with regard to the implementation of the Żelazny Most Tailings
Storage Facility expansion project. The monitoring of the implementation of
the procedures by offices is carried out and realistic timetables have been
developed for the implementation of activities with the involvement of
specialised staff and management. At the same time, a number of activities
are in progress related to the development of the most optimal and effective
Own
operations,
Downstream
214
model of cooperation with the local community and other stakeholders in
the project.
As part of GCT's operations, work is carried out to upgrade the tailings
transport infrastructure and ensure that the layout is adequately backed up
with the right technological regime during execution.
Advance preparation of landfills and storage sites that comply with legal
requirements is carried out. Segregation of tailings. Research and
development work on further ways of using and managing tailings.
Ongoing monitoring of waste stocks is carried out in order to comply with
the regimes determined by the integrated permits, i.e. within certain limits
and specific rules. Waste records, reports, external reporting and
compliance assessments are carried out.
Risk of exceeding the permissible emission limits set forth in permits
Risk of environmentally hazardous spills
Risk and description of potential effects
The KGHM Group is exposed to the risk of impact on individual components
of the natural environment resulting from the mining activity, followed by
its processing at all stages of the production process, which could lead to
exceeding of permissible emissions limits. The risk also relates to leakages
which can extend beyond the company and result in negative
environmental impacts, leading to penalties and compensation for potential
environmental damage. The financial effects simultaneously represent the
costs associated with investments enabling, among other things, the
detection of environmental leakages in multiple locations or the costs
associated with the need to stop a leakage, e.g. as a result of an accident
and in the extreme case, the costs of shutting down the operation of an
installation as a result of an administrative decision. Materialisation of the
risk may also adversely affect KGHM's reputation.
Mitigation
The smelter divisions of KGHM Polska Miedź S.A. have been included in the
Air Protection Programme (POP) since 2015. In view of the legal
requirements in force, KGHM Polska Miedź S.A. has developed the BATAs
investment program adapting metallurgical installations to the
requirements contained in the BAT conclusions, thereby reducing emissions
of pollutants, in particular arsenic emissions. The installations belonging to
the Group are obliged to monitor emissions of pollutants to the extent
established in the relevant permits, which now also include the
requirements of the BAT Conclusions. Emission monitoring allows to
confirm that installations are emitting pollutants in quantities admitted by
the permits.
Preventive measures include leakage detection kits available at each site,
an environmental incident management system and a standard of
operations, maintenance and surveillance for facilities management.
Relevant equipment standards and leakage detection protocols also apply.
Own operations
Risk of inability to manage increased mine water inflows
Risk and description of potential effects
The Company is exposed to the risk of natural hazards and force majeure in
the form of underground water hazards resulting from breakdowns of the
main drainage equipment, human error (actions contrary to the project or
technology) or mistaken geological conclusions.
Unfavourable hydrogeological conditions may lead to a reduction in activity
(e.g. a reduction in mining) or increased costs associated with, among
others, the management of increased water inflows at the Żelazny Most
facility. Exposure to risk is increased by climate factors associated with
periodic droughts and the low level of the Odra River.
Mitigation
The Company carries out extensive risk mitigation on many levels by, among
other things, recognising hydrogeological conditions and water hazards,
carrying out a water balance from inflow to mine workings, carrying out
mining work in accordance with the technology for safe mining work in
underground mines, systematic inspection of workings at risk of water
intrusion, controlling the condition of water flow paths and water dams
according to a specific schedule. The activities of the Water Hazard Team
continue, among other things, with regard to the ongoing assessment of the
Own operations
215
water hazard status for mining works and the adaptation of prevention.
Rock mass injection is carried out to reduce inflow and stabilise the layers
above the workings. Measures have been taken to adjust the drainage
capacity to the expected projected (updated) inflows. A reserve of main
drainage pumps is built to maintain operating continuity of the pumping
station.
Development of regional pump stations and the piping system, construction
of water dams aimed at stopping water inflow, drilling exploratory holes to
stabilise uncontrolled water inflow. In order to mitigate the risk, the project
entitled “Construction of the main drainage system in the area of the SW-4
shaft” is continued, which should ultimately increase the capacity of mine
draining.
Securing access to system functionality and preventing data loss as part of
the approach used in the area of IT/OT systems.
Conducting the monitoring of hydro-technical conditions and the technical
performance of facilities and infrastructure. Ongoing modernisation,
refurbishment, procedure in accordance with the operating instructions.
Exploring technological and organisational options for reducing the
amount of water retained in the Żelazny Most facility and for alternative
management of this water. With the current level of underground water
inflows, in order to maintain the safety of the Żelazny Most Tailings
Storage Facility and consequently mitigate risks, water discharges are
carried out in accordance with and within the limits of the water rights
permits held.
E3
Water and
marine
resources
Interruption in the supply of key utilities - industrial water
Risk and description of potential effects
The Group is exposed to the risk associated with the lack of availability of
utilities for its operations. Amongst internal factors, the most important
involve issues of maintaining operations, utilisation and investments and
modernisation work. The potential impacts relate to losses associated with
reduced/suspended production. As a result of risk materialisation, industrial
water supply interruptions and the inability of water-using installations and
units to operate (e.g. cooling of metallurgical units) may occur. The risk is
associated with the physical climate risk, which includes risks resulting from
the low level of the Odra River. Potential financial losses are related to
reduced or suspended production if the risk materialises.
Mitigation
Activities in the framework of the water permit and care for the technical
condition of the transmission infrastructure. Reliable design of water
networks for new developments, renovations. Safeguarding the operation
of water systems during freezing weather. Research and development
activities aimed at reducing industrial water consumption. Securing the
transmission infrastructure against accidental damage during
construction, earthworks (work not directly related to infrastructure
maintenance). Emergency procedures including the description of the
procedure to be followed in the event of the low level of the Odra River.
Own
operations,
Upstream
Risk related to the lack of availability of required energy sources.
Risk and description of potential effects
The Group is exposed to the risk of lack of availability of utilities, among
others, energy carriers for its operations. Potential disruption in the supply
of key utilities (mainly energy carriers) is primarily related to risk factors on
the part of external suppliers and breakdowns of their distribution
infrastructure. Risk is also related to the suspension of delivery of energy
carriers as a result of long-lasting droughts, leading to periodically lower
water levels in rivers, which could cause restrictions in the operations of
power plants belonging to KGHM’s suppliers. Amongst internal factors, the
most important involve questions of maintaining operations, utilisation and
investments and modernisation work. The potential impacts relate to losses
associated with reduced/suspended production. Potential financial losses
are related to reduced or suspended production if the risk materialises.
Mitigation
Ensuring back-up systems for the supply of critical utilities and on-going
assessment of the security of the power network. Conducting investment
projects aimed at strengthening energy security. Framework agreements
with utility suppliers increasing the security of supplies. Systematic
limitation of energy consumption under the implemented, ISO 50001
Own
operations,
Upstream
216
compliant Energy Management System. The planned increase in the
efficiency and flexibility of the Group in terms of its Polish and
international assets, among others by partially satisfying the demand for
electricity from its own sources as well as from renewable energy sources
(“RES”).
E4
Biodiversity and
ecosystems
Risk of inability to manage increased mine water inflows
See above: E3 Water and marine resources
Own operations
E5
Circular
economy
Lack of relevant permits for waste collection and treatment, or loss of
those already held
See above: E2 Pollution
Own
operations,
Upstream,
Downstream
Risk associated with the ability to store, discharge, sell or manage waste
See above: E2 Pollution
Own
operations,
Upstream
Risk of inability to manage increased mine water inflows
See above: E4 Biodiversity and ecosystems
Own operations
Table 108. Risk associated with the social factors
ESRS issue
Risk
Assessment
Place of risk
concentration
in the value
chain
S1
Own employees
Changes in the Changes in Occupational Exposure Limits (OEL) and Maximum Allowable Biological
Concentration (MAC) for lead and its inorganic compounds as well as for diisocyanates.
Risk and description of potential effects
Risk associated with the published Directive 2024/869 amending Directive 2004/37/EC of the European Parliament
and of the Council and Council Directive 98/24/EC as regards the limit values for lead and its inorganic compounds
and for diisocyanates. The Directive published new reduced values of hygienic standards for lead. The risk implies,
among others, an increase in the costs of providing workers with Personal Protective Equipment, an increase in the
costs of monitoring the occupational environment and the costs of adapting the installations of KGHM Polska Miedź
S.A. to the new requirements. At the same time, an interim period was established to allow Member States sufficient
time to effectively update their production processes and implement the necessary preventive and protective
measures.
Mitigation
A team was appointed to coordinate the activities related to the preparation of the divisions of KGHM Polska Miedź
S.A. for the changes in the hygienic standards for factors hazardous to health. In connection with the amendment to
the Directive, the team prepared a new "Programme for the reduction of lead absorption by the employee's body" at
the KGHM Polska Miedź S.A. smelters.
Own
operations
Table 109. Risk associated with the corporate governance factors
ESRS issue
Risk
Assessment
Place of risk
concentration
in the value
chain
G1 Business
conduct
Risk of non-compliance with established rules and standards of conduct
in the area of anti-corruption
Risk and description of potential effects
The Group is exposed to the risk of harmful actions taken by external entities
participating in the procurement, sales and investment processes. The threat
refers to potential losses by the Group resulting from the intentional actions
of external entities, e.g. collusion on prices, the insufficient technical and
economic potential of contractors, falsification of documentation, fictional
contractors, conflicts of interest. Other important risk factors include threats
as regards all types of irregularities related to breaching anti-corruption and
ethical standards (such as corruption, conflicts of interest, abuse,
Own
operations,
Upstream,
Downstream
217
discrimination, illegality, nepotism) and human rights violations (such as child
labour, forced labour, modern slavery, womens’ rights).
Mitigation
Implementation of the Code of Ethics of the KGHM Polska Miedź S.A. Group
as the main tool in the corporate culture of the Group, and other appropriate
policies and procedures ensuring the efficiency of implemented principles and
values. Application under the Responsible Supply Chain Policy of guarantees
of the selection of responsible suppliers, especially in the case of acquiring so-
called conflict minerals and ensuring that the goods and services acquired by
the Group will not be used to finance terrorism, and that they will be
manufactured or provided while respecting human rights, labour standards,
environmental protection and counteracting corruption. Proactive monitoring
and analysis of procurement processes in terms of identifying abuse and
threats of corruption within the organisation and the supply chain, as well as
undertaking actions with respect to ethics and counteracting corruption along
with the implementation of corrective actions. Internal control with respect to
the identification and detection of fraud, abuse and corruption in the Group’s
entities and prevention of such phenomena based on the Internal Control
Procedure in order to eliminate risk at the level of prevention. Compliance
management as part of a comprehensive compliance management system.
The Group implemented the Anti-Corruption Management System (SZDA)
compliant with the ISO 37001 standard, resulting in the adoption of an Anti-
Corruption Policy and a number of procedures regulating, inter alia, the
principles of handling business gifts, situations bearing the features of
corruption or conflicts of interest.
Moreover, the Group has procedures in place with respect to violation of the
law resulting from the Act of 14 June 2024 on the protection of
whistleblowers in conjunction with the provisions of Directive (EU) 2019/1937
of the European Parliament and of the Council of 23 October 2019 on the
protection of whistleblowers reporting the violation of the Union law.
With regard to the current financial impacts related to the ESG risks described above, expenditure was recorded in 2024
as part of investments and ongoing preventive measures regarding the management of increased water inflows from
mines (Tailings Division). The activities were carried out within available financial resources and did not have a material
impact on KGHM's financial position, financial performance or cash flows.
At the same time, no material ESG risks have been identified where a significant risk of a material adjustment exists in
the next annual reporting period to the carrying amounts of assets and liabilities reported in the related financial
statements.
The goals of Corporate Risk Management in the KGHM Polska Miedź S.A. Group are consistent with the adopted Strategy
of the KGHM Polska Miedź S.A. Group. They are shaped by global megatrends and determine the environmental
challenges to be faced by the KGHM Polska Miedź S.A. Group. Risk identification as part of the strategic management
process aims to consider the context of the organisation in an integrated way and provide information on the risks
associated with the implementation of the Strategy in specific areas. In accordance with the process in place, the Strategy
Risk Map is updated annually as a graphical representation of the results of the risk assessment. Identified risks at the
strategic level are decomposed into a corporate risk level and a project and program risk level, allowing for effective
management of individual risks. As part of the strategic management on the subject of analysing the resilience of the
strategy in terms of its counteraction to material ESG risks, it is planned to take into account systematically the results of
the dual materiality assessment made over three time horizons (following the approach described in section IRO-1
Description of the process used to identify and assess material impacts, risks and opportunities. Moreover, it is intended
to introduce periodic analysis of information on the impact of ESG trends on KGHM, including information on their
potential impact on KGHM's business model.
As part of the corporate risk management process, an element that provides another important tool to enable KGHM to
adapt and adjust its strategy and business model to issues associated with material ESG risks are the Adaptation
Measures under Stage IV of the process (Analysis and Response). The Adaptation Measures are understood as a change
of conduct in the scope of the specific risk management, i.e. organisational, process, system, strategic and other changes
aimed at reducing the level of that risk.
The approach applied allows the strategy and business model to be appropriately aligned and updated to address
material ESG risks and related activities in this area associated with the selection of the scope of individual strategic
initiatives and projects.
218
Linking receipts to the entity's ongoing strategy and business model
KGHM Polska Miedź S.A. takes into account the impact of its activities on the environment and society in its strategy and
business model, aiming at sustainable development in the context of both environmental protection and care for social
interests. The Company's positive and negative impact on the environment and society is directly related to the business
model that shapes it. At the same time, the Company strategy is developed with the key elements of this model in mind,
penetrating through the stages of the value chain. As a result, the business model and strategy remain in a close, dynamic
relationship, interacting with each other and forming an interdependent and continuously interacting system.
The strategic planning and strategy development process is preceded by a comprehensive analysis of the environment,
impacts, opportunities and challenges, so that the final document responds to these aspects. At the same time, the
current shape of the business model as well as the value chain and associated impacts, significantly determine the nature
of the strategy.
Table 110. Key aspects related to KGHM's impact on the environment and society
Category/Area
Scope of operations
Sustainable
development and
decarbonisation
KGHM is committed to green transformation, which is reflected in the Company's strategy. One of the main
objectives is to reduce CO
2
emissions by improving energy efficiency and investing in renewable energy
sources. The drive towards decarbonisation is an integral part of the Group's development plans, and the
Company is also committed to designing production processes with low climate impact.
Environmental
protection
As part of its activities, KGHM is committed to mitigating its negative impact on the environment, including
through appropriate management of waste, wastewater and emissions from production processes. The
Group implements innovative technologies to reduce the consumption of natural resources and improve
energy efficiency. As part of its environmental protection activities, KGHM also undertakes initiatives related
to the rehabilitation of post-mining areas.
Community
involvement
and cooperation
with stakeholders
KGHM aims to build sustainable and responsible relationships with stakeholders, including local
communities, employees, NGOs, public administration and customers. The Group conducts consultations
and engages with local communities, supporting education, health and community initiatives. KGHM
organises social support and development programs , including through creation of new jobs, and supports
projects to improve the quality of life in the regions where it operates.
Addressing risks
and transparency
The Group is committed to transparency and accountability in order to minimise the risks associated with
industrial activities and their impact on the environment. The Company regularly reports on its corporate
social responsibility (CSR) and environmental impact activities. KGHM cooperates with external organisations
and institutions to ensure compliance with environmental and social standards.
Table 111. Analysis of the impacts, both positive and negative, of KGHM's activities by stage in the value chain
Value chain
stage
Positive impact
Negative impact
Exploration
− Effects resulting in expansion of the resource base are a
major factor in maintaining/increasing mining levels in
the long term. At the same time, the results of
exploration determine the level of employment in the
Group and in local companies cooperating with the
Group.
− Exploration basically does not have a significant
negative impact on the environment and the local
community. In 2024, no habitat disturbance, land
erosion, water pollution, dust or noise emissions
occurred at the indicated phase. In the longer term,
exploration may lead to displacement or impacts on the
landscape; however, the Company assesses the risk of
their occurrence as low.
Mining
Ore
enrichment
Smelting and
refining
− Conducting mining, processing and smelting activities in
2024 allowed for maintaining and creating new jobs,
both in KGHM and in cooperating companies.
− The operation of the company therefore directly
translates into an economic contribution, supporting
local development (e.g. through the expansion of
infrastructure by the local government, to which taxes
are paid, education of young people - future employees)
and national development (e.g. tax on extraction of
certain minerals).
− The production of electrolytic copper enabled marketing
of a top quality raw material with application in many
fields, including green transformation projects,
electronics or medicine.
− Copper is the key material in renewable energy
technologies such as wind turbines, solar panels and
electric vehicles. The development of these sectors is
supported by copper mining as it provides the raw
material needed for these technologies, contributing to
the transition towards a more sustainable energy
future.
− The mining and processing of copper ores involves
negative environmental impacts. Natural habitats may
suffer, which in turn can translate into a loss of
biodiversity and the disruption of the population of
fauna and flora.
− Copper acquisition can result in the release of heavy
metals and other pollutants into nearby water sources.
On the other hand, the disposal of mining waste,
including flotation waste, can lead to soil degradation.
− The processing and smelting processes used to extract
copper from ore can result in the release of air
pollutants.
− In some cases, activities directly and indirectly related to
mining may require the clearing of forests for
infrastructure development. Deforestation contributes
to landscape disturbance, loss of carbon sinks, increases
greenhouse gas emissions and has a negative impact on
biodiversity.
− Pollutant emissions are maintained under the relevant
environmental permits.
219
− The by-products of the copper production process (e.g.
precious metals, molybdenum, rhenium) offer a range
of products that are indispensable to many industries in
contemporary economy.
− Parallel to its technological activities, KGHM supported
initiatives in the area of corporate social responsibility,
investing, among other things, in educational or pro-
health projects.
− KGHM's technological processes require substantial
amounts of energy, which still mainly originates from
fossil fuels, translating into the consumption of non-
renewable resources.
− Furthermore, pollution associated with mining may
pose health risks to workers and local communities.
− In addition, the dominant role of mining in the region is
conducive to reduced economic diversification, which
may negatively affect economic stability in the long
term.
Processing
− The processing of copper into new forms allows a wider
range of uses for the raw material by diverse groups of
users.
− The advancement of processing in KGHM allows access
to markets close to the end customer (cooperation with,
among others, manufacturers of cables, wires, flat bars
and copper profiles).
− During the processing of electrolytic copper into further
forms, emissions of pollutants to the environment
occur, accompanied by high energy consumption, with
coal still prevailing in the energy mix in Poland.
Sales
− Sales of the Group's main products in 2024 provided
steady, stable revenue allowing high-grade raw material
to be made available for a wide range of applications.
− Moreover, the company's activities translated into the
economic development of the country through the
payment of due taxes.
− Logistics associated with the sale of bulk products can
have a negative impact on the environment (carbon
footprint of transport) or local communities (noise,
dust).
Restoration
− The overarching goal of restoration is to improve the
quality of the environment, at best beyond the
framework imposed by regulations.
− Responsibly planned and executed reclamation is key to
restoring a degraded site and can deliver significant
benefits to the natural environment and the local
community.
− Introducing plant or animal species as part of
restoration can disrupt local ecosystems and pose a
threat to natural biodiversity.
− Temporary disruptions associated with, for example, the
operation of heavy equipment may occur when
conducting the work involving restoration processes.
Inadequately performed rehabilitation may lead to
destabilisation of the ground - land
settlement/slumping.
Anticipated financial impact of material risks and opportunities in the context of strategy and governance
The Company, in accordance with its decision, is exercising its option in the current year to omit the disclosure set out in
ESRS 2 SBM-3 point 48(e) regarding the anticipated financial impact of significant risks and opportunities on the
Company's financial position, financial performance and cash flows in the short, medium and long term, including a
reasonably expected time horizon for these impacts.
Significant climate risks and their links with the strategy and business model
As part of the third stage of the risk management process (Analysis and Response), an in-depth cause-and-effect analysis
is carried out, part of which is, among other things, a resilience analysis containing ways of dealing with the risks which,
in line with the assumptions of the corporate risk management process, is intended to enable a decision to maintain or
possibly change the current management. The directional decision is called Risk Response and, in the case of climate risk,
is related to an individual's ability to adapt to the uncertainty associated with climate change, in other words to climate
resilience and mitigation of that risk.
The analysis covered all key types of risks identified in the climate risk category associated with the adverse impact of
climate change on the activities of KGHM Polska Miedź S.A. The results of the analysis reflect the status as at 31 December
2024, while the analysis was carried out taking into account the three time horizons shown in the table below. The time
perspectives applied are adjusted to the scenario analyses used.
Table 112. Time perspectives used in the analysis
Symbol
Time perspective
Period
Years
›
Short
up to 1 year
2025-2026
››
Medium
1 to 5 years
2026-2031
›››
Long
over 5 years
2031-2050
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Diagram 48. Potential change in the level of impact of climate risk on KGHM by time horizon
- impact unchanged
- potential increase in impact
- potential decrease in impact
Below a description of the identified key risks in the climate risk category associated with the adverse impact of climate
change on the activities of KGHM Polska Miedź S.A. is presented. The table presents detailed information taking into
account, among other things, the results of the resilience analysis, including the results of applying the scenario analysis.
Physical climate risk
Table 113. Acute physical risk related to sudden weather events resulting from climate change.
Risk
Description of risks and risk factors
Mitigation
Acute physical
risk related to
sudden weather
events resulting
from climate
change.
In the corporate risk management process (which includes analysis
of physical scenarios – medium and high emission), the following
key factors have been identified that may cause materialisation of
acute physical risk:
Temperature risk
Water and rainfall
risk
Wind risk
Other
Heatwaves
Accumulated dry
days (draught)
Strong
Lightning
Very frosty days
Heavy daily
rainfall
Thick snow cover
Material (key) risk factors
Materialisation of this risk may have an adverse impact on both the
infrastructure and on working conditions and employee safety.
Acute weather events as a consequence of climate change may
result in restrictions in operations both as a result of damage to
infrastructure and the occurrence of temporary hindrances and
interruptions in individual elements of the value chain (e.g. utility
supply, logistics disruption). In relation to the KGHM core business,
the material (key) factors include:
− days without precipitation (droughts) due to, among other
things: potential limitations in access to water for the needs of
the core business and the level of the Odra river, which affects
the quantity and method of utilising process water;
− Monitoring of weather forecasts (also the
status of the Odra River). Current
readings of water quality status at the
Żelazny Most Tailings Storage Facility.
Constant maintenance of pumps and the
need to maintain reserves.
− Ongoing and planned measures to
reduce the quantity and improve the
quality of industrial water in process
circuits.
− Ongoing and planned measures to
reduce process and mine water in the
Żelazny Most Tailings Storage Facility.
− Monitoring the compliance of the
activities undertaken with the permits
issued.
− Appointment of task forces and expert
teams in the area of counteracting the
effects of the materialized extreme
weather events on business continuity
and development of instructions on the
procedure in case of emergency
situations.
− Ongoing communication and cooperation
with utility suppliers concerning potential
supply interruptions.
− Periodic overhauls of key infrastructure
equipment on the basis of
predetermined schedules.
− Preventive management of key
infrastructure elements affecting
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− strong/violent winds that may cause interruptions in the supply
of electricity or other utilities (e.g. as a result of damage to
transmission networks).
For KGHM International, the greatest exposure relates to factors
associated with very cold days, thick snow cover, heavy daily
precipitation, days without precipitation (droughts) and
strong/fierce winds. The potential materialisation of the risk in
question may involve increased costs relating to the remedying of
the adverse consequences of risk materialisation in the form of
increased operating costs, maintenance work, energy consumption
and other losses, e.g. associated with the suspension of production.
The consequences of such materialisation are examined on a case
by case basis for the individual elements of the value chain of KGHM
Polska Miedź S.A.
production continuity and application of
crisis response procedures.
− Active search for technical and
technological solutions to reduce the
negative impact of operations on the
climate, including technologies that
enable remote control and reduce
response times.
− Ongoing monitoring of the microclimate
parameters and introduction of remote
control and visualisation and surveillance
systems in workplaces with particularly
adverse climate parameters.
− Division of KGHM Polska Miedź S.A. The
Emergency Mine-Smelter Rescue Unit
(JRGH) ensures the safety of employees
and provides comprehensive assistance
in dealing with the effects of natural
hazards and acute physical events
associated with climate change, while
ensuring the safety of people and
facilities.
Chronic
physical risk
related to
permanent
changes in
weather
patterns
resulting from
climate change
In the scope of corporate risk management process (including the
analysis of physical scenarios – medium and high emission), factors
have been identified that may cause materialisation of chronic
physical risk.
Temperature risk
Water and rainfall risk
Wind risk
Change in average daily
temperature
Change in total
precipitation
Change of wind intensity
Change of
cooling/heating degree
days (hot/cool–
temperature above/below
18°C)
Change in the number of
days with snow cover
Material (key) risk factors
Materialisation of this risk may lead, among other things, to
changes in the conditions in which the operations must be
conducted, interruption of business continuity of the Core
Production Business, including higher and faster depreciation of
infrastructure components than before. Permanent changes in
weather patterns as a consequence of climate change can also
increase the onerousness of work (e.g. as a result of changes in the
average daily temperature, changes in wind intensity, changes in
the number of days with snow cover) and consequently necessitate
the provision of additional personal protective equipment and
reorganisation of work. The potential materialisation of this risk
may involve increased costs relating to the upgrading or
replacement of individual infrastructure components and
increased costs of higher consumption of energy used, for example,
for cooling processes. The consequences of such materialisation
may be presented for the individual elements of the Parent Entity’s
value chain.
− Periodic overhauls and comprehensive
modernisation of key infrastructure
equipment on the basis of
predetermined schedules and/or
investment plans.
− Maintaining the required level of
supporting/alternative facilities and
infrastructure elements (e.g. power
generators, photovoltaic infrastructure,
retention infrastructure).
− Systematic limitation of energy
consumption under the implemented,
ISO 50001:2018 compliant Energy
Management System. Planned increase in
the efficiency and flexibility of the KGHM
Polska Miedź S.A. Group in terms of
Polish and international assets, among
others by partially satisfying the needs
for electricity from its own sources as well
as from renewable energy sources
(“RES”).
− Development of own zero- and low-
emission sources in the short and
medium term including construction and
acquisition of photovoltaic and wind
power plants.
− Diversification and the pursuit of
sustainable development through the
construction of own generation capacity
from low-emission sources is also one of
the initiatives of the adopted Strategy of
the KGHM Polska Miedź S.A. Group.
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Transition-related climate risk
Table 114. Transition-related climate risk
Risk
Description of risks and risk factors
Mitigation
Regulatory risk
related to
changes in legal
requirements
concerning
climate change
and adaptation
to its effects.
The increasingly stringent legal requirements
governing climate change issues can directly and
indirectly affect the operations of KGHM Polska Miedź
S.A. This pertains to both European regulations as well
as requirements at the domestic level, which will be
effectively enforced. This may be materially impacted
by the planned full implementation of the European
Green Deal in domestic documents and
climate/energy frameworks till 2030 and fulfilment of
the EU’s climate neutrality objective by 2050. An
incorrect interpretation or a failure to observe new
regulations may potentially result in non-compliance
with the law, exposure to court disputes or sanctions.
New legal regulations may also cause interruptions in
operations or the necessity to reorganize work and
consequently may substantially impact the operations
of the KGHM Polska Miedź S.A. Group, among others,
taking into consideration:
− Regulation (EU) 2020/852 of the European
Parliament and of the Council of 18 June 2020 on
establishing a framework to facilitate sustainable
investment - technical criteria for the copper
mining and smelting industry for the Sustainable
Finance Platform are to be prepared on the basis
of the adopted regulation,
− Clean Industrial Deal - currently as a general EU
policy for European industry to develop into a
package of legislation,
− EU Action Plan for a Circular Economy - The new EU
Action Plan for Circular Economy, as announced by
the President of the European Commission, is
expected to be adopted by 2029.
Closely linked to regulatory risk are the reputational,
technological and market risks described in the
following section. The costs of complying with the
aforementioned legal requirements can therefore
relate to both investment and operational expenses
related to, inter alia, technology, ensuring the
appropriate standards expected and/or required in
the market or building the company's image.
− As part of the Corporate Risk Management process
in the KGHM Polska Miedź S.A. Group, each
identified risk is assessed in terms of impact on
Laws and Regulations (assessment of the
compliance of occurrences with the applicable laws,
the necessity to participate in proceedings before
public administration authorities responsible for
supervision and regulation and potential sanctions
resulting from such proceedings).
− A consistent compliance system in place in the
KGHM Polska Miedź S.A. Group is an element of
effective management as part of corporate
governance through, for example, a more efficient
response and readiness for regulatory changes,
care for reputation and ethical culture building in
the organisation as well as awareness raising and
enhancement of the sense of responsibility for
compliance among employees.
− Active participation of KGHM employees in
commenting on draft legislation and providing
positions and opinions as part of membership of
organisations at the national and EU level.
− Exercising due diligence in monitoring changes in
regulations, reporting standards for greenhouse gas
emissions and climate issues and the direction of
climate change reported by scientific institutions.
− Identification and taking pre-emptive actions in
order to adapt to organisational, infrastructural
and technological changes.
Technological
risk related to
the
technological
progress
towards a low-
emission
economy
The EU’s ambitious climate targets and the existing
pressure on the implementation of new low-carbon
solutions and the search for reduction of CO₂
emissions in order to achieve the approved emission
goals may have a direct impact on KGHM Polska Miedź
S.A.’s activities. The need to make the necessary
investments and/or a potentially sudden reduction in
carbon dioxide emissions in a relatively short period of
time may generate considerable costs and difficulties
in adapting new solutions to the technology that is
used currently, associated with the core business
operation. As a result of the necessary changes, the
level of complexity of production activities in the new
conditions and the increased technical, economic or
legal requirements for the Company will rise at the
same time, resulting in the need for KGHM Polska
Miedź S.A. staff to continuously and dynamically
increase their qualifications. One of the factors
determining the possibility of implementing the
developed solutions is the redirection of financial
resources in the private and public (subsidy) market,
which follows climate targets, which may favour
companies quickly implementing pro-environmental
innovations (including KGHM's competitors), thus
− Ongoing monitoring of policy changes intended to
reduce CO₂ emissions and the potential tightening
of regulations, analysis of market standards,
technological innovations, opportunities for using
alternative energy sources (RES). Taking pre-emptive
actions to adapt to changes
− in the technological area. Monitoring the activities of
competitors and related industry players (e.g. steel
industry). Research market observation, technology
scouting. Continuous monitoring of ongoing calls for
projects financed from national and European
funds, which could be used to finance research or
investment projects of KGHM Polska Miedź S.A. in
the area of climate transformation.
− Since most of the technology is in early
advancement stage, it is assumed that by 2030
KGHM Polska Miedź S.A. will focus its efforts
primarily on the continuation or launch of research
and development work in selected areas, as well as
on launching pilot projects. Full implementation of
new innovative solutions, leading to achievement of
the expected decarbonization effects in the direct
emissions area, will be effected in 2030-2050.
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increasing their competitiveness against KGHM. Due
to the rise in popularity of topics related to the
progress towards a low-carbon economy, an increase
is seen in the importance of decarbonisation
technology providers and a significant increase in
demand for their services.
In the case of a decision to use solutions offered on the
market, the availability of suppliers within the required
timeframe may be limited and the need to wait a long
time for the procurement of services or goods
necessary for the implementation of new technologies
may arise, thus extending the project implementation
period.
− A key area is the reduction of greenhouse gas
emissions from smelting processes that use KGHM's
own concentrate. The planned solution in this
respect is the construction and commissioning of a
carbon capture facility, i.e. a CCS plant. To this end,
analyses are being carried out on technologies for
capturing carbon dioxide from industrial
installations, which are expected to enable
significant reductions in its emissions from the
Company's smelting processes. In 2024, as a result
of technical analyses and study visits to various
functioning CO2 capture installations in Europe, a
CO2 capture technology that could be used in the
smelting processes of one of the divisions of KGHM
Polska Miedź S.A. was selected. Work and analysis
on the feasibility of implementation continues.
− Ability to use external sources of funding/financing
for projects and R&D work in the implementation or
exploration of new technologies and systems that
will reduce the environmental impact of GCT
processes through their implementation.
− Acquisition and construction of own emission-free
electricity generation sources in order to use the
electricity produced in them to reduce carbon
dioxide emissions in scope 2 and shorten the
carbon footprint of final products supplied to the
market by KGHM Polska Miedź S.A. (wire rod,
cathodes, silver, gold, lead, etc.).
− Implementation of projects consistent with the
KGHM Strategy, Decarbonisation Program or
assumptions of the Energy Transformation in
cooperation with both commercial partners and
scientific and research centres (domestic and
international).
− Establish an effective organisational structure within
KGHM that ensures comprehensive handling of
identified technology risks
Market risk
associated with
changes in
demand for and
supply of
certain
products and
services.
The increase in stakeholder expectations and
awareness of ESG (including climate) issues raises risks
in aligning offerings with these requirements:
− The possibility of losing part of the market if the
adaptation of the offer to the new standards is not
effective.
− Linked to regulatory risk - an increase in ESG-
related regulation (e.g. CO2 emissions,
environmental standards, ethical labour standards)
can affect companies' ability to offer compliant
products. These changes may include new
provisions on sustainability, social responsibility or
transparency in governance. Companies that do not
manage to comply with the new regulations may
lose market shares, face financial penalties and
encounter difficulties in accessing markets and
sources of finance.
− Linked to technology risk - high investment and
operating costs of sustainable technologies and
changes in production processes.
− Linked to reputational risk - potential criticism from
consumers, investors or the media can affect
changes in demand.
− Continuous analysis of stakeholder expectations
(e.g. trading partners, investors, financial
institutions) regarding ESG issues (including climate
and environmental issues) and consideration of
these issues in a long-term, strategic perspective.
− Alignment with ESG regulations (reporting and
reporting, emissions disclosures, ESG certifications
at both organisational and individual product level).
− Mainstreaming sustainability (including climate
change issues) into investment processes.
− Monitoring of supply chains on ESG topics.
− Education campaigns within the organisation on
sustainability and stakeholder engagement to adapt
offerings to changing consumer preferences.
Reputation risk
related to
perception of
clients and
other
stakeholders –
how they view
the activity of
the KGHM
The KGHM Polska Miedź S.A. Group is exposed to the
risk of increasing expectations of stakeholders (e.g.
investors, customers, ESG rating agencies) towards the
Company with respect to reduction of its impact on
climate resulting in a deterioration of the Company's
image and/or loss of stakeholder confidence.
Potential difficulties in attracting customers,
employees, business partners and investors if the
− Care and due diligence in identification of
expectations and requirements of external
stakeholders concerning the climate and
environmental issues.
− Establishing commercial and business relationships
with entities who declare an attitude of caring about
environmental protection and compliance with
existing laws in this regard.
224
Polska Miedź
S.A. Group in
the context of
climate change.
KGHM Polska Miedź S.A. Group’s activity is considered
to be harmful to the climate. In extreme cases, the
materialisation of this risk may lead to the blocking of
development plans.
− Increasing the awareness of climate change in the
organisation and improvement of communication
with all stakeholders in this respect, among others
through the improvement in the quality of reporting
on climate-related information after climate
reporting was launched.
− Implemented and improved effective system for
resolving sustainable development themes (ESG) in
the form of regular meetings of the Sustainable
Development Council.
− An organisational unit operates in KGHM's structure
responsible for ESG issues.
The goals of Corporate Risk Management in the KGHM Polska Miedź S.A. Group are consistent with the adopted Strategy
of the KGHM Polska Miedź S.A. Group. They are shaped by global megatrends and determine the environmental
challenges faced by the KGHM Polska Miedź S.A. Group. The Strategy of the KGHM Polska Miedź S.A. Group identifies,
among others, the climate objectives related to KGHM Polska Miedź S.A.’s emissions reduction, which are consistent with
the Climate Policy of KGHM Polska Miedź S.A., i.e:
− the overarching goal: to achieve climate neutrality by 2050 by the Company, as the parent entity of the KGHM Group,
with respect to Scope 1 and Scope 2 greenhouse gas emissions,
− the interim target: to reduce combined Scope 1 and Scope 2 emissions by 30% by 2030 compared to 2020 emissions.
The strategic management process is accompanied by an appropriate risk analysis that takes climate risks into account.
Risk identification as part of the strategic management process aims to consider the context of the organisation in an
integrated way and provide information on the risks associated with the implementation of the Strategy in specific areas.
In accordance with the process in place, the Strategy Risk Map is prepared and presented annually as a graphical
representation of the results of the risk assessment. The Strategy Risk Map incorporating climate risks, evaluates the
impact of the climate change risks identified in KGHM on the individual strategic areas over the three time horizons within
the scenario analyses used. The approach applied allows the strategy and business model to be appropriately aligned
and updated to climate change and related activities in this area associated with the selection of the scope of individual
strategic initiatives and projects.
Identified risks at the strategic level are decomposed into a corporate risk level and a project and program risk level,
allowing for effective management of individual risks. As part of the corporate risk management process, an element that
provides another important tool to enable KGHM to adapt and adjust its strategy and business model to climate change
are the Adaptation Measures under Stage IV of the process (Analysis and Response). The Adaptation Measures are
understood as a change of conduct in the scope of the specific risk management, i.e. organisational, process, system,
strategic and other changes aimed at reducing the level of that risk.
Significant impacts, risks and opportunities and their links with the strategy and business model in the area of
biodiversity
The KGHM Group, when embarking on an analysis of its material impacts, risks and opportunities and their
interrelationship with its strategy and business model, identified biodiversity-sensitive areas in the vicinity of which the
225
Group conducts business. The identification of the sites in question was based on the definition of the term 'biodiversity
sensitive areas' in the ESRS standard.
Areas of high natural habitat or landscape value, covered by various forms of protection schemes, are located from a few
to over a dozen kilometres away from the Group’s operating sites, amongst which it is worth noting the following:
Nature 2000 Special Bird Protection Areas:
− “Łęgi Odrzańskie” PLB020008 (11 km - Tailings Division, 2 km - Cedynia Wire Rod Plant, 7 km - Głogów Copper Smelter
and Refinery, KGHM Metraco S.A., “Energetyka” Sp. z o.o.).
Nature 2000 Special Habitat Conservation Areas:
− Kozioróg in Czerna PLH020100 (2.7 km - Głogów Copper Smelter and Refinery, KGHM Metraco, "Energetyka" Sp. z
o.o.),
− “Łęgi Odrzańskie” PLH020018 (11 km - Tailings Division, 2 km - Cedynia Wire Rod Plant, 7 km - Głogów Copper Smelter
and Refinery, KGHM Metraco S.A., “Energetyka” Sp. z o.o.).
− “Pątnów Legnicki” PLH020052 (9 km - Legnica Copper Smelter and Refinery, KGHM Zanam, KGHM Metraco S.A.,
"Energetyka" Sp. z o.o.).
− Tarnowskie Góry-Bytom Underground Area PLH240003 (13.5 km - Walcownia Metali Nieżelaznych "Łabędy" S.A.)
− Ponds in Brzeszcze PLB120009 (4.6 km - Nitroerg S.A.)
− Mała Panew Valley PLH160008 (0.5 km - Nitroerg S.A.)
Nature reserves
− Buczyna Jakubowska (within the licensed area of the Polkowice-Sieroszowice Mine),
− Uroczysko Obiszów (within the licensed area of the Polkowice-Sieroszowice Mine),
− Żukowskie Śnieżyce (within the licensed area of the Rudna Mine),
− Skarpa storczyków (approx. 1 km - the Cedynia Wire Rod Plant),
− Dalkowskie jary (6 km - Głogów Copper Smelter and Refinery).
Nature and landscape conservation areas
− Grodowiec (within the licensed area of the Rudna Mine),
− Guzicki Potok (within the licensed area of the Rudna Mine),
− Trzebcz (within the licensed area of the Rudna Mine),
− Dąbrowa Forest (4 km - Walcownia Metali Nieżelaznych „Łabędy” S.A.)
− Żubrowisko (5.8 km - Nitroerg S.A.)
Ecological sites
− Łęgi głogowskie (former protection zone of the Głogów Copper Smelter and Refinery)
− Glinki in Lasek Złotoryjski (1 km - Legnica Copper Smelter and Refinery, KGHM Zanam, KGHM Metraco, "Energetyka"
Sp. z o.o.)
− Lena (in the vicinity of areas managed by the Tailings Division)
− Jedlina Ponds (4 km - Nitroerg S.A.)
− Paprocany (7.1 km - Nitroerg S.A.)
− Animate and inanimate nature monuments (all divisions)
Parks (North America):
− Ward Charcoal Ovens State Historical Park (22.5 km - RNMC)
− Cave Lake State Park (19 km - RNMC)
− Wanapitei Provincial Park (8 km - Sudbury: Podolsky Mine)
− Windy Lake Provincial Park (3,2 km - Sudbury: McCreedy West Mine, 5,6 km – Sudbury – Levack Mine)
− Fairbank Provincial Park (7,1 km - Sudbury: Victoria Project)
− McConnell Lake Provincial Park (10 km – Ajax)
− Lac Du Bois Provincial Park (17 km – Ajax)
− Tonto National Forest (neighbouring with Carlota)
Operations of KGHM Polska Miedź S.A. and protected areas
The KGHM Group's activities can be divided into the following areas, which differ in terms of their potential dependencies
and impacts on the ecological status of the areas comprising:
− Areas of underground mining activities - mining activities with negligible impact on biodiversity status due to limited
conversion of land to industrial use. Shafts and their accompanying infrastructure have been operating in a confined
226
area for many decades. The spoil created during their construction is waste rock, which has no hazardous properties.
Underground mining activities are carried out in Poland and Canada (Sudbury basin, Victoria project).
− Areas of open pit mining activities - mining activities with limited impact on biodiversity. Its impact is related to the
physical transformation of the areas where mining takes place and the occupation of space for the storage of waste
rock. Potentially negative impacts that exclude specific areas from current use may favour the creation of new habitat
types, e.g. through reclamation or natural succession of landforms or the creation of convenient nesting sites (e.g.
the disused workings of Robinson Mine have been used as breeding sites for golden eagles). The activities in question
are carried out in Canada, the USA and Chile. In addition, in order to minimise the negative impacts of underground
mining on the land surface, there is mining activity in Poland (Lubin district, Lower Silesia voivodeship), involving the
open-pit mining of sand, which is used to backfill disused pits.
− Areas of copper ore processing activities, including tailings storage - ore processing activities generate significant
amounts of tailings. These are collected at the Mining Waste Disposal Facilities. The KGHM Group manages such
facilities. The leading facility of this type is the Żelazny Most Tailings Storage Facility recently extended with the so-
called South Quarters. The expansion was carried out on forested land, necessitating compensatory measures - this
issue is described in detail in ESRS section IRO-1 Description of the process used to identify and assess material
impacts, risks and opportunities. The tailings activity involves the operation of a production infrastructure that is used
to crush and flotation or leaching of metal-containing compounds. The flotation processes carried out in Poland, as
well as at Robinson Mine, are carried out in plants whose location has not changed for many decades. Operations at
the Carlota mine, carried out by leaching copper on heap leach pads, do not generate the need to occupy new land,
beyond that used by open-pit mining.
− Metallurgical activity areas - due to the complexity of the technological processes and their nature, require the
occupation of relatively large areas. Smelting operations also generate some quantities of waste subject to disposal
by landfill. This type of activity is carried out by KGHM at two locations - the Głogów Copper Smelter and Refinery and
the Legnica Copper Smelter and Refinery. KGHM's efforts to minimise its waste footprint are outlined in section [E5]
Use of resources and circular economy. Metallurgical activities generate pollutants with the potential to affect
biodiversity. Efforts to mitigate this aspect of KGHM's operations are described in detail in sections E1 and E2.
− Copper processing - activities involving the smelting of copper and the production of semi-finished copper products
are carried out at the Cedynia Wire Rod Division and the Łabędy non-ferrous metals smelter. Due to the processing
of raw materials with a high Cu content (more than 99.95 % Cu), the absence of refining processes and the use of
natural gas and electricity as energy carriers, the activities carried out at these plants do not have a significant impact
on biodiversity. In addition to the above-mentioned activities, within the KGHM Group, emissions generated in the
energy sector could have a potential impact on biodiversity. The successive investments to reduce atmospheric
emissions, the effects of which are described in sections E1 and E2, were assessed as not having a significant impact
on the natural world. Other business operations carried out in the KGHM Polska Miedź S.A. Group were considered
negligible from the point of view of impact on biodiversity.
The Domestic Companies of the KGHM Group carried out an inventory of sites where risk-causing substances have been
identified whose concentrations exceed regulatory standards. The land has been notified to the competent authorities.
Measures have also been taken to prepare and agree remediation plans. The issue of land degradation is discussed in
detail in ESRS E2 in the section on soil contamination.
The activities of KGHM that contribute to desertification have not been identified.
Sealing of soils used by the KGHM Group’s entities is caused by:
− mining use, which has resulted in, among other things, the creation of waste rock dumps,
− ore processing activities, resulting in the need to store significant amounts of tailings at adapted mine waste facilities,
− metallurgical activities, generating waste and the need to occupy land for production infrastructure.
It should be noted that in some cases soil sealing is a desirable and legally required phenomenon. It serves to protect the
soil and water environment from the migration of contaminants. The measures in question apply, among other things,
to the construction and expansion of landfill sites and storage areas, warehouses and production facilities. Relevant
provisions on the necessity of securing sealed surfaces can be found in the applicable KGHM technical guidelines and
administrative decisions (e.g. integrated permits).
The operations of the KGHM Group’s companies have or may have an impact on endangered species such as the golden
eagle and sharp-tailed prairie eagle (Robinson Mine, Nevada State, USA) and the peregrine falcon. KGHM's activities can
have both negative (interference with habitats, physical hazards generated by transport) and positive (anthropogenic
habitats) impacts. A detailed description of impacts that mitigate adverse impacts and support beneficial impacts is
included in section E4-3.
227
[IRO-1] Description of the process to identify and assess significant impacts, risks and opportunities
As part of the implementation of the double materiality assessment process, a detailed analysis of sustainability issues
was carried out in accordance with the guidelines contained in the “Double Materiality Implementation Guide” developed
by EFRAG (European Financial Reporting Advisory Group). The process consisted of four basic stages:
− Stage 1 - Understanding the context of the organisation and identifying topics for analysis
− Stage 2 - Identification of actual and potential impacts, risks and opportunities related to sustainability issues
− Stage 3 - Assessment and identification of significant impacts, risks and opportunities related to sustainability issues
− Stage 4 - Preparation of the final list of impacts, risks and opportunities and its approval by the Management Board
of the Company.
Stage 1 - Understanding the context of the organisation and identifying topics for analysis
The following activities were carried out as part of this stage:
1. Analysis of activities of the KGHM Group and its business relationships
Analysis of the KGHM Group’s Strategy, business model, production process and key policies in the area of
sustainable development
The analysis of the mission, vision and strategic development directions of the KGHM Group was carried out, including
the key assumptions and main objectives contained in the Strategy. The analysis also takes into account the key
achievements of the KGHM Group in terms of implementation of its strategic development activities in 2023.
The analysis of the business model and production processes was carried out for KGHM Polska Miedź S.A. and KGHM
INTERNATIONAL LTD. whose activities are based on ore management (exploration and identification and ore mining),
processing (ore enrichment, smelting and refining, processing) as well as sales and trading.
The highly integrated value chain of the KGHM Group was analysed, where the end product of one technological phase
is the input (intermediate product) used in the next phase. This chain comprises activities in areas ranging from
exploration, searching and sourcing of raw materials, through extraction, production, transport, delivery to customers
and stakeholders, up to responsible waste management.
The KGHM Group's key policies on environmental protection, social responsibility and corporate governance were
analysed.
Analysis of the entity's activities, key products and services and geographical locations
The key activities of the KGHM Group are based on the mining, processing and sale of a wide range of products, the most
significant of which are copper cathode, copper wire rod, silver, copper concentrate, molybdenum concentrate, gold,
nickel copper ore and TPM, oxygen-free copper wire, ETP/OFE nuggets, sulphuric acid and refined lead. These products
have important application in various industries such as energy, automotive, electronics and construction.
The materiality analysis included not only the identification of key products and services, but also their link to relevant
geographical locations, markets served and key business relationships, including how own operations impact the
environment and society.
Detailed information on the product groups offered, markets served and business relationships can be found in section
[SBM-1] Strategy, business model and value chain.
Mapping of the entity's business relationships and value chain upwards and/or downwards, including the type
and nature of business relationships
Activities in this area included:
− Analysis of the domestic and foreign companies of the KGHM Group in the context of their role in the value chain and
the nature of their links with other entities within and outside the Group.
− A breakdown of the analysis by the Group's main business types, which enabled an understanding of the impact of
individual elements of the business. The analysis included:
− Purchasing data on key raw materials, products and services, including direct business relationships with
suppliers and the geographical locations from which key supplies are sourced.
− As part of downstream: identification of key customers of Group companies, the destination of KGHM Group’s
products and the main categories of waste generated by the companies.
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2. Other background information
A market analysis and a review of relevant information about the company and its business environment was carried out,
focusing on sustainability aspects. The analyses included:
− Analysis of the current sustainable development practices applied in the KGHM Group
− Preparation of a benchmark which was based on the analysis of publicly available strategies, reports and publications
on competition and the market environment of the KGHM Group
This analysis was based on the following documents and indicators:
− Responsible Mining Foundation (RMF) Report, 2022
− EY report - Top 10 business risks and opportunities for mining and metals, 2024
− MSCI World Metals and Mining Indices and MSCI ESG Industry Materiality Map
− SASB Metals & Mining industry report, 2014 and the SASB standard for the Metals & Mining sector
− ISS Governance publication: Copper or Robber: Supply Risks and ESG Issues
− ESG strategies of selected commodity, metallurgical and industrial companies, including global leaders in the scope
of copper, wires, industrial materials and metal mining and processing
3. Stakeholder understanding
The KGHM Group carried out the stakeholder mapping process aimed at identifying key stakeholder groups and
conducting a dialogue to enable their opinions to be taken into account in the materiality assessment, reporting and
decision-making processes in the area of sustainable development. A detailed description of this process is provided in
section SBM-2.
Stage 2 - Identification of actual and potential impacts, risks and opportunities related to sustainability issues
Due diligence in the process of identifying impacts, risks and opportunities, and in the selection of topics relevant to the
sustainability reporting of the KGHM Group, based on the ESRS guidelines, has taken into account the stakeholder
perspective gained from the framework:
− Conclusions collected by the substantive units of the KGHM Group based on reviews, reports and statements resulting
from the systematic dialogue with stakeholder groups.
− Conclusions from the review of the publicly available whistleblowing channels that the KGHM Group regularly
monitors to identify key issues.
− Dedicated survey of the stakeholder perspective of the KGHM Polska Miedź S.A. Group, carried out by an external
consulting company.
Continuous dialogue with selected stakeholder groups
In order to develop a list of subjects of importance for stakeholders, available reports and statements collected by the
KGHM Group as part of its continuous dialogue with employees, investors and local communities were used, including:
− Condensed comments provided by KGHM Group's IR Team, including conclusions from meetings with investors,
representatives of investment funds and rating agencies.
− Conclusions of the KGHM Group employee engagement survey.
− Lessons from dialogue with local communities.
In the KGHM Group, local communities represent an important stakeholder group. Due to the differences in management
structure between domestic and foreign assets, the dialogue with this group is divided into:
− Domestic assets - ESG coordinators have been appointed within the subsidiaries to provide information on dialogue
with local communities, taking into account the specific activities of each company.
− International assets - all information regarding the dialogue with foreign stakeholders is provided in cooperation with
the ESG Coordinator in International Assets and the Human Resources Department in International Assets. Dialogue
with the local communities of the international companies is carried out on an ongoing basis, based on permanent
communication and cooperation in the area of environmental and social aspects in the locations of the KGHM Group’s
operations. These activities include, but are not limited to: permanent cooperation with indigenous peoples,
participation and support in the organisation of a range of local socio-cultural initiatives, the exchange of knowledge
and experience with a view to expanding each other's traditions and culture, the provision of training.
Whistleblowing channels
The KGHM Group places particular importance on stakeholder relationship management, based on the principles of
dialogue and transparent communication that take into account their needs and ensure equal access to information.
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Accordingly, in its daily operational activities, the KGHM Group provides access to a variety of channels for reporting
concerns and irregularities that can be used by different stakeholder groups, including:
− The Confidential Whistleblower Form (online), available at: https://formularzsygnalisty.kghm.com/report, enabling
the reporting of irregularities occurring in KGHM Group Companies, both anonymously and personally.
− Dedicated email addresses: liniaetyki@kghm.com, antykorupcja@kghm.com.
− Anonymous phone line: +48 76 74 80777 - call recording available 24 hours a day, 7 days a week.
− For notifications outside Poland:
− North America and Canada: +1 866 921 6714, kghm@integritycounts.ca
− Chile: +56 123 0020 3914, kghm@integritycounts.ca
− China: +86 186 1639 3022, antykorupcja@kghm.com
− Russia: +48 76 747 8282, antykorupcja@kghm.com
Notification of mining damages
Proceedings on compensation for damage shall be initiated on the basis of a written application by the affected party
submitted to the relevant KGHM mine. In emergency situations where the health, life or property of a victim is at risk and
immediate remedial action is necessary, a telephone call can be made.
Regular review and analysis of the information obtained through the above-mentioned breach reporting channels leads
to the formulation of conclusions and their evaluation. The data obtained is taken into account in the process of
identifying and assessing the impacts, risks and opportunities (IRO) of the KGHM Group.
Stakeholder opinion survey
The stakeholder survey was carried out using the following methods:
− Questionnaires - in two versions: longer and shorter. Participants of the survey included management board
members of subsidiaries in the KGHM Group in Poland and abroad, ESG coordinators in subsidiaries, customers and
suppliers, banks and insurance institutions, representatives of public administration at the local level, representatives
of the local community, schools and universities, and the media.
− Individual interviews - with experts, representatives of industry organisations, community organisations and foreign
clients.
− Online focus group meetings - with representatives of key stakeholders, including experts, representatives of industry
organisations, community organisations and foreign clients.
The stakeholder survey process included the perspective of all stakeholder groups (key and other), with the exception of
competitors. For selected stakeholder groups, questionnaires were used, in other cases interviews were conducted, focus
group meetings were organised or the conclusions of the KGHM Group's ongoing dialogue were used.
Reference to the list of sustainability issues contained in ESRS Standard 1, paragraph AR16
In its analysis, the KGHM Group took into account the list of sustainability issues contained in ESRS 1, paragraph AR16. As
a result of the analysis, the KGHM Group has not identified any material sustainability issues that are not covered by the
indicated list.
Stage 3 - Assessment and identification of significant impacts, risks and opportunities related to sustainability
issues
Impact materiality assessment
In accordance with the requirements of the ESRS standards, the KGHM Group carried out the materiality assessment
from two perspectives: impact materiality and financial materiality separately, and it subsequently discloses both
information material to both perspectives and information relevant only to one of them.
To analyse the double relevance of sustainability issues, a series of evaluation workshops was held:
− Actual and potential impacts on people and the environment in the context of the themes and sub-themes identified
in the list of sustainability issues contained in ESRS Standard 1, paragraph AR16.
− Risks and opportunities of the KGHM Group related to social, environmental and organisational governance issues
identified in the ESRS standard.
The perspective of the key elements of the Group's value chain was taken into account in the analysis of the individual
issues, with those areas considered to have the greatest impact on the Group's business operations and an increased
risk of adverse impact. The analysis was focused on the areas of greatest strategic and operational importance, taking
into account aspects of business relationships, geographical areas as well as potential environmental, social and
corporate governance risks, in particular:
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− Supply chain (including the raw materials/products and services most significant for the Group's business model).
− The Group's own operations (including mining, smelting, refining and processing for domestic companies and for the
operations of international companies).
− The impact of the Group's downstream activities (contractors).
When analysing the value chain, all key stages of business and collaboration with other actors in the value chain were
taken into account. Particular attention was paid to identifying significant negative impacts on environmental social and
corporate governance issues, in line with the principle of prioritising key issues.
The sources of information on impacts in the value chain used in the materiality analysis of impacts included:
− Expertise and experience of the Head Office substantive units dedicated to customer relations (Commercial Division),
which have knowledge of the level of compliance of customers with the KGHM Group's expectations in the scope of
ESG issues. These units mainly rely on information declared by suppliers in their responses to KGHM's questions on
ESG issues related to declarative statements. Currently the KGHM Group does not audit its suppliers.
− The activities of the ESG Department, which since its creation has taken over some of the dialogue related to ESG
issues. The dialogue in this regard is bilateral - counterparties and customers define and present their goals and
standards, while the KGHM Group presents its requirements and expectations. In particular, this applies to large
business entities such as customers, rating agencies, investors, financial institutions, suppliers, state-owned
companies or subsidiaries operating mostly for KGHM.
− Assessments in ratings (e.g. EcoVadis, MSCI ESG Industry Materiality Map) and the conclusions of the assessment
carried out by an independent third party for The Copper Mark certification (https://coppermark.org).
− Expertise of the ESG Department and an external consulting firm specialising in ESG issues, which provided
substantive support to KGHM in the analysis of impacts.
Materiality of impacts
In its analysis of impacts, risks and opportunities, the KGHM Group has included the likelihood of occurrence of a given
impact/influence with a breakdown into time horizons
− short-term (up to 1 year),
− medium-term (1 to 5 years),
− long-term (over 5 years).
The adopted time horizons are consistent with those presented in the financial statements.
Impact severity
The severity of an impact refers to the scale, extent and nature (reversibility) of the impact concerned. During the
workshop, each aspect was analysed according to the following criteria:
Scope of impact
The geographical extent of the impact and the universality of the impact was assessed at all stages of the KGHM Group
value chain, applying the following scale:
− 1 - No noticeable environmental, social or economic impact occurs. The activity or process does not generate
consequences that are material to stakeholders.
− 2 - Impact limited to the specific, limited geographical area (e.g. city, municipality, region). Consequences affecting
local communities or at a particular business location.
− 3 - Impact that is perceived at the national level and has material economic, environmental or social significance on a
national scale.
− 4 - European impact - Impact beyond Poland, but limited to the countries of Europe.
− 5 - Global impact - Impact that comprises the whole world or is of global significance.
Scale of impact
Scale of impact means the effects of an impact (both negative and positive), such as the damage caused to the natural
environment, the number of people affected by an impact, the effects on particular stakeholder groups or individuals
(ESRS 1 Appendix A, AR 10). The following qualitative thresholds were adopted for the assessment of the scale:
− 1 - None - no impact / not applicable
− 2 - Low scale - minimum impact (low intensity impact)
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− 3 - Moderate scale - moderate effects of the impact (medium intensity impact; analysed against other impacts that
were discussed during the workshop)
− 4 - High scale - severe impact (high intensity impact)
− 5 - Very high scale - very severe impact (very high intensity impact)
Reversibility of impact
The reversibility of an impact refers to the possibility and level of difficulty in reversing the negative consequences of an
impact concerned. The reversibility analysis refers to the exclusion of negative impacts and is classified according to a
five-point scale:
− 1 - Not applicable
− 2 - Easily reversible - can be reversed with minor effort and within a short period of time
− 3 - Moderately reversible - requires a moderate amount of resources and a longer period of time
− 4 - Difficult to reverse - requires significant investment and a long period of time
− 5 - Irreversible - causes permanent, irreversible losses or damages
Likelihood of impact
Likelihood of impact means an assessment of whether the impact:
− Materialised (marked as real)
− May occur in the future (marked as potential)
The assessment refers to the impacts identified in the entire key value chain of the KGHM Group, taking into account
both domestic and international companies.
For potential impacts, the assessment was carried out using a five-point scale:
− 1 - very low likelihood
− 2 - low likelihood
− 3 - medium likelihood
− 4 - high likelihood
− 5 - very high likelihood
The assessment was broken down by time horizon:
− Short-term (0 to 12 months),
− Medium-term (1 to 5 years),
− Long-term (over 5 years).
Determining the materiality and cut-off thresholds
The materiality threshold was set at 50% of the maximum score in each impact category, for both potential and actual
impacts, in positive and negative terms.
This approach strikes a balance between identifying significant issues and eliminating less significant factors to effectively
manage risks and opportunities. The cut-off threshold adopted reflects best practice in impact assessment and allows a
consistent comparison between different aspects of the activity.
Prioritisation of impacts
The sum of the impact severity and impact likelihood scores determines the prioritisation of impacts considered within
the ESRS topics concerned.
Monitoring of impacts
The individual impacts considered in the double materiality test are monitored individually by the substantive units
responsible for the area concerned, in accordance with the responsibilities assigned in the Organisational Regulations.
The frequency of monitoring varies according to the topics or sub-topics identified by the ESRS.
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Quality filter
In order to ensure that no significant impact was overlooked when applying the quantitative impact assessment method,
all identified impacts were additionally subject to a qualitative analysis based on a substantive, subjective assessment
and the experience of specialists, with additional qualitative arguments reflecting the nature of the Group’s activities.
Where an impact met the materiality criterion in the quantitative analysis, but was not reflected in the nature of the
Group's business, it was omitted from the report as an irrelevant topic from an information value perspective.
Description of the process used for identification and assessment of material risks
Considering the importance that ESG risk may have for the Company and its environment, KGHM Polska Miedź S.A.
considers it as an integral part of the process of Corporate Risk Management of the KGHM Polska Miedź S.A. Group,
including:
− a description of the decision-making process and related internal control procedures,
− the way the entity assesses the likelihood, magnitude and nature of the effects associated with the risks identified,
− input parameters, data sources and assumptions used as part of risk identification and assessment.
Diagram 49. Management of sustainable development risk
The corporate risk management process in the KGHM Polska Miedź S.A. Group consists of four stages: (I) Context
definition, (II) Identification and Assessment, (III) Analysis and response, (IV) Monitoring and communication. From the
perspective of the consideration of ESG risks the second step of key importance should be indicated, where ESG risks are
also considered in the risk identification and assessment, which, due to their broad and complex scope covering many
areas related to the environment, society or corporate governance, are not understood as a separate risk category or
subcategory, but as a factor that can affect one or more risks. Moreover, each identified corporate risk is assessed in
terms of its multiple impacts in order to identify its potential impact as widely as possible, e.g. reputation and stakeholder,
environmental, regulatory and legal, health and safety. As part of the third stage and in-depth cause and effect analysis,
issues related to ESG risk factors are also taken into account in order to develop ways to mitigate against the individual
factors and consequently manage ESG risks effectively.
The assessment of financial materiality was performed using the corporate risk management process in place in the
KGHM Polska Miedź S.A. Group and taking into account the results of the materiality impact assessment.
Assessment process
The following steps were included in the financial materiality assessment process to identify, assess, prioritise and
monitor material risks:
− Sustainability issues were identified as part of the identified corporate risks:
− corporate risks identified within the KGHM Group (including as part of international assets) were used for the
analysis,
− within the individual categories/subcategories of the Risk Model of the KGHM Polska Miedź S.A. Group,
sustainability issues were identified - assignment of a given corporate risk to the specific topic/subtopic within the
ESRS (analysis comprising all topics/subtopics).
− A determination was made as to whether the risks assigned should be analysed in the context of financial materiality
(impact of climate change and sustainability issues on KGHM) and/or impact materiality (impact of KGHM on people
and the environment). During the work, the linkages of impacts and relationships with risks were taken into account:
ESTABLISHING A STRONG CORPORATE RISK MANAGEMENT SYSTEM
Context analysis
Decision concerning the key
ESG risks
Responding to risk and
building resilience
Identification and
assessment of risk
comprising ESG factors
Monitoring and
Communication
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− as part of the analysis of the impact assessment results, taking into account sustainability issues, it was verified
whether the identified impact should also be attributed a risk meeting the criteria of financial materiality,
− at the same time, it was verified whether a new risk not yet identified should be identified in connection with the
identification of the impact concerned.
Likelihood of risk occurrence
For corporate risks included in the financial materiality analysis, a likelihood and financial impact rating was performed
for KGHM on a scale of 1 to 5:
− the assessment of likelihood in a short-term perspective was transferred from the assessment of the respective
corporate risk or consolidated risk (if the risk is consolidated at the KGHM Group level) and an assessment of the
trend in the medium and long term was performed.
− time horizons consistent with the methodology adopted in the materiality impact assessment were adopted:
− short-term (likelihood/uncertainty up to one year),
− medium-term (likelihood/uncertainty within the perspective of one to five years),
− long-term (likelihood/uncertainty within the perspective over five years),
− a scale of likelihood of materialisation of a given risk consistent with the approach used in corporate risk management
was adopted:
− 1 - very low likelihood
− 2 - low likelihood
− 3 - medium likelihood
− 4 - high likelihood
− 5 - very high likelihood
Assessment of financial impact
The assessment of the financial impact has been transferred from the assessment of the respective corporate risk or
consolidated risk (if the risk is consolidated at the KGHM Group level), The scale of financial effects in the case of
materialisation of a given risk consistent with the approach used in corporate risk management was adopted:
− 1 - very low financial effect for the organisation,
− 2 - low financial effect for the organisation,
− 3 - medium financial effect for the organisation,
− 4 - high financial effect for the organisation,
− 5 - very high financial effect for the organisation.
Quantitative threshold and identification of material risks
Based on the assessment performed, risks relevant to financial materiality were identified:
− quantitative threshold adopted: probability and financial impact score ≥3 or probability <3 and impact ≥ 4,
− taking into account the qualitative assessment resulting, inter alia, from the information contained in the Risk Cards
or interim reports of the entities,
− the approach applied is consistent with the corporate risk management process in place in the KGHM Polska Miedź
S.A. Group.
No higher or lower priority risks were identified within the risks assessed and recognised as material, in line with the
corporate risk management approach used and adopted for the financial materiality assessment. All material risks are
equivalent for KGHM.
Results of the financial materiality assessment represented the element of the decision in the selection of material topics.
The list of risks was revised by the Management Board of KGHM Polska Miedź S.A. in consultation with the top
management.
Criteria for assessing the materiality of ESG opportunities for materiality analysis according to the ESRS reporting
standard
Assessment process
The selection of material opportunities in the double materiality analysis was based on the process of reviewing the
strategic initiatives proposed in the strategic workshops conducted during the work on the Group's strategy update - in
H2 2024. Using the knowledge and experience of the teams responsible for each business area, including the Company's
top management, combined with analysis of financial data, stakeholder consultation and thematic workshops, a list of
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strategic issues/initiatives was specified in detail and classified according to ESRS themes, assigned to the relevant
strategic areas and directions proposed from the updated strategy, and assessed the nature and scale of their financial
impact on the Group, as well as the likelihood of the opportunity being realised in the short, medium and long term.
Review of strategic initiatives and objectives:
− Identification of the issue in the context of ESRS topics and sub-topics.
− Assigning a person responsible for analysing and implementing activities related to the opportunity concerned.
− Determining whether and how the topic concerned can benefit the organisation, e.g. increased revenue, improved
reputation, cost savings.
Assessment and nature of the financial impact
The nature of the financial impact was assessed by:
− The analysis of the impact of the opportunity on the company's financial performance, e.g. increased revenue,
reduced costs, resulting from the innovation implemented.
− Financial impact (PLN): an estimate of the order of magnitude of the potential financial benefits arising from the
opportunity concerned (e.g. annual savings).
Likelihood of materialisation of the opportunity
Likelihood of materialisation of the opportunity was analysed in three time perspectives. Both the probabilities and time
horizons for assessing opportunities correspond to the criteria for assessing impacts.
Final Opportunity Assessment
The final assessment of the opportunity (significant/insignificant) and the decision on the importance of the opportunity
for the organisation, was performed on the basis of the financial impact and an expert assessment of the likelihood of
implementation, taking into account currently available technologies and capabilities. The limit of the minimum financial
impact of the opportunity was assumed at a level similar to the assessment of the financial materiality of the impact of
social and environmental issues on the KGHM Polska Miedź S.A. Group.
An important point to note is the specific nature of the industry and its long-term projects, the long preparation period -
analysis, geological studies, environmental impact, feasibility studies, exploration, etc. For this reason, potential
opportunities with a time horizon of five years and above were not rejected, which were assessed to have a low or
moderate/average probability of materialisation, but their estimated financial impact was significant.
The potential opportunities identified for the topic of decarbonisation and energy efficiency critical for the Group were
reassessed by the top management responsible for the Company's energy transition. Number of identified significant
opportunities subject to disclosure: 21.
Stage 4 - Preparation of the final list of impacts, risks and opportunities and its approval by the Management
Board of the Company.
Once the list of impacts, risks and opportunities was identified, the consultations with the Management Board and the
Top Management were carried out to approve the IRO. During the discussion, the results of the double materiality analysis
were presented. All comments and observations made were taken into account and the final version of the list was
approved.
Description of the processes for identifying and assessing material climate-related impacts, risks and
opportunities
As part of establishing the processes for identifying and assessing significant climate-related impacts, risks and
opportunities, an analysis was conducted covering key aspects of the KGHM Group's operations.
The analysis took into account the decarbonisation plan, reduction targets and emissions generated along the value chain
(upstream, downstream). The energy policy with its objectives was analysed, as well as the climate policy assumptions
and the energy strategy for the development of renewable energy in the Company. Particular emphasis was placed on
identifying the impacts of activities on climate change, including greenhouse gas emissions (in line with the GHG Protocol).
This included direct and indirect emissions (Scope 1, 2 and 3), covering the entire KGHM Group's operations.
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Preventing and minimizing the environmental and climate impact and rational management of natural resources is of
fundamental importance for KGHM Polska Miedź S.A. in respect to sustainable development, satisfaction of stakeholder
expectations and accountability to future generations.
At the same time, KGHM Polska Miedź S.A., as an organisation aware of the impact of climate change on business activity,
has fully integrated the Climate Risk Management process with the Corporate Risk Management Process of the KGHM
Polska Miedź S.A. Group, As a result of these measures, KGHM identifies a new category: climate risk, with importance
equivalent to other main risk categories in the Company, i.e. value chain, technological, external, internal and market risk.
The corporate risk management process in the KGHM Polska Miedź S.A. Group consists of four stages: (I) Context
definition, (II) Identification and Assessment, (III) Analysis and response, (IV) Monitoring and communication. The critical
stages in the recognition of climate risks include the first stage (scenario analyses as part of Context Definition) and the
second stage (taxonomy of climate risk as part of Identification and Assessment). Scenario analyses in climate risks are
described in more detail later in this chapter, as they provide the key foundation for identifying and assessing climate
risks as part of the second stage of the process, taking into account the climate risk categories which, according to the
classification adopted, are divided into the following subcategories.
Diagram 50. Categories of climate risk
With regard to climate risk, at this stage of the process, risks are identified taking into account whether assets and
business activities may be exposed to climate risk and whether it may affect the achievement of targets at the KGHM
Polska Miedź S.A. Group level. The extent to which assets and business activities are likely to be exposed (impact and
likelihood) and vulnerable (susceptibility) to identified climate-related risks is subsequently assessed in accordance with
the applicable Risk Assessment Matrix. The remaining stages of the climate risk management process are consistent with
the general corporate risk management process in the KGHM Polska Miedź S.A. Group. As part of the applicable approach
to climate risk management, roles and responsibilities for individual stages of the process have been indicated and
indicators to measure and manage climate risk have been developed.
It should be mentioned that in KGHM Polska Miedź S.A. the Decarbonisation Program of KGHM Polska Miedź S.A. was
adopted in 2024, in which the key areas of the Company's core business responsible for greenhouse gas emissions are
presented. Based on this information and the Company's development plans, tasks have been defined and areas for
which action is needed to ensure the transition to a climate-neutral economy by 2050 have been determined. The
Company's activities in the 2030 horizon focus on reducing indirect emissions, i.e. emissions related to the
use of electricity. The main direction of decarbonisation in this area will be a gradual withdrawal from the use of market-
sourced and fossil-fuel-generated electricity to the increasing use of in-house low- and zero-carbon sources of electricity
and heat. The development of own renewable sources of electricity generation will involve the construction or acquisition
of renewable energy installations (photovoltaic power plants and wind power), from which the electricity generated, in
accordance with the assumptions of the Company's Energy Transition, will be 100% used in the processes of the Core
Business of KGHM Polska Miedź S.A. Improving energy efficiency will also play an important role in the decarbonisation
process. The ISO 50001-compliant Energy Management System implemented by all Divisions has a systematic effect on
reducing the Scope 2 greenhouse gas emissions.
Within the key directions for reducing the carbon footprint in the area of direct emissions, the construction of a CCS/CCU
facility (Carbon Capture and Storage/Carbon Capture and Utilization) at the Głogów Copper Smelter and Refinery is being
considered. In 2024, conceptual and R&D work was carried out on the development of a CO2 capture facility at the Głogów
Copper Smelter and Refinery. Further work on the project concept and financing is planned. Measures to reduce Scope
1 direct emissions through the implementation of CCS/CCU facilities in the metallurgical core business will be
progressively implemented in the 2050 timeframe.
In KGHM Polska Miedź S.A., consistent efforts are undertaken to reduce direct and indirect emissions. The
decarbonisation plan is subject to constant review, and its upcoming review is planned in accordance with the
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assumptions in the area of energy development adopted in the new updated Strategy of the KGHM Polska Miedź S.A.
Group. The formulated decarbonization path, consistent with the implemented Climate Policy of KGHM Polska Miedź S.A.,
will be an important element of the Company's commitment to climate protection, and thus an important link in climate
risk management.
Scenario analyses in climate risks
In the first step of the risk management process (Definition Context), KGHM considered climate change by performing a
scenario analysis, based on recognized reports of the Intergovernmental Panel on Climate Change (IPCC) and the
International Energy Agency (IEA). The above analysis is currently conducted on the basis of 5 baseline scenarios: Stated
Policies Scenario (STEPS), Sustainable Development Scenario (SDS), Net Zero Emissions by 2050 (NZE2050), RCP4.5 and
RCP8.5. In the scenario analysis, the assumptions are considered in three time horizons: short term (2024-2025), medium
term from 1 to 5 years and long term (2030), over 5 years (2050), making a number of assumptions:
− In the case of scenarios examining transition-related risks, in terms of the implementation of the adopted climate
policy and the resulting changes in parameters relevant from KGHM’s perspective: e.g. prices of emission allowances,
energy consumption, changes in demand for copper,
− In the case of physical risk scenarios, the starting point for the analysis are the levels of greenhouse gas concentrations
in the atmosphere and the resulting changes in the Earth’s temperature and their consequences.
KGHM Polska Miedź S.A. is also continuing activities associated with updating of scenarios serving as a basis for analysing
the impact of climate change on the organisation. In this way, the Company aims to achieve the most tailored and
customised approach possible, enabling business decisions to be made in relation to assessing the organisation's
resilience to potential climate change. At the same time, KGHM has been continuing its work on identifying and assessing
the impact of climate risk on financial and non-financial reporting with the aim of, inter alia, determining the consistency
of the climate scenarios applied with the critical climate assumptions used in financial reporting.
Description of the processes for identifying and assessing significant pollution impacts, risks and opportunities
The analysis and assessment of the impact of pollution-related risks and opportunities within the KGHM Group's
operations included a number of activities that provided a more detailed understanding of the actual and potential risks
and benefits of the Group's operations in terms of environmental impact.
A review of locations and activities to identify pollution-related impacts, risks and opportunities included an analysis of
the KGHM Group's operations and its value chain. The work covered analyses of environmental impact reports (including
the Environmental Impact Statement and the Environmental Assessment), waste management reports, as well as
documents produced for specific investments. The current status and projections of future impacts, risks and
opportunities were reviewed taking into account changing market, regulatory and technological conditions. The analysis
does not take into account impacts resulting from the exploitation of products by end users.
The aim of the review was to determine the environmental impact of the Group's activities through emissions to air, water
and soil and their impact on the various stages of the value chain. Consultations with affected communities also included
the topic of pollution. The Parent Entity conducted a stakeholder perspective study for the materiality assessment, which
analysed environmental aspects, including issues related to emissions. The results of these activities are taken into
account in the evaluation process.
The analysis of pollution impacts, risks and opportunities included the identification of risks and benefits arising from the
Group's activities. Account was taken of existing pollution policies, European Commission regulations, including BAT
conclusions for the non-ferrous metals industry, air protection investments from previous years, water permits held and
emission reduction targets.
The work also included an analysis of the installations operated by the Group's domestic companies, which are subject
to the obligation to report releases and transfers to the KRUiTZ (National Pollutant Release and Transfer Register), and
an assessment of significant emissions in the country and abroad. The standards and methods for determining emissions
for installations subject to reporting to the KRUiTZ and emissions according to the European Pollutant Release and
Transfer Register were reviewed. Potentially hazardous substances and SVHCs present in the Group in 2024 are also
included.
Description of the processes for identifying and assessing significant impacts, risks and opportunities related to
water and marine resources
The analysis and evaluation of the impacts, risks and opportunities associated with water and marine resources included
the identification and assessment of the actual and potential effects of activities, taking into account the Group and
operations in the value chain at higher and lower levels.
237
The analysis also covered water and marine resource policies and targets, the water cycle within the integrated technology
chain, and issues related to water intake and consumption and wastewater disposal.
Potential risks associated with the use of water and marine resources were assessed, taking into account, among other
things, climate change, use of water, water pollution and potential changes in the availability of water resources. The
review used, among others, environmental impact reports, waste management reports, as well as documents prepared
for specific investments in specific locations.
The aim of the work was to identify how the Group's operations, both in its own processes and in its business
relationships, may impact on water and marine resources in the regions in which it has operations. Among other things,
water use in production processes, water emissions and impacts on marine ecosystems were analysed. Consultations
with the affected communities allowed to obtain the opinions on the impact of the Group's activities on water resources,
while learning about their concerns and expectations in terms of protecting these resources.
Currently, apart from the declarations from suppliers, the Group does not have any information or tools to verify
downstream and upstream issues of water consumption and impacts on water and marine resources, hence the
assessment of water-related IROs presents the perspective of its own operations and locations.
Description of the processes for identifying and assessing significant impacts, risks and opportunities related to
biodiversity and ecosystems
The assessment of impacts, risks and opportunities related to biodiversity and ecosystems was based on the value chain
including all Group’s companies covered by the financial statements and information on purchases of raw
materials/products/services key to the Group's business model. Suppliers with a direct supplier-customer business
relationship with the Group companies and the aspect of geographical regions were also taken into account.
Impacts, risks and opportunities in relation to biodiversity and ecosystems arising from the Group's activities were
identified and assessed. The review used, among others, environmental impact reports, waste management reports, as
well as documents prepared for specific investments in specific locations. The raw materials fundamental to the Group's
business model are mainly sourced by KGHM Group companies with mining operations, which makes it possible to have
data on the impact of key raw materials on biodiversity and to assess impacts, risks and opportunities.
Biodiversity and ecosystem dependencies were identified and assessed, taking into account local and global
dependencies. The analysis of biodiversity impacts, risks and opportunities takes into account the context of migration
towards more sustainable activities and the physical and transitional risks of biodiversity loss. All topics and sub-topics
contained in the ESRS were considered in the context of the entire Group’s value chain.
The analysis of systemic risks included the impact of biodiversity change on natural and social systems. The analyses
performed did not demonstrate a biodiversity factor or an indication of systemic risk.
Consultation with stakeholders, including communities affected by impacts on biodiversity and ecosystems, included the
identification of biodiversity-sensitive areas in or near which the Group operates. The identification of these sites was
based on the definition of biodiversity sensitive areas. Areas within a few kilometres to several kilometres from the sites
of the Group's entities were analysed, and sites where risk-causing substances were identified whose concentrations
exceed the standards set by law were reviewed. The sealing of the soils used by the Group's entities, the impact of the
activity on endangered species and issues relating to biodiversity and ecosystem policies were taken into account. The
impact of emissions on biodiversity, including aquatic ecosystems, was analysed and biodiversity conservation and
enhancement projects such as ecological grasslands, conservation species measures and forest management were
considered.
Currently, apart from the declarations of contractors, the Group does not have any information or tools to verify the
impact on biodiversity and ecosystems downstream and upstream in the value chain, which does not allow us to exclude
the negative impact of elements of the supply chain.
Description of the processes for identifying and assessing material impacts, risks and opportunities in the
context of circular economy and use of resources
The double materiality analysis in the context of circular economy and use of resources covered both the pollution and
resource efficiency aspects of the Group's operations and its value chain. The activities were aimed at identifying and
assessing impacts, risks and opportunities related to resource use, waste as well as production and utilisation processes.
The analysis included policies related to the circular economy, the Group's own production assets in terms of resource
utilisation, the Group's waste streams by location (including mining waste, metallurgical process waste and waste
recovery), targets related to resource utilisation and the circular economy, and information on resource inputs and
outputs.
238
Actual and potential impacts, risks and opportunities associated with resource use were identified, including raw
materials and waste generated. Both the Group's internal operations were included in the analysis. The assessment of
the impacts, risks and opportunities in this area was performed for the company's own operations and locations, and the
value chain relied on declarative information. The resources, raw materials and materials used in the Group's operations
were reviewed, identifying the actual and potential impacts arising from their use, as well as the risks associated with
over-consumption of resources, waste generation, environmental pollution and inadequate waste management. The
review used, among others, environmental impact reports, waste management reports, as well as documents prepared
for specific investments in specific locations.
Stakeholders and communities affected by the Group's activities were consulted, taking into account the results of
surveys of the perspectives of the parties involved in the context of environmental issues.
Currently, apart from declarative data collected from supplier surveys, the Group does not have the information or tools
to verify the issue of resource use and the circular economy upstream and downstream of the value chain.
Description of the processes for identifying and assessing materiaimpacts, risks and opportunities in the context
of business conduct
The process of identifying significant impacts, risks and opportunities in relation to business conduct issues included an
analysis of business conduct policies, codes of conduct and ethics, whistleblowing systems in place in the Group, payment
practices, political and lobbying involvement and corruption and bribery issues.
As part of the process, existing policies and codes of conduct and their compliance with national and international
regulations were reviewed. The extent of the implementation of these documents in the individual Group’s entities was
assessed. The analysis took into account the location of the business, the operating sector and the transaction structure,
including interactions with external parties, in particular suppliers and business partners. The review of whistleblowing
systems included an assessment of the mechanisms for reporting ethics and anti-corruption violations, the functionality
of reporting channels and the effectiveness of remedial actions taken.
Payment practices were analysed in the context of the timeliness of settlements with counterparties. An assessment was
made of the Group's political and lobbying involvement in light of the applicable law. The analysis of corruption and
bribery issues focused on the identification of potential risks present in the Group's business areas, the assessment of
preventive mechanisms and the effectiveness of the procedures implemented to minimise risks.
[IRO-2] Requirements in ESRS covered by the undertaking’s sustainability statements
The following tables present all the disclosure requirements compliant with ESRS 2 and the ESRS E1 to G1 thematic
standards that were considered relevant to the KGHM Group and which formed the basis for the preparation of this
sustainability statement.
These tables also indicate the location of information relating to the specific disclosure requirement outside the
sustainability report and incorporated by reference into the financial statements in this annual report or a separate
section of this sustainability report.
Table 115. ESRB 2 horizontal standard. General disclosures
Disclosure requirement
Page
Additional comments
BP-1
General basis for the preparation of the sustainability statement
145
-
BP-2
Disclosure in relation to special circumstances
147
-
GOV-1
The role of the administrative, management and supervisory
bodies
148
-
GOV-2
Information provided to and sustainability matters addressed by
the undertaking’s administrative, management and supervisory
bodies
156
-
GOV-3
Integration of sustainability-related performance in incentive
schemes
158
-
GOV-4
Statement on sustainability due diligence
160
-
GOV-5
Risk management and internal controls over sustainability
reporting
160
-
239
SBM-1
Market position, strategy, business model(s) and value chain
162
ESRS 2 SBM-1 point 40(b) and (c) omitted (in
accordance with ESRS 1 Appendix C list)
SBM-2
Interests and views of stakeholders
174
-
SBM-3
Significant impacts and opportunities and their links with the
strategy and business model
178
ESRS 2 SBM-3 point 48(e) in year 1 of
sustainability reporting omitted; qualitative
disclosures made
IRO-1
Description of the process to identify and assess significant
impacts, risks and opportunities
228
-
IRO-2
Disclosure Requirements in ESRS covered by the undertaking’s
sustainability statements
240
-
Table 116. ESRS E1 thematic standard - Climate change
Disclosure requirement
Page
Additional comments
E1-1
Plan of transition to climate change mitigation needs
275
-
E1-2
Policies related to climate change mitigation and adaptation to it
276
-
E1-3
Measures and resources in relation to climate policy
278
-
E1-4
Goals related to climate change mitigation and adaptation to it
279
-
E1-5
Energy consumption and mix
281
-
E1-6
Gross Scope 1, 2 and 3 greenhouse gas emissions and total
greenhouse gas emissions
282
-
E1-7
Greenhouse gas elimination and mitigation projects financed
through carbon credits
299
-
E1-8
Internal carbon pricing
299
-
E1-9
Expected financial effects resulting from material physical and
transition risks and potential climate-related opportunities
299
-
Table 117. ESRS E2 thematic standard - Pollution
Disclosure requirement
Page
Additional comments
E2-1
Policies related to pollution
299
-
E2-2
Actions and resources related to pollution
300
-
E2-3
Targets related to pollution
304
-
E2-4
Pollution of air, water and soil
305
-
E2-5
Potentially hazardous substances and substances of very high
concern
310
-
E2-6
Anticipated financial effects arising from pollution risks and
opportunities
311
Omitted in year 1 of preparation of the
sustainability reporting
Table 118. ESRS E3 thematic standard - Water and marine resources
Disclosure requirement
Page
Additional comments
E3-1
Policies related to water and marine resources
311
-
E3-2
Activities and resources related to water and marine resources
312
-
E3-3
Goals related to water and marine resources
316
-
E3-4
Water consumption
316
-
E3-5
Anticipated financial effects resulting from impacts, risks and
opportunities related to water and marine resources
317
Omitted in year 1 of preparation of the
sustainability reporting
Table 119. ESRS E4 thematic standard - Biodiversity and ecosystems
Disclosure requirement
Page
Additional comments
E4-1
Biodiversity and ecosystem transition plan and integration of
biodiversity and ecosystems in the strategy and business model
317
-
E4-2
Policies related to biodiversity and ecosystems
318
-
E4-3
Activities and resources related to biodiversity and ecosystems
319
-
E4-4
Goals related to biodiversity and ecosystems
323
-
240
E4-5
Impact measures related to changes in the scope of biodiversity
and ecosystem
323
-
E4-6
Anticipated financial effects arising from risks and opportunities
related to biodiversity and ecosystems
323
Omitted in year 1 of preparation of the
sustainability reporting
Table 120. ESRS E5 thematic standard - Use of resources and circular economy
Disclosure requirement
Page
Additional comments
E5-1
Policies related to the use of resources and circular economy
323
-
E5-2
Activities and resources related to the use of resources and circular
economy
324
-
E5-3
Goals related to the use of resources and circular economy
328
-
E5-4
Resources contributed
328
-
E5-5
Resources discharged
329
-
E5-6
Anticipated financial effects resulting from impacts, risks and
opportunities related to the use of resources and circular economy
332
Omitted in year 1 of preparation of the
sustainability reporting
Table 121. ESRS S1 thematic standard - Own Staff Resources
Disclosure requirement
Page
Additional comments
S1-1
Policies related to own staff resources
333
-
S1-2
Procedures of cooperation with own staff resources and staff
representatives on issues of impacts
337
-
S1-3
Processes for remedying the effects of negative influences and
channels for raising concerns through own staff resources
339
-
S1-4
Addressing the significant impacts on own staff resources and
applying approaches to manage material risks and opportunities
related to own staff resources and the effectiveness of these
actions
341
-
S1-5
Goals related to managing significant negative impacts, enhancing
positive impacts and managing significant risks and opportunities
346
-
S1-6
Characteristics of the entity’s employees
347
-
S1-7
Characteristics of non-employees forming the entity's own staff
resources
348
Omitted in year 1 of preparation of the
sustainability reporting
S1-8
Scope of collective bargaining and social dialogue
348
-
S1-9
Diversity measures
348
-
S1-10
Adequate wage
349
-
S1-11
Social protection
349
-
S1-12
Persons with disabilities
349
-
S1-13
Training and skills development metrics
350
-
S1-14
Occupational health and safety metrics
350
Omitted in year 1 of sustainability
reporting (rate of reportable work-related
accidents;
disclosure regarding non-employees in the
first year of preparation of the
sustainability statement)
S1-15
Work and life balance metrics
351
-
S1-16
Remuneration metrics (pay gap and total remuneration)
351
-
S1-17
Incidents, complaints and serious impacts on adherence to
human rights
352
-
241
Table 122. ESRS S2 thematic standard - Workers in the value chain
Disclosure requirement
Page
Additional comments
S2-1
Policies related to workers in the value chain
352
-
S2-2
Processes of collaboration with workers in the value chain in the
scope of impacts
353
-
S2-3
Processes for remedying the effects of negative impacts and
channels for raising concerns through workers in the value chain
353
-
S2-4
Addressing the significant impacts on workers in the value chain
and applying approaches to manage material risks and using
opportunities related to workers in the value chain and the
effectiveness of these actions
354
-
S2-5
Goals related to managing significant negative impacts, enhancing
positive impacts and managing significant risks and opportunities
356
-
Table 123. ESRS S3 thematic standard - Affected communities
Disclosure requirement
Page
Additional comments
S3-1
Policies related to affected communities
356
-
S3-2
Cooperation processes in the scope of impacts with affected
communities
357
-
S3-3
Processes to remedy negative impacts and channels for raising
concerns by affected communities
360
-
S3-4
Addressing the significant impacts on affected communities and
applying approaches to manage material risks and opportunities
related to these communities and the effectiveness of these
actions
361
-
S3-5
Goals related to managing significant negative impacts, enhancing
positive impacts and managing significant risks and opportunities
363
-
Table 124. ESRS S4 thematic standard - Consumers and end users
Disclosure requirement
Page
Additional comments
S4-1
Policies related to consumers and end users
364
ESRS S4 standard relevant to selected
Group companies
S4-2
Cooperation processes in the scope of impacts with consumers
and end users
365
S4-3
Processes to remedy negative impacts and channels for raising
concerns by consumers and end users
367
S4-4
Addressing the significant impacts on consumers and end users
and applying approaches to manage material risks and
opportunities related to consumers and end users and the
effectiveness of these actions
367
S4-5
Goals related to managing significant negative impacts, enhancing
positive impacts and managing significant risks and opportunities
369
Table 125. ESRS G1 thematic standard - Business conduct
Disclosure requirement
Page
Additional comments
G1-1
Business conduct policies and corporate culture
369
-
G1-2
Management of relationships with suppliers
376
-
G1-3
Counteracting and detection of corruption and bribery
378
-
G1-4
Incidents of corruption or bribery
380
-
G1-5
Political influence and lobbying activities
381
Topic considered as irrelevant
G1-6
Payment practices
381
-
242
List of data points contained in horizontal and thematic standards arising from other EU legislation
In the table below, all data points resulting from other EU legislation listed in Annex B to ESRS 2 are included. The table identifies the locations of these points in the report and
indicates points assessed as “insignificant”.
Disclosure requirement/data point
SFDR
Pillar 3
Benchmark
Regulation
EU
Climate
Law
Comments
Page
ESRS 2 GOV-1 21d Gender diversity of management board members
x
x
154
ESRS 2 GOV-1 21e Percentage of body members who are independent
x
154
ESRS 2 GOV-4 30 Due diligence declaration
x
160
ESRS 2 SBM-1 40d (i) Participation in fossil fuel activities
x
x
x
Not applicable
ESRS 2 SBM-1 40d (ii) Participation in activities related to production of chemicals
x
x
Not applicable
ESRS 2 SBM-1 40d (iii) Participation in activities related to controversial weapons
x
x
Not applicable
ESRS 2 SBM-1 40d (iv) Participation in tobacco cultivation and production activities
x
Not applicable
ESRS E1-1 14 Transformation plan to achieve climate neutrality by 2050.
x
275
ESRS E1-1 16g Entities excluded from the scope of the reference indices adapted to the Paris Agreement
x
x
Not applicable
ESRS E1-4 34 Greenhouse gas emission reduction targets
x
x
x
275
ESRS E1-5 38 Fossil energy consumption disaggregated by source (applicable only to sectors with significant climate
impact)
x
281
ESRS E1-5 37 Energy consumption and energy mix
x
281
ESRS E1-5 40-43 Energy intensity associated with activities undertaken in sectors with significant impacts on climate
x
281
ESRS E1-6 44 Scope 1, 2, 3 gross and total greenhouse gas emissions
x
x
x
283-284
ESRS E1-6 53-55 Gross greenhouse gas emission intensity
x
x
x
285
ESRS E1-7 56 Greenhouse gas removal and carbon credits
x
299
ESRS E1-9 66 Reference portfolio exposure to physical climate risk
x
Postponement
ESRS E1-9 66a Disaggregation of monetary amounts according to acute and permanent physical risk
x
Postponement
ESRS E1-9 66c Location of significant physical risk assets
x
Postponement
ESRS E1-9 67c Breakdown of real estate book value by energy efficiency class
x
Postponement
ESRS E1-9 69 Degree of exposure of the portfolio to climate-related opportunities
x
Postponement
ESRS E2-4 28 Amount of each pollutant listed in Annex II of the Regulation on E-PRTR emitted to air, water and soil
x
309
ESRS E3-1 9 Water and marine resources
x
311
ESRS E3-1 13 Special policy
x
Not applicable
ESRS E3-1 14 Sustainable practices for oceans and seas
x
Not applicable
ESRS E3-4 28c Total amount of water recycled and reused
x
317
ESRS E3-4 29 Total water consumption in m
3
per net income from own operations
x
317
ESRS 2 SBM 3 (E4) 16a
x
181
ESRS 2 SBM 3 (E4) 16b
x
181
ESRS 2 SBM 3 (E4) 16c
x
181
ESRS E4-2 24b Sustainable land/agriculture practices or policies
x
318
ESRS E4-2 24c Sustainable ocean/sea practices or policies
x
Not applicable
243
Disclosure requirement/data point
SFDR
Pillar 3
Benchmark
Regulation
EU
Climate
Law
Comments
Page
ESRS E4-2 24d Policies against deforestation
x
318
ESRS E5-5 37d Non-recycled waste
x
332
ESRS E5-5 39 Hazardous and radioactive waste
x
332
ESRS 2 SBM-3 (S1) 14f Risk of incidents of forced labour
x
Not applicable
ESRS 2 SBM-3 (S1) 14g Risk of incidents of child labour
x
Not applicable
ESRS S1-1 20 Commitments in the scope of human rights policy
x
334
ESRS S1-1 21 Due diligence strategies in relation to issues covered by the International Labour
Organisation’s relevant conventions
x
334
ESRS S1-1 22 Procedures and measures to prevent trafficking in human beings
x
334
ESRS S1-1 23 Policy or management system for the prevention of accidents at work
x
335
ESRS S1-3 32c Complaint Mechanisms
x
339
ESRS S1-14 88c, 88d Number of work-related deaths and number and rate of work-related
accidents
x
x
350
ESRS S1-14 88e Number of days lost due to injuries, accidents, fatalities or illnesses
x
350
ESRS S1-16 97a Unadjusted gender pay gap
x
x
351
ESRS S1-16 97b Excessive remuneration of the chief executive officer
x
351
ESRS S1-17 103a Cases of discrimination
x
352
ESRS S1-17 104a Non-compliance with UN Guiding Principles on Business and Human Rights
and OECD Guidelines
x
x
Not applicable
ESRS 2 SBM-3 (S2) 11b Significant risk of incidents of child or forced labour in the value chain
x
Not applicable
ESRS S2-1 17 Commitments in the scope of human rights policy
x
352
ESRS S2-1 18 Policies related to male and female employees in the value chain
x
352
ESRS S2-1 19 Non-compliance with UN Guiding Principles on Business and Human Rights
and OECD Guidelines
x
x
Not applicable
ESRS S2-1 19 Due diligence strategies in relation to issues covered by the ILO basic conventions
x
352
ESRS S2-4 36 Human rights issues and incidents related to upstream and downstream value chain
x
354
ESRS S3-1 16 Commitments in the scope of human rights policy
x
356
ESRS S3-1 17 Non-compliance with UN Guiding Principles on Business and Human Rights,
ILO rules or
OECD Guidelines
x
x
Not applicable
ESRS S3-4 36 Issues and incidents related to human rights
x
361
ESRS S4-1 16 Policy related to consumers and end-users
x
364
ESRS S4-1 17 Non-compliance with UN Guiding Principles on Business and Human Rights
and OECD Guidelines
x
x
Not applicable
ESRS S4-4 35 Issues and incidents related to human rights
x
367
ESRS G1-1 10b United Nations Convention against Corruption
x
369
ESRS G1-1 10d Protection of whistleblowers
x
369
ESRS G1-4 24a Fines for violations of anti-corruption laws and laws on combating bribery
x
x
380
ESRS G1-4 24b Standards on anti-corruption and bribery
x
380
244
4.2 ENVIRONMENTAL INFORMATION
4.2.1 Disclosures in accordance with the European Union taxonomy for sustainable activities in 2024
Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on establishing a framework to
facilitate sustainable investment, amending Regulation (EU) 2019/2088 (hereinafter: "EU Environmental Taxonomy", "EU
Taxonomy", "Taxonomy"), requires companies to disclose whether, and to what extent, their business activities comply with
the assumptions of the Taxonomy, classifying, and describing environmentally sustainable activities.
For the period from 1 January 2024 to 31 December 2024, the mandatory disclosures of non-financial companies involve a
percentage share of the economic activity that is taxonomy-eligible, and of the economic activity that is taxonomy-non-
eligible, in terms of the total:
− turnover,
− capital expenditure (CAPEX),
− and operating expenditure (OPEX),
as well as the related qualitative (explanatory) information - specified pursuant to the Commission Delegated Regulation
(EU) 2021/2178
56
, taking into account Commission Delegated Regulation (EU) 2022/1214
57
, amending the above regulation
and Commission Delegated Regulations (EU) 2023/2486
58
and 2023/2485
59
.
The first annual reporting period covered 2021, for which eligibility indicators were reported for two first goals. For 2022,
eligibility and compliance indicators were reported for the first two goals. Reporting for 2023 additionally included eligibility
indicators for the four remaining goals and new activities assigned to the first two goals of the taxonomy (climate change
mitigation and climate change adaptation). For 2024, eligibility and compliance indicators for all six goals are reported in
accordance with the guidelines.
The process of preparing taxonomic disclosures in the KGHM Polska Miedź S.A. Group
Responsibility for the preparation of taxonomic disclosures is assigned to the Group’s Parent Entity. Responsibility for the
preparation and provision of data for the preparation of taxonomic disclosures (the Process) is assigned to the
Management Boards of the subsidiaries of KGHM Polska Miedź S.A. (hereinafter: "Subsidiaries") and, in the case of Divisions
of the Parent Entity, the Division Finance Directors/Executive Directors . In the case of Head Office business units,
responsibility is assigned to their Executive Directors.
Within the Company at a level of Divisions or organisational units of the Head Office and, in the case of the Group, at the
level of Subsidiaries (hereinafter collectively: "Reporting Units"), Taxonomy Coordinators have been appointed as a
permanent function. The Taxonomy Coordinators' main responsibility is to provide reliable, complete and factually correct
information and data necessary for the Process, in particular information on eligible activities and financial data from the
Reporting Unit level.
The Process involves various stages presented below:
− Organisational preparation (Service order and work schedule)
56
Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the
European Parliament and of the Council by specifying the content and presentation of information to be disclosed by
undertakings subject to Articles 19a or 29a of Directive 2013/34/EU concerning environmentally sustainable economic
activities, and specifying the methodology to comply with that disclosure obligation (“Delegated Act related to Article 8 of
the Taxonomy”).
57
Commission Delegated Regulation (EU) 2022/1214 of 9 March 2022 amending Delegated Regulation (EU) 2021/2139 as
regards economic activities in certain energy sectors and Delegated Regulation (EU) 2021/2178 as regards specific public
disclosures for those economic activities.
58
Commission Delegated Regulation (EU) 2023/2486 of 27 June 2023. supplementing Regulation (EU) 2020/852 of the
European Parliament and of the Council by establishing technical qualification criteria to determine the conditions under
which an economic activity qualifies as contributing significantly to the sustainable use and conservation of water and
marine resources, to the transition towards a circular economy to the prevention and control of pollution, or to the
protection and restoration of biodiversity and ecosystems, and whether that economic activity does not cause serious harm
to any other environmental objective, and amending Commission Delegated Regulation (EU) 2021/2178 as regards the
public disclosure of specific information in relation to those economic activities.
59
Commission Delegated Regulation (EU) 2023/2485 of 27June 2023 amending Delegated Regulation (EU) 2021/2139
establishing the additional technical screening criteria for determining the conditions under which an economic activity
qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining
whether that economic activity causes no significant harm to any of the other environmental goals.
245
− Identification of eligible activities (sheets for eligible activities with instructions)
− Acquisition of financial data for eligible activities (completion of financial data in sheets submitted to Reporting Entities)
− Aggregation of financial data for eligible activities (numerators)
− Conducting compliance assessments in terms of material contribution criteria and DNSH for selected activities (carried
out by expert teams in the respective Reporting Unit)
− Conducting a study on minimum guarantees
− Allocation of numerator values to eligible compliant and eligible non-compliant activities
− Determining data for denominators
− Preparation of disclosures (calculation of taxonomic indicators, preparation of explanatory content in accordance with
Commission Delegated Regulation (EU) 2021/2178)
Taxonomy-eligigible activities
As part of the verification of eligibility, an assessment was carried out in terms of a significant contribution to one or more
of the six environmental goals for which technical eligibility criteria have been published. The objectives include:
− Climate change mitigation (CCM)
− Climate change adaptation (CCA)
− Sustainable use and protection of water and marine resources (WTR),
− Transition to a circular economy (CE)
− Pollution prevention and control (PPC),
− Protection and restoration of biodiversity and ecosystems (BIO).
For the purposes of the disclosures for 2024, companies of the KGHM Polska Miedź S.A. Group and Divisions of the Parent
Entity conducted an in-depth analysis of their economic activities, as a result of which, taxonomy- compliant activities have
been identified, i.e. the activities compliant with the description of activities included in the regulation.
The financial data for compliant activities presented in the disclosures below include both the revenues (turnover) from the
taxonomy-compliant economic activities, the related capital expenditure or operating expenditure, as well as purchases
from the compliant activities. The eligibility of an activity was based on a comparison of the respective actual activity with
the description of the activity listed under Annex I or Annex II of Commission Delegated Regulation (EU) 2021/2139, taking
into account Commission Delegated Regulation (EU) 2023/2485 of 27 June 2023 amending the above Regulation and the
description of the activities contained in Commission Delegated Regulation (EU) 2023/2486. The individual types of the
conducted activities have been assigned to only one taxonomy - eligible activity. No part of the revenues, CAPEX and OPEX
has been double-counted. The Parent Entity of the Group oversaw the disclosure process, also verifying the financial data
to be attributed to the individual activities, in order to avoid double-counting.
The KGHM Group conducts its business activity outside of the European Union as well. These activities were assessed for
eligibility and compliance in the same manner as all the activities conducted in the EU.
Table 126. The list of activities in 2024 qualified for the taxonomy on the basis of the legal regulations cited at the outset
includes the following activities:
Type of activity
Turn
over
CAPEX
OPEX
I Climate change
mitigation (CCM)
1.3
Forest management
x
3.1
Manufacture of renewable energy technologies
x
x
3.3
Manufacture of low carbon technologies for transport:
x
x
x
3.6
Manufacture of other low carbon technologies
x
4.1
Electricity production using solar photovoltaic technology
x
x
x
4.15
District heating/cooling systems distribution
x
x
x
4.25
Production of heat/cool using waste heat
x
x
4.30
High-efficiency co-generation of heat/cooling and electricity from gaseous
fossil fuels
x
x
4.9
Transmission and distribution of electricity
x
x
x
5.1
Construction, extension and operation of water collection, treatment and
supply systems
x
x
x
5.2
Renewal of water collection, treatment and supply systems
x
5.3
Construction, extension and operation of waste water collection and
treatment
x
x
x
5.5
Collection and transport of non-hazardous waste in source segregated
fractions
x
x
x
5.9
Material recovery from non-hazardous waste:
x
x
x
6.13
Infrastructure for personal mobility, cycling logistics
x
6.14
Infrastructure for rail transport
x
x
x
6.2
Freight rail transport
x
x
x
6.3
Urban and suburban transport, road passenger transport
x
x
x
246
6.5
Transport by motorbikes, passenger cars and light commercial vehicles
x
x
6.6
Freight transport services by road
x
x
7.1
Construction of new buildings
x
x
7.2
Renovation of existing buildings
x
x
7.3
Installation, maintenance and repair of energy efficiency equipment
x
x
7.4
Installation, maintenance and repair of electric vehicle charging stations in
buildings (and in car parks at buildings)
x
x
7.5
Installation, maintenance and repair of instruments and devices for
measuring, regulation and controlling energy performance of buildings
x
7.6
Installation, maintenance and repair of renewable energy technology systems
x
7.7
Acquisition and ownership of buildings
x
x
8.1
Data processing, hosting and related activities
x
x
III Sustainable use and
protection of water
and marine resources
WTR
2.1
Water supply
x
IV Transition to a
circular economy (CE)
3.5
Application of concrete in civil engineering
x
4.1
Provision of data-driven IT/OT solutions
x
VI Protection and
restoration of
biodiversity and
ecosystems (BIO)
2.1
Hotels, holiday homes, camping grounds and similar establishments
x
x
Assessment of compliance with the Taxonomy
As part of the preparation of the taxonomic disclosures, a compliance analysis of the selected qualifying activities in terms
of meeting the technical qualification criteria was carried out.
For those activities assessed as eligible, expert teams in the respective Reporting Entity assessed compliance in terms of
the criteria of significant contribution and “do no significant harm” (DNSH) by analysing and confirming the individual
technical eligibility criteria. The compliance assessment sheets prepared for the assessment of an activity provide
justification for meeting a criterion by means of an appropriate comment, enumeration or the inclusion of additional
documentation. To confirm that the “climate change adaptation” criterion is met, climate risk assessment documents and
exposure to climate risk have been prepared for selected activities in each unit.
As a result of the analysis, seven activities, all relating to the climate change mitigation target, were classified as taxonomy
compliant (meeting the technical criteria for classification).
Table 127. Activities recognised as compliant in 2024:
Activity
Description of activity according
to the EU Taxonomy
Description of activity in the
KGHM Polska Miedź S.A. Group
Comments on compliance
assessment
1. CCM 4.1 Electricity
production using
solar photovoltaic
technology
Construction or operation of a
photovoltaic electricity generation
facility.
Generation of renewable energy
from photovoltaic farms located
in several cities in Poland.
KGHM operates as described in
Regulation 2021/2139, which is a
sufficient condition to meet the
objective of making a significant
contribution to climate change
mitigation.
2. CCM 4.15
Heating/cooling
distribution
Construction, modernisation and
operation of the heat and cooling
distribution network and
associated infrastructure, the
termination of which is at a
substation or heat exchanger.
Heat production and sales made
to external parties.
For this activity, the criterion of
significant contribution is met
provided that at least one of the
criteria indicated in Regulation
2021/2139 is fulfilled. In the case
of KGHM, compliance was
confirmed for the criterion of an
efficient heating and cooling
system.
3. CCM 4.25
Production of
heating/cooling
energy using waste
heat
Construction and operation of
plants generating heat/cooling
energy from waste heat.
Generation of waste heat and its
sale.
KGHM operates as described in
Regulation 2021/2139, which is a
sufficient condition of making a
significant contribution.
4. CCM 5.1
Construction,
extension and
operation of water
Construction, extension and
operation of water collection,
treatment and supply systems
Operation of water intake
systems and distribution (sale) of
circulating water to third parties.
The activity also includes
expenditures related to the
For this activity, the criterion of
significant contribution is met
provided that at least one of the
criteria indicated in Regulation
2021/2139 is fulfilled. In the case
of KGHM, compliance was
247
collection, treatment
and supply systems
modernisation and extension of
water intake infrastructure.
confirmed for the criterion of
average net energy consumption
for off-take.
5. CCM 5.5 Collection
and transport of non-
hazardous waste in
source segregated
fractions
Selective collection and transport
of non-hazardous waste in
individual or mixed fractions for
preparation for reuse or
recycling.
The business of buying metal
waste that does not qualify as
hazardous waste. Activities
include the preparation and
separation of scrap metal for
further recycling.
KGHM operates as described in
Regulation 2021/2139, which is a
sufficient condition of making a
significant contribution.
6. CCM 5.9 Material
recovery from non-
hazardous waste
Construction and operation of a
facility for sorting and converting
into secondary raw materials
selectively collected non-
hazardous waste streams by
mechanical conversion, for
purposes other than pit filling.
The business of acquiring copper
scrap and copper-bearing
materials, which, after evaluation
and testing, are supplied as
charge material for smelter
furnaces. Dedicated facilities for
separate collection, sorting and
mechanical processing are
operated in connection with this
activity.
This activity has confirmed a
significant contribution in terms
of converting collected (non-
hazardous) waste into secondary
raw materials that are suitable for
replacing primary raw materials
in production processes.
7. CCM 6.2 Freight rail
transport
Purchase, financing, leasing,
rental and operation of freight
transport vehicles on main line
and short line freight railways.
The activity concerns the
maintenance of in-service tank
wagons.
The activity is in line with the
definition of taxonomic activity
6.2. In this case, it was deemed to
be in line with the EU Taxonomy,
based, among other things, on
the technical documentation of
the wagons, which shows that the
wagons are not powered and
therefore do not emit CO2 into
the atmosphere.
For all of the above-mentioned activities, the analysis of the DNSH criteria confirmed that these activities do not cause
serious damage to other environmental objectives. Conducting an examination of the material contribution criteria and
DNSH in parallel precludes a situation where an environmental objective would be pursued at the expense of or in
contradiction to another.
As part of the process, the compliance of the business with the minimum social guarantees was also assessed, which was
carried out by an organisational unit at a level of the Head Office of KGHM Polska Miedź S.A., responsible for managing ESG
issues within the Group.
In this respect, the following areas were investigated: disclosure of strategic and internal affairs, human rights, labour rights,
anti-corruption and anti-bribery, consumer protection, competition, tax policy.
The survey was divided into four stages:
− Procedure-based test, i.e. examination of the KGHM Polska Miedź S.A. Group's internal regulations and procedures in
the context of compliance with the applicable regulations and guidelines in each area.
− Outcome-based test, i.e. the survey based on final convictions/ administrative sanctions against Group Companies or
management staff in relation to each of the areas examined, taking into account their materiality. This stage was carried
out on the basis of statements by individual management bodies of the KGHM S.A. Polska Miedź S.A. Group and
generally-available information.
− An analysis of the databases of the Business and Human Rights Resource Center and the National Contact Point
established in accordance with the OECD Guidelines for Multinational Enterprises, which was carried out on the basis
of publicly available records of the designated organisations.
− General survey of publicly available press information on the activities of the KGHM Polska Miedź S.A. Group.
The examination of each of the stages presented showed that the KGHM Polska Miedź S.A. Group had adopted the policies
and procedures necessary to fulfil the minimum social safeguards.
Changes in the Group structure
The taxonomy indicators were calculated based on the structure of the KGHM Polska Miedź S.A. Group as at 31 December
2024. Changes in the composition of the Group are presented in section 1.2 of this Report. Among the changes affecting
the level of taxonomic indicators, the acquisition of 100% of the companies' shares should be highlighted: INVEST PV40 sp.
z o.o., INVEST PV58 sp. z o.o., INVEST PV59 sp. z o.o., whose business is the production of electricity using photovoltaic
technology.
248
Commentary on the results including the background information
The share of turnover, capital expenditure and operating expenditure from activities consistent with the taxonomy system
in the KGHM Polska Miedź S.A. Group in 2024 is summarised below:
31.12.2024
Turnover from compliant activities
PLN 308.10 million
Consolidated revenue
PLN 35,319.98 million
Indicator of turnover related to compliant activities
0.87%
Capital expenditures related to compliant activities
PLN 240.23 million
Total capital expenditures
PLN 6,120.87 million
Indicator of capital expenditures related to compliant activities
3.92%
Operating expenses related to compliant activities
PLN 43.49 million
Total operating expenses
PLN 2,134.27 million
Indicator of operating expenses related to compliant activities
2.04%
The low percentage of turnover, capital expenditure and operating expenses from the Group's systematic activities is mainly
due to the low proportion of activities eligible for the classification.
Copper production is not included in Annexes I and II of Commission Delegated Regulation (EU) 2021/2139.
Accordingly, the disclosures in terms of taxonomy indicators for 2024 do not include the core business activities carried out
by the KGHM Polska Miedź S.A. Group. Also for this reason, the Group's reported activities are in many cases categorised
as side activities and of little relevance to Group-wide revenues, costs and capital expenditure. Combined with the high
capital intensity (due to the specific nature of the industry), the Group's reported ratios remain at a relatively low level.
Compared to 2023, there is no significant change in the taxonomic indicators. The exception is the compliance rate for
capital expenditure (CAPEX), which increased from 0.61% in 2023 to 3.92% in 2024. This is a direct result of investments
relating to activity 4.1 Photovoltaic power generation.
The KGHM Polska Miedź S.A. Group did not introduce any changes in its accounting policies in the 2024 reporting year.
The calculation of indicators of turnover, capital expenditure and operating expenditure was based on the definitions set
out in Annex I of Commission Delegated Regulation (EU) 2021/2178. Data for the purposes of taxonomy reporting came
from financial and accounting systems. The calculation of the indicators for the Group takes into account the relevant
consolidation exclusions based on the methods used in the financial statements. There was therefore no need to make
significant estimates or allocations for the indicators reported.
In the case of the turnover indicator, all of the assigned eligible turnover pertains to revenue from contracts with customers.
For the calculation of the indicators, the denominator value is the turnover value consistent with the value provided in the
Consolidated annual financial statements of the KGHM Polska Miedź S.A. Group, in Part 2 “Activity segments and revenue
information”, in note 2.3. The turnover indicator does not take into account data on own consumption because there were
no such cases in the Group's eligible activities affecting the value of the turnover indicator numerator.
The CAPEX denominator comprises the items disclosed and described in the 2024 Consolidated financial statements of the
KGHM Polska Miedź S.A. Group, in Part 9 “Non-current assets and related liabilities”, in note 9.1 “Mining and metallurgical
property, plant and equipment and intangible assets”, and in note 9.2 “Other property, plant and equipment and intangible
assets”. The CAPEX denominator includes increases in self-generated or purchased tangible and intangible assets, including
as a result of the acquisition of subsidiaries, and increases in right-of-use assets. There were no acquisitions of investment
properties (IAS 40) or agricultural-related assets (IAS 41) during the reporting period. Included in the numerator of CAPEX
are those items from the denominator that relate to compatible or eligible systematic activities, mainly resulting from
increases in self-generated or purchased fixed assets (69% for qualified activities) and those arising from the acquisition of
subsidiaries (31% for qualified activities). For none of the proposed activities has compliance been demonstrated on the
basis of so-called CAPEX Plans.
The OPEX indicator includes expenditure on on-going operation of property, plant and equipment, i.e. the expenditure
incurred on renovations and maintenance of the individual items of property, plant and equipment. In accordance with the
definition of OPEX, the indicator also incorporates possible costs in the category of research and development and short-
term leasing excluded from CAPEX. In the numerator of OPEX, those items from the denominator that relate to compliant
or qualifying systematic activities have been included. The vast majority were the costs related to the day-to-day operation
of tangible fixed assets (maintenance, repairs, overhauls, etc.).
The disclosures aligned with the Taxonomy of the KGHM Polska Miedź S.A. Group for 2024, prepared in accordance with
the methodology discussed at the beginning of this chapter of the Report and in accordance with Annex II of Commission
Delegated Regulation (EU) 2021/2178, taking into account Commission Delegated Regulation (EU) 2023/2486 amending the
above Regulation and Commission Delegated Regulation (EU) 2023/2485, are presented in the following tables.
249
250
Table 128. Percentage share of turnover in products or services related to Taxonomy-eligible economic activity in 2024
Financial year N
Year
Criteria concerning material contribution
Criteria concerning the DNSH principle (“do
no significant harm”)
Economic activity (1)
Code or codes (2)
Turnover (3)
Turnover share, year
2024 (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water and marine
resources (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum safeguards
(17)
Participation in
taxonomy-compliant
activity (A.1.) or
taxonomy-eligible
activity (A.2.)
Turnover,
year 2023 (18)
Category
supportin
g
activities
(19)
Category
transition
activities
(20)
Text
[PLN million]
%
Y
60
/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
Y
A. TAXONOMY-ELIGIBLE ACTIVITY
A.1 Types of environmentally sustainable activities (Taxonomy-compliant)
Electricity production using solar photovoltaic
technology
CCM 4.1
12.91
0.04%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
N/A
Y
Y
Y
-
District heating/cooling systems distribution
CCM 4.15
0.81
0.00%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
Y
Y
N/A
Y
Y
0.00%
Production of heat/cool using waste heat
CCM 4.25
1.52
0.00%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
Y
Y
Y
Y
0.01%
Construction, extension and operation of water
collection, treatment and supply systems
CCM 5.1
-
-
Y
-
-
-
-
-
-
-
-
-
-
-
-
0.01%
Collection and transport of non-hazardous waste in
source segregated fractions
CCM 5.5
270.60
0.77%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
N/A
Y
N/A
Y
0.78%
Material recovery from non-hazardous waste
CCM 5.9
22.26
0.06%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
N/A
N/A
Y
Y
0.10%
Turnover due to environmentally sustainable activities
(Taxonomy-compliant) (A.1)
308.10
0.87%
100.0%
0%
0%
0%
0%
0%
0.90%
Including supporting activities
-
%
%
%
%
%
%
%
%
E
Including transition-related
-
%
%
%
Y
A.2 Taxonomy-eligible but not environmentally sustainable activity (activities non-compliant with the Taxonomy)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Forest management
CCM 1.3
0.44
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Hotels, holiday homes, camping grounds and similar
establishments
BIO 2.1
0.87
0.00%
N/EL
N/EL
N/EL
N/EL
N/EL
EL
0.00%
Manufacture of renewable energy technologies
CCM 3.1
-
-
-
-
-
-
-
-
0.00%
Manufacture of low carbon technologies for transport
CCM 3.3
13.10
0.04%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Electricity production using solar photovoltaic
technology
CCM 4.1
0.01
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Transmission and distribution of electricity
CCM 4.9
39.46
0.11%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.12%
District heating/cooling systems
CCM 4.15
88.41
0.25%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.26%
Production of heat/cool using waste heat
CCM 4.25
0.36
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
Construction, extension and operation of water
collection, treatment and supply systems
CCM 5.1
3.20
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
Construction, extension and operation of waste water
collection and treatment
CCM 5.3
1.18
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Freight rail transport
CCM 6.2
73.63
0.21%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.20%
60
Y - Yes, taxonomy-eligible activity and taxonomy-compliant activity for the corresponding environmental objective
N - No, taxonomy-eligible activity but non-compliant with the taxonomy for the corresponding environmental objective
EL - taxonomy-eligible activity for the corresponding environmental objective
N/EL - taxonomy non-eligible activity for the corresponding objective
251
Financial year N
Year
Criteria concerning material contribution
Criteria concerning the DNSH principle (“do
no significant harm”)
Economic activity (1)
Code or codes (2)
Turnover (3)
Turnover share, year
2024 (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water and marine
resources (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum safeguards
(17)
Participation in
taxonomy-compliant
activity (A.1.) or
taxonomy-eligible
activity (A.2.)
Turnover,
year 2023 (18)
Category
supportin
g
activities
(19)
Category
transition
activities
(20)
Urban and suburban transport, road passenger
transport
CCM 6.3
3.95
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.01%
Infrastructure for rail transport
CCM 6.14
0.78
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Acquisition and ownership of buildings
CCM 7.7
5.02
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.01%
Data processing, hosting and related activities
CCM 8.1
13.66
0.04%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.04%
Turnover from Taxonomy-eligible but not environmentally
sustainable activity (activities non-compliant with the Taxonomy)
(A.2)
244.07
0.69%
99.6%
0%
0%
0%
0%
0.7%
0.66%
A. Turnover from Taxonomy-eligible activity (A.1+A.2)
552.17
1.56%
99.8%
0%
0%
0%
0%
0.2%
1.55%
B. TAXONOMY NON-ELIGIBLE ACTIVITY
Turnover from Taxonomy non-eligible activities
34,767.81
98.44%
TOTAL
35,319.98
100%
The total value of eligible turnover was PLN 552.17 million, of which activities with the turnover value of PLN 308.10 million were defined as the turnover of Taxonomy-eligible activities.
252
Table 129. Percentage share of capital expenditure in products or services related to a Taxonomy-compliant economic activity in 2024
Financial year N
Year
Criteria concerning material contribution
Criteria concerning the DNSH principle (“do
no significant harm”)
Economic activity (1)
Code or codes (2)
Capital expenditure
(3)
Percentage of capital
expenditure,
year 2024 (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water and marine
resources (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum safeguards
(17)
Participation in
taxonomy-compliant
activity (A.1.) or
taxonomy-eligible
activity (A.2.)
Capital expenditure,
year 2023 (18)
Category
supportin
g
activities
(19)
Category
transition
activities
(20)
Text
[PLN million]
%
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
Y
A. TAXONOMY-ELIGIBLE ACTIVITY
A.1 Types of environmentally sustainable activities (Taxonomy-compliant)
Electricity production using solar photovoltaic
technology
CCM 4.1
202.24
3.30%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
N/A
Y
Y
Y
-
Construction, extension and operation of water
collection, treatment and supply systems
CCM 5.1
0.00
0.00%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
Y
N/A
N/A
Y
Y
0.06%
Collection and transport of non-hazardous waste in
source segregated fractions
CCM 5.5
25.89
0.42%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
N/A
Y
N/A
Y
0.45%
Material recovery from non-hazardous waste
CCM 5.9
12.10
0.20%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
N/A
N/A
Y
Y
0.09%
Capital expenditure for environmentally sustainable activities
(Taxonomy-compliant) (A.1)
240.23
3.92%
100%
0%
0%
0%
0%
0%
0.61%
Including supporting activities
-
%
%
%
%
%
%
%
%
E
Including transition-related
-
%
%
%
Y
A.2 Taxonomy-eligible but not environmentally sustainable activity (activities non-compliant with the Taxonomy)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Water supply
WTR 2.1
13.63
0.22%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
-
Manufacture of renewable energy technologies
CCM 3.1
1.27
0.02%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.03%
Manufacture of low carbon technologies for transport
CCM 3.3
1.13
0.02%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Maintenance of roads and highways
CE 3.4
-
-
-
-
-
-
-
-
0.00%
Electricity production using solar photovoltaic
technology
CCM 4.1
0.11
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.51%
Transmission and distribution of electricity
CCM 4.9
30.69
0.50%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.62%
District heating/cooling systems
CCM 4.15
25.35
0.41%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.45%
High-efficiency co-generation of heat/cooling and
electricity from gaseous fossil fuels
CCM 4.30
5.13
0.08%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
Construction, extension and operation of water
collection, treatment and supply systems
CCM 5.1
65.56
1.07%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.46%
Renewal of water collection, treatment and supply
systems
CCM 5.2
0.55
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.04%
Construction, extension and operation of waste water
collection and treatment
CCM 5.3
33.45
0.55%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.08%
Freight rail transport
CCM 6.2
37.24
0.61%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.46%
Urban and suburban transport, road passenger
transport
CCM 6.3
0.74
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5
0.27
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.01%
Freight transport services by road
CCM 6.6
1.27
0.02%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.02%
Infrastructure for personal mobility, cycling logistics
CCM 6.13
0.01
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
Infrastructure for rail transport
CCM 6.14
85.46
1.40%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.27%
Infrastructure enabling low-carbon road transport and
public transport
CCA 6.15
-
-
-
-
-
-
-
-
0.00%
253
Financial year N
Year
Criteria concerning material contribution
Criteria concerning the DNSH principle (“do
no significant harm”)
Economic activity (1)
Code or codes (2)
Capital expenditure
(3)
Percentage of capital
expenditure,
year 2024 (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water and marine
resources (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum safeguards
(17)
Participation in
taxonomy-compliant
activity (A.1.) or
taxonomy-eligible
activity (A.2.)
Capital expenditure,
year 2023 (18)
Category
supportin
g
activities
(19)
Category
transition
activities
(20)
Construction of new buildings
CCM 7.1
23.48
0.38%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.11%
Renovation of existing buildings
CCM 7.2
74.57
1.22%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.82%
Installation, maintenance and repair of energy
efficiency equipment
CCM 7.3
4.54
0.07%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.27%
Installation, maintenance and repair of electric vehicle
charging stations in buildings (and in car parks at
buildings)
CCM 7.4
0.36
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
Installation, maintenance and repair of renewable
energy technology systems
CCM 7.6
0.01
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
Acquisition and ownership of buildings
CCM 7.7
0.01
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
Data processing, hosting and related activities
CCM 8.1
-
-
-
-
-
-
-
-
0.00%
Capital expenditure from Taxonomy-eligible but not
environmentally sustainable activity (activities non-compliant with
the Taxonomy) (A.2)
404.83
6.61%
96.6%
0%
3.4%
0%
0%
0%
4.15%
A. Capital expenditure from Taxonomy-eligible activity (A.1+A.2)
645.06
10.54%
97.9%
0%
2.1%
0%
0%
0%
4.76%
B. TAXONOMY NON-ELIGIBLE ACTIVITY
Capital expenditure from Taxonomy non-eligible activities
5,475.81
89.46%
TOTAL
6,120.87
100%
The total value of eligible turnover was PLN 645.06 million, of which activities with the turnover value of PLN 240.23 million were defined as the capital expenditure of Taxonomy-
eligible activities.
254
Table 130. Percentage share of operating expenditure from products or services related to Taxonomy-compliant economic activity in 2024.
Financial year N
Year
Criteria concerning material contribution
Criteria concerning the DNSH principle (“do
no significant harm”)
Economic activity (1)
Code or codes (2)
Operating
expenditure (3)
Percentage of
operating expenses,
Year 2024 (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water and marine
resources (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum safeguards
(17)
Participation in
taxonomy-compliant
activity (A.1.) or
taxonomy-eligible
activity (A.2.)
Operating expenses,
year 2023 (18)
Category
supportin
g
activities
(19)
Category
transition
activities
(20)
Text
[PLN million]
%
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N; N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
Y
A. TAXONOMY-ELIGIBLE ACTIVITY
A.1 Types of environmentally sustainable activities (Taxonomy-compliant)
Electricity production using solar photovoltaic
technology
CCM 4.1
0.66
0.03%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
N/A
Y
Y
Y
-
District heating/cooling systems distribution
CCM 4.15
3.00
0.14%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
Y
Y
N/A
Y
Y
0.16%
Production of heat/cool using waste heat
CCM 4.25
16.50
0.77%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
Y
Y
Y
Y
0.62%
Construction, extension and operation of water
collection, treatment and supply systems
CCM 5.1
8.53
0.40%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
Y
N/A
N/A
Y
Y
0.41%
Collection and transport of non-hazardous waste in
source segregated fractions
CCM 5.5
6.67
0.31%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
N/A
Y
N/A
Y
0.48%
Material recovery from non-hazardous waste:
CCM 5.9
3.01
0.14%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
N/A
N/A
Y
Y
0.16%
Freight rail transport
CCM 6.2
5.13
0.24%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Y
N/A
Y
Y
N/A
Y
0.30%
Operating expenditure for environmentally sustainable activities
(Taxonomy-compliant) (A.1)
43.49
2.04%
100%
%
%
%
%
%
2.13%
Including supporting activities
-
%
%
%
%
%
%
%
%
E
Including transition-related
-
%
%
%
Y
A.2 Taxonomy-eligible but not environmentally sustainable activity (activities non-compliant with the Taxonomy)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Hotels, holiday homes, camping grounds and similar
establishments
BIO 2.1
0.35
0.02%
N/EL
N/EL
N/EL
N/EL
N/EL
EL
0.00%
Manufacture of renewable energy technologies
CCM 3.1
0.06
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Manufacture of low carbon technologies for transport
needs
CCM 3.3
0.60
0.03%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.03%
Application of concrete in civil engineering
CE 3.5
0.03
0.00%
N/EL
N/EL
N/EL
N/EL
EL
N/EL
0.00%
Manufacture of other low carbon technologies
CCM 3.6
0.63
0.03%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.03%
Provision of data-driven IT/OT solutions
CE 4.1
0.18
0.01%
N/EL
N/EL
N/EL
N/EL
EL
N/EL
-
Transmission and distribution of electricity
CCM 4.9
18.75
0.88%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.69%
District heating/cooling systems
CCM 4.15
15.15
0.71%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.73%
Production of heat/cool using waste heat
CCM 4.25
0.22
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
High-efficiency co-generation of heat/cooling and
electricity from gaseous fossil fuels
CCM 4.30
25.72
1.21%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1.08%
Construction, extension and operation of water
collection, treatment and supply systems
CCM 5.1
5.13
0.24%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.16%
255
Financial year N
Year
Criteria concerning material contribution
Criteria concerning the DNSH principle (“do
no significant harm”)
Economic activity (1)
Code or codes (2)
Operating
expenditure (3)
Percentage of
operating expenses,
Year 2024 (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water and marine
resources (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum safeguards
(17)
Participation in
taxonomy-compliant
activity (A.1.) or
taxonomy-eligible
activity (A.2.)
Operating expenses,
year 2023 (18)
Category
supportin
g
activities
(19)
Category
transition
activities
(20)
Construction, extension and operation of waste water
collection and treatment
CCM 5.3
1.93
0.09%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.11%
Freight rail transport
CCM 6.2
46.52
2.18%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1.89%
Urban and suburban transport, road passenger
transport
CCM 6.3
1.65
0.08%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.05%
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5
0.22
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.02%
Freight transport services by road
CCM 6.6
0.29
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.10%
Infrastructure for rail transport
CCM 6.14
13.54
0.63%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.63%
Infrastructure enabling low-carbon road transport and
public transport
CCA 6.15
-
-
-
-
-
-
-
-
0.15%
Construction of new buildings
CCM 7.1
0.05
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.02%
Renovation of existing buildings
CCM 7.2
27.27
1.28%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1.08%
Installation, maintenance and repair of energy
efficiency equipment
CCM 7.3
0.80
0.04%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.12%
Installation, maintenance and repair of electric vehicle
charging stations in buildings (and in car parks at
buildings)
CCM 7.4
0.01
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Installation, maintenance and repair of instruments
and devices for measuring, regulation and controlling
energy performance of buildings
CCM 7.5
0.35
0.02%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-
Acquisition and ownership of buildings
CCM 7.7
-
-
-
-
-
-
-
-
0.01%
Data processing, hosting and related activities
CCM 8.1
11.34
0.53%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.47%
Activities related to the production of motion pictures,
video recordings, television programs , sound
recordings and music recordings
CCA 13.3
-
-
-
-
-
-
-
-
0.00%
Operating expenditure from taxonomy-eligible but not
environmentally sustainable activity (activities non-compliant with
the Taxonomy) (A.2)
170.79
8.00%
99.7%
0%
0%
0%
0.1%
0.2%
7.40%
214.28
10.04%
99.7%
0%
0%
0%
0.1%
0.02%
9.53%
256
Financial year N
Year
Criteria concerning material contribution
Criteria concerning the DNSH principle (“do
no significant harm”)
Economic activity (1)
Code or codes (2)
Operating
expenditure (3)
Percentage of
operating expenses,
Year 2024 (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water and marine
resources (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum safeguards
(17)
Participation in
taxonomy-compliant
activity (A.1.) or
taxonomy-eligible
activity (A.2.)
Operating expenses,
year 2023 (18)
Category
supportin
g
activities
(19)
Category
transition
activities
(20)
A. Operating expenditure from Taxonomy-eligible activity
(A.1+A.2)
B. TAXONOMY NON-ELIGIBLE ACTIVITY
Operating expenditure from Taxonomy non-eligible activities
1,919.99
89.96%
TOTAL
2,134.27
100%
The total value of eligible operating expenditure was PLN 214.28 million, of which activities related to operating expenditure with the value of PLN 43.49 million were defined as the
expenditure of Taxonomy-eligible activities.
257
Key performance indicators prepared in accordance with Delegated Regulation 2023/2486
Proportion of turnover / Total turnover
Goals
Compliance with Taxonomy by goals
Eligibility for Taxonomy by goals
CCM
0.87%
1.56%
CCA
-
-
WTR
-
-
CE
-
-
PPC
-
-
BIO
-
0.002%
Proportion of capital expenditure / Total capital expenditure
Goals
Compliance with Taxonomy by goals
Eligibility for Taxonomy by goals
CCM
3.92%
10.32%
CCA
-
-
WTR
-
0.22%
CE
-
-
PPC
-
-
BIO
-
-
Proportion of operating expenditure / Total operating expenditure
Goals
Compliance with Taxonomy by goals
Eligibility for Taxonomy by goals
CCM
2.04%
9.98%
CCA
-
-
WTR
-
-
CE
-
0.01%
PPC
-
-
BIO
-
0.02%
Annex no. 4 to this Report presents the disclosure in accordance with Annex III of Delegated Regulation 2022/1214,
supplementing Delegated Regulation 2021/2178 with Annex XII, concerning standard templates for the disclosure of
information referred to in Article 8(6) and (7) - i.e. for activities related to nuclear power and natural gas.
258
Disclosure in accordance with Annex III of Commission Delegated Regulation (EU) 2022/1214, supplementing
Commission Delegated Regulation (EU) 2021/2178 with Annex XII, concerning standard templates for the disclosure
of information referred to in Article 8(6) and (7) - i.e. for activities related to nuclear power and natural gas [for
consolidated data]
Turnover
Table 131. Taxonomy disclosure: Turnover - Template 1 Activities related to nuclear power and natural gas.
Row
Activities related to nuclear power
1.
The company conducts research, development, demonstration and deployment of innovative electricity generation
facilities that produce energy through nuclear processes with minimum fuel cycle waste, finances or has exposure to
such activity.
NO
2.
The company conducts the construction and safe operation of new nuclear power facilities to generate electricity or
process heat, including for district heating or industrial processes such as hydrogen production, as well as their
modernisation in terms of safety using the best available technology, finances or has exposure to such activity.
NO
3.
The company conducts safe operation of existing nuclear power facilities generating electricity or process heat, including
for district heating or industrial processes such as hydrogen production, as well as their modernisation in terms of safety,
finances or has exposure to such activity.
NO
Activities related to natural gas
4.
The company conducts the construction or operates facilities for generation of electricity using gaseous fossil fuels,
finances or has exposure to such activity.
NO
5.
The company conducts the construction, modernisation or operates facilities for combines generation of heat/cooling
and electricity using gaseous fossil fuels, finances or has exposure to such activity.
NO
6.
The company conducts the construction, modernisation or operates facilities for heat generation producing heat/cooling
energy using gaseous fossil fuels, finances or has exposure to such activity.
NO
259
Table 132. Taxonomy disclosure: Turnover - Template 2 Taxonomy-compliant economic activity (denominator)
Row
Types of economic activity
Amount and share (information to be provided in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
1.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.26 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
2.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.27 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
3.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.28 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
4.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.29 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
5.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.30 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
6.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.31 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
7.
Amount and share of other taxonomy-compliant economic
activities not listed in rows 1-6 above in the denominator of the
applicable key performance indicator
308.10
0.9%
308.10
0.9%
0.00
0%
8.
Total applicable key performance indicator
35,319.98
35,319.98
0.00
260
Table 133. Taxonomy disclosure: Turnover - Template 3 Taxonomy-compliant economic activity (numerator)
Row
Types of economic activity
Amount and share (information to be provided in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
1.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.26 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
2.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.27 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
3.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.28 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
4.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.29 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
5.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.30 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
6.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.31 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
7.
The amount and share of other taxonomy-compliant economic
activities not listed in rows 1-6 above in the denominator of the
applicable key performance indicator
308.10
100%
308.10
100%
0.00
0%
8.
Total amount and total share of other taxonomy-compliant
economic activities in the denominator of the applicable key
performance indicator
308.10
100%
308.10
100%
0.00
0%
261
Table 134. Taxonomy disclosure: Turnover - Template 4 Taxonomy-eligible but taxonomy non-compliant economic
activity
Row
Types of economic activity
Amount and share (information to be provided in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
1.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.26 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
2.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.27 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
3.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.28 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
4.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.29 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
5.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.30 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
6.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.31 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
7.
Amount and share of other taxonomy-eligible but taxonomy
non-compliant economic activities not listed in rows 1-6 above
in the denominator of the applicable key performance
indicator
243.20
0.7%
243.20
0.7%
0.00
0%
8.
Total amount and total share of taxonomy-eligible but
taxonomy non-compliant economic activities in the
denominator of the applicable key performance indicator
243.20
0.7%
243.20
0.7%
0.00
0%
262
Table 135. Taxonomy disclosure: Turnover - Template 5 Taxonomy non-eligible economic activity
Row
Types of economic activity
Amount (in
million
PLN)
%
1.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.26
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
2.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.27
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
3.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.28
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
4.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.29
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
5.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.30
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
6.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.31
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
7.
Amount and share of other taxonomy non-eligible economic activities not listed in rows 1-6
above in the denominator of the applicable key performance indicator
34,767.81
98.4%
8.
Total amount and total share of taxonomy non-eligible economic activities in the denominator
of the applicable key performance indicator
34,767.81
98.4%
263
Capital expenditures
Table 136. Taxonomy disclosure: Capital expenditures - Template 1 Activities related to nuclear power and natural gas.
Row
Activities related to nuclear power
1.
The company conducts research, development, demonstration and deployment of innovative electricity generation
facilities that produce energy through nuclear processes with minimum fuel cycle waste, finances or has exposure to
such activity.
NO
2.
The company conducts the construction and safe operation of new nuclear power facilities to generate electricity or
process heat, including for district heating or industrial processes such as hydrogen production, as well as their
modernisation in terms of safety using the best available technology, finances or has exposure to such activity.
NO
3.
The company conducts safe operation of existing nuclear power facilities generating electricity or process heat, including
for district heating or industrial processes such as hydrogen production, as well as their modernisation in terms of safety,
finances or has exposure to such activity.
NO
Activities related to natural gas
4.
The company conducts the construction or operates facilities for generation of electricity using gaseous fossil fuels,
finances or has exposure to such activity.
NO
5.
The company conducts the construction, modernisation or operates facilities for combines generation of heat/cooling
and electricity using gaseous fossil fuels, finances or has exposure to such activity.
NO
6.
The company conducts the construction, modernisation or operates facilities for heat generation producing heat/cooling
energy using gaseous fossil fuels, finances or has exposure to such activity.
NO
264
Table 137. Taxonomy disclosure: Capital expenditure - Template 2 Taxonomy-compliant economic activity (denominator)
Row
Types of economic activity
Amount and share (information to be provided in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
1.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.26 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
2.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.27 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
3.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.28 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
4.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.29 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
5.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.30 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
6.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.31 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
7.
Amount and share of other taxonomy-compliant economic
activities not listed in rows 1-6 above in the denominator of the
applicable key performance indicator
240.23
3.9%
240.23
3.9%
0.00
0%
8.
Total applicable key performance indicator
6,120.87
6,120.87
0.00
265
Table 138. Taxonomy disclosure: Capital expenditure - Template 3 Taxonomy-compliant economic activity (numerator)
Row
Types of economic activity
Amount and share (information to be provided in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
1.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.26 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
2.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.27 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
3.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.28 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
4.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.29 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
5.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.30 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
6.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.31 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
7.
The amount and share of other taxonomy-compliant economic
activities not listed in rows 1-6 above in the denominator of the
applicable key performance indicator
240.23
100%
240.23
100%
0.00
0%
8.
Total amount and total share of other taxonomy-compliant
economic activities in the denominator of the applicable key
performance indicator
240.23
100%
240.23
100%
0.00
0%
266
Table 139. Taxonomy disclosure: Capital expenditure - Template 4 Taxonomy-eligible but taxonomy non-compliant
economic activity
Row
Types of economic activity
Amount and share (information to be provided in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
1.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.26 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
2.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.27 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
3.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.28 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
4.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.29 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
5.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.30 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
5.13
0.1%
5.13
0.1%
0.00
0%
6.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.31 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
7.
Amount and share of other taxonomy-eligible but taxonomy
non-compliant economic activities not listed in rows 1-6 above
in the denominator of the applicable key performance
indicator
386.07
6.3%
386.07
6.3%
0.00
0%
8.
Total amount and total share of taxonomy-eligible but
taxonomy non-compliant economic activities in the
denominator of the applicable key performance indicator
391.20
6.4%
391.20
6.4%
0.00
0%
267
Table 140. Taxonomy disclosure: Capital expenditures - Template 5 Taxonomy non-eligible economic activity
Row
Types of economic activity
Amount (in
million
PLN)
%
1.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.26
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
2.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.27
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
3.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.28
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
4.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.29
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
5.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.30
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
6.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.31
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
7.
Amount and share of other taxonomy non-eligible economic activities not listed in rows 1-6
above in the denominator of the applicable key performance indicator
5,475.81
89.5%
8.
Total amount and total share of taxonomy non-eligible economic activities in the denominator
of the applicable key performance indicator
5,475.81
89.5%
268
Operating expenditure
Table 141. Taxonomy disclosure: Operating expenditure - Template 1 Activities related to nuclear power and natural gas.
Row
Activities related to nuclear power
1.
The company conducts research, development, demonstration and deployment of innovative electricity generation
facilities that produce energy through nuclear processes with minimum fuel cycle waste, finances or has exposure to
such activity.
NO
2.
The company conducts the construction and safe operation of new nuclear power facilities to generate electricity or
process heat, including for district heating or industrial processes such as hydrogen production, as well as their
modernisation in terms of safety using the best available technology, finances or has exposure to such activity.
NO
3.
The company conducts safe operation of existing nuclear power facilities generating electricity or process heat, including
for district heating or industrial processes such as hydrogen production, as well as their modernisation in terms of safety,
finances or has exposure to such activity.
NO
Activities related to natural gas
4.
The company conducts the construction or operates facilities for generation of electricity using gaseous fossil fuels,
finances or has exposure to such activity.
NO
5.
The company conducts the construction, modernisation or operates facilities for combines generation of heat/cooling
and electricity using gaseous fossil fuels, finances or has exposure to such activity.
YES
6.
The company conducts the construction, modernisation or operates facilities for heat generation producing heat/cooling
energy using gaseous fossil fuels, finances or has exposure to such activity.
NO
269
Table 142. Taxonomy disclosure: Operating expenditure - Template 2 Taxonomy-compliant economic activity
(denominator)
Row
Types of economic activity
Amount and share (information to be provided in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
1.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.26 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
2.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.27 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
3.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.28 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
4.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.29 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
5.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.30 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
6.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.31 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
7.
Amount and share of other taxonomy-compliant economic
activities not listed in rows 1-6 above in the denominator of the
applicable key performance indicator
43.49
2.0%
43.49
2.0%
0.00
0%
8.
Total applicable key performance indicator
2,134.27
2,134.27
0.00
270
Table 143. Taxonomy disclosure: Operating expenditure - Template 3 Taxonomy-compliant economic activity
(numerator)
Row
Types of economic activity
Amount and share (information to be provided in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
1.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.26 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
2.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.27 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
3.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.28 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
4.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.29 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
5.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.30 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
6.
The amount and share of taxonomy-compliant economic
activity referred to in Section 4.31 of Annexes I and II of
Delegated Regulation (EU) 2021/2139 in the denominator of
the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
7.
The amount and share of other taxonomy-compliant economic
activities not listed in rows 1-6 above in the denominator of the
applicable key performance indicator
43.49
100%
43.49
100%
0.00
0%
8.
Total amount and total share of other taxonomy-compliant
economic activities in the denominator of the applicable key
performance indicator
43.49
100%
43.49
100%
0.00
0%
271
Table 144. Taxonomy disclosure: Operating expenditure - Template 4 Taxonomy-eligible but taxonomy non-compliant
economic activity
Row
Types of economic activity
Amount and share (information to be provided in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
Amount
(in million
PLN)
%
1.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.26 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
2.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.27 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
3.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.28 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
4.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.29 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
5.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.30 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
25.72
1.2%
25.72
1.2%
0.00
0%
6.
The amount and share of taxonomy-eligible but taxonomy
non-compliant economic activity referred to in Section 4.31 of
Annexes I and II of Delegated Regulation (EU) 2021/2139 in the
denominator of the applicable key performance indicator
0.00
0%
0.00
0%
0.00
0%
7.
Amount and share of other taxonomy-eligible but taxonomy
non-compliant economic activities not listed in rows 1-6 above
in the denominator of the applicable key performance
indicator
143.87
6.7%
143.87
6.7%
0.00
0%
8.
Total amount and total share of taxonomy-eligible but
taxonomy non-compliant economic activities in the
denominator of the applicable key performance indicator
168.69
7.9%
169.59
7.9%
0.00
0%
272
Table 145. Taxonomy disclosure: Operating expenditures - Template 5 Taxonomy non-eligible economic activity
Row
Types of economic activity
Amount (in
million
PLN)
%
1.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.26
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
2.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.27
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
3.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.28
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
4.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.29
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
5.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.30
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
6.
The amount and share of taxonomy non-eligible economic activity referred to in Section 4.31
of Annexes I and II of Delegated Regulation (EU) 2021/2139 in the denominator of the
applicable key performance indicator
0.00
0%
7.
Amount and share of other taxonomy non-eligible economic activities not listed in rows 1-6
above in the denominator of the applicable key performance indicator
1,920.62
90.0%
8.
Total amount and total share of taxonomy non-eligible economic activities in the denominator
of the applicable key performance indicator
1,920.62
90.0%
273
4.2.2 [E1] Climate change
[E1-1] Plan of transition to climate change mitigation needs
The Group does not have a formalised Transition Plan for climate change mitigation in place. The Group will adopt the
Transition Plan by 30 June 2030, in accordance with applicable regulations.
As the majority of GHG emissions in the Group come from the technological processes of the Company (more than 68% of
Scope 1 emissions and approximately 80% of Scope 2 emissions) actions related to the preparation of a decarbonisation
plan for the operations of KGHM Polska Miedź S.A. were taken. In January 2024, the Decarbonisation Program of KGHM
Polska Miedź S.A. was adopted by a resolution of the Management Board
61
, defining actions for climate change mitigation
in the short-term until 2030 and in the long-term until 2050. “The Decarbonisation Program” is a formalised element of the
Transition Plan, which can be regarded as an introduction to the development of the Transition Plan in the future.
The main directions and goals set forth in the Climate Policy and the Decarbonisation Program of KGHM Polska Miedź S.A.
are reflected in the existing Strategy of the KGHM Polska Miedź S.A. Group to the year 2030 with an outlook to 2040.
The intermediate target adopted in the Climate Policy of KGHM Polska Miedź S.A. (reduction of Scope 1 and 2 emissions by
30%) is lower than the science-based emission reduction scenario consistent with limiting global warming to 1.5 °C
amounting to 42% by 2030
62
. The target adopted is lower due to the fact that emission reductions in line with the scientific
target for energy-intensive companies in countries where the national energy mix is based on fossil fuels are not feasible
without a radical change in the national energy mix. Furthermore, due to the early stage of development of most
decarbonisation technologies, it is not possible to significantly reduce direct emissions by 2030.
The Company's main activities up to 2030 will be aimed at reducing Scope 2 indirect emissions, while key activities to reduce
Scope 1 direct emissions will be implemented successively by 2050.
The main direction of decarbonisation in the area of indirect emissions of KGHM PM S.A. (Scope 2 - by market-based
method) will be a gradual withdrawal from the use of market-sourced electricity to an increasing use of own energy sources.
The development of own sources will include the construction or acquisition of renewable energy installations (photovoltaic
plants and wind power). These activities are included in the strategy of KGHM Polska Miedź S.A. under the Strategic Program
- Energy Development Program.
Energy Development Program
The strategic goal of KGHM Polska Miedź S.A. related to energy transition in the 2030 perspective assumes covering at least
50% (i.e. approximately 1 500 GWh) of the demand for electricity from own sources, including renewable energy sources.
Analysis of the market-economic-political environment of KGHM Polska Miedź S.A. indicates the need to diversify the means
of covering demand for electricity. Based on the analyses carried out and the current strategic directions of KGHM Polska
Miedź S.A., activities related to the achievement of strategic objectives were set, consisting, inter alia, of the acquisition of
projects from the market (M&A) and the preparation and construction of own RES installations on land owned by KGHM
(under own development).
Improvement of energy efficiency
Improving energy efficiency will also play an important role in the decarbonisation process. The ISO 50001-compliant Energy
Management System implemented in 2017 by all Divisions of the Company has a systematic effect on reducing the Scope
2 greenhouse gas emissions.
Plans to reduce direct emissions
Within the key directions for reducing the carbon footprint in the area of direct emissions, the construction of a CCS/CCU
facility (Carbon Capture and Storage/Carbon Capture and Utilisation) at the Głogów Copper Smelter and Refinery is being
considered.
In 2024, conceptual and R&D work was carried out on the development of a CO
2
capture facility at the Głogów Copper
Smelter and Refinery. Further work on the project concept and financing is planned. Measures to reduce Scope 1 direct
emissions through the implementation of CCS/CCU facilities in the metallurgical core business will be progressively
implemented in the 2050 timeframe.
61
Resolution of the Management Board of KGHM Polska Miedź S.A No. 28/XI/2024 dated 31 January 2024 regarding approval of the
„Decarbonisation Program of KGHM Polska Miedź S.A. STAGE 1 - to the year 2030 with an outlook to 2050”
62
based on “Pathways to Net-zero -SBTi Technical Summary” (version 1.0, October 2021)
274
[E1-2] Policies related to climate change mitigation and adaptation
Climate policy of KGHM Polska Miedź S.A.
The Climate Policy of KGHM Polska Miedź S.A. defines the framework for managing sustainability issues, focusing on
reducing greenhouse gas emissions, adapting the Company's operations to climate change and implementing measures to
minimise the impact of the organisation on the environment.
The majority of the Group's greenhouse gas emissions are attributable to the activities of KGHM Polska Miedź S.A., and
therefore the Climate Policy of KGHM Polska Miedź S.A. was developed primarily for these activities.
The Group does not have a formalised climate policy. Work on a climate policy for the Group is at an early stage and will
continue.
The Climate policy of KGHM Polska Miedź S.A. is a directional document, addressed to both external and internal
stakeholders, whose goal is to present the climate ambitions of KGHM Polska Miedź S.A. and to specify the necessary scope
of process and organisational changes for their implementation and continuous improvement. The climate policy of KGHM
Polska Miedź S.A. supports the implementation of the UN Sustainable Development Goals
63
in terms of ensuring affordable
access to stable, sustainable and modern energy for all, ensuring sustainable consumption and production patterns and
taking action to combat climate change and its impacts (Goals: 7, 12, 13).
The Climate Policy of KGHM Polska Miedź S.A. takes into account both significant impacts as well as risks and opportunities
arising from climate change. The main positive impacts include the production of metals that are crucial for a low-carbon
economy, which supports global technological transformation and adaptation to climate change. Negative impacts, on the
other hand, include high greenhouse gas emissions in Scopes 1, 2 and 3, resulting from our own production activities,
electricity purchases and the supply chain.
The main risks related to climate policy include regulatory risks associated with changes in CO
2
emission regulations and
physical risks, including sudden and chronic climate change that could affect operations. Moreover, the Company faces
technological risks resulting from the necessity to implement new low-carbon solutions, reputational risks related to the
perception of its operations by stakeholders, and market risks resulting from changes in demand for its products.
As part of the third stage of the risk management process, an in-depth cause-and-effect analysis is carried out, part of which
is, among other things, a resilience analysis containing ways of dealing with the risks which, in line with the assumptions of
the corporate risk management process, is intended to enable a decision to maintain or possibly change the current
management. The directional decision is called Risk Response and, in the case of climate risk, is related to an individual's
ability to adapt to the uncertainty associated with climate change, in other words to climate resilience and mitigation of
that risk.
In the context of the physical scenario analyses, the factors related to temperature increase and drought proved critical
from the Company's perspective. The exposure of KGHM Polska Miedź S.A. to the factors indicated may significantly affect
the functioning of the production divisions. Among the potential consequences of changes in the factors identified on
elements of the value chain, an increased demand for utilities, interruptions in their supply, potential equipment failures
and nuisance work should be indicated.
As part of its strategic activities, the Company also recognises numerous opportunities, such as the development of new
mining and automation technologies, access to external funding sources for the energy transition, the possibility of
extending the value chain through metal recycling and increasing competitiveness by reducing indirect CO
2
emissions.
The overarching goal of the Climate Policy of KGHM Polska Miedź S.A. is for the Company to support efforts to achieve
global climate neutrality by 2050. KGHM Polska Miedź S.A.'s interim target is to reduce total Scope 1 and Scope 2 emissions
by 30% by 2030, compared to 2020 emission levels.
KGHM Polska Miedź S.A. emits around 3 million tonnes of CO
2
equivalent per year, where Scope 1 and Scope 2 emissions
account for comparable shares according to the GHG Protocol. Scope 1 emissions are direct emissions primarily related to
the Company’s production activities – in particular, emissions from metallurgical processes, emissions related to the use of
motor fuels by mining vehicles and machinery in mines, and emissions related to the generation of energy from our own
sources using natural gas. Scope 2 emissions are indirect emissions associated with the use of electricity and heat
purchased on the market. Their level depends primarily on the energy mix in the national energy system.
The main directions for reducing the carbon footprint in the area of Scope 1 direct emissions will include the use of
hydrogen technologies in production processes, the development of electromobility, the implementation of advanced
technologies within the production line, the gradual replacement of conventional energy sources by low- and zero-carbon
sources, and the use of CCS/CCU technologies for the management of the remaining CO
2
emitted in metallurgical processes.
63
The Sustainable Development Goals listed in the final document of the United Nations summit entitled “Transforming our world:
The 2030 Sustainable Development Agenda", adopted by the General Assembly on 25 September 2015.
275
Since most of the decarbonization technology is at an early advancement stage, it is assumed that by 2030 KGHM Polska
Miedź S.A. will focus its efforts primarily on the continuation or launch of research and development work in selected areas,
as well as on launching pilot projects. Full implementation of new innovative solutions, leading to achievement of the
expected decarbonization effects in the direct emissions area, will be effected in 2030-2050.
The main direction of decarbonization in the area of indirect Scope 2 emissions will be a gradual shift away from the use of
market-sourced electricity and heat to an increasing use of own energy sources. A key element in supporting the reduction
of Scope 2 emissions will be the continued improvement of energy efficiency in production units and process
improvements.
The policy implementation monitoring process is based on systematic emission reporting in accordance with the GHG
Protocol, scenario analysis and ongoing assessment of compliance with the TCFD guidelines. The policy encompasses all
activities of KGHM Polska Miedź S.A. and their impact on the climate, both within the upstream and downstream value
chain and in the geographical areas where the Company operates. This document takes into account key stakeholder
groups, including investors, local communities, employees and business partners.
Complex investment expenditures related to the realisation of activities limiting the level of greenhouse gas emissions have
been determined as part of the Decarbonisation Program of KGHM Polska Miedź S.A. The Climate Policy does not contain
any significant exclusions, but at the first stage it does not cover the full Scope 3 emissions, which it plans to address in the
future. The Climate Policy of KGHM Polska Miedź S.A. was adopted for application by a Resolution of the Management
Board
64
, while the supervision over the implementation of the resolution was entrusted to the Vice President of the
Management Board for Financial Affairs.
The Company is aware that improving ESG ratings relevant from the perspective of institutional investors and funding
institutions will require the continuation of existing measures and the implementation of new measures, including
improving the quality of reporting of climate-related information. At the same time, a well-established Climate Policy will
contribute to ongoing cooperation and dialogue with local communities and municipalities, including through dedicated
climate protection education programs.
All of the above-mentioned activities will not only benefit KGHM's environment, but will also have a significant impact on
building long-term shareholder value for the Company.
KGHM Polska Miedź S.A. makes the Climate Policy available to all interested parties via the Company’s website under the
tab Climate policy of KGHM Polska Miedź S.A. | KGHM Corporate website.
Energy Policy of KGHM Polska Miedź S.A.
Rational management of natural resources is of fundamental importance for KGHM Polska Miedź S.A. in respect to
sustainable development, satisfaction of stakeholder expectations and accountability to future generations.
The priority is to constantly increase the share of renewable energy sources and in-house production in meeting energy
demand.
The primary objective of KGHM Polska Miedź S.A. in respect to energy management, including directly related pro-climate
activity, is to engage in rational energy management while ensuring the security of energy supply to facilities and
installations within the Company's production line. This process is carried out in accordance with the best European and
global standards, mainly in accordance with ISO 50001. The implementation of this international standard of energy utility
management began with the adoption of the Energy Policy of KGHM Polska Miedź S.A. by the President of the Management
Board on 28 November 2016. The third edition of the Policy, approved on 12 July 2023, is currently in force.
KGHM Polska Miedź S.A. consistently strives to to continually increase the share of renewable energy sources and in-house
energy production in covering energy demand. The following principles are essential to the energy management policy:
− identification and monitoring of energy streams,
− reducing energy consumption and eliminating its losses,
− continuous monitoring and improvement of energy use, including energy recovery and efficient energy production.
The Company implements its energy policy in a way that ensures that the impacts, risks and opportunities associated with
energy consumption and energy transition are effectively managed. In view of the high share of energy from non-renewable
sources, measures are being taken to minimise the negative impact by increasing the share of renewable energy sources,
optimising consumption and investing in in-house generation.
The energy transition represents an opportunity for the Company to reduce costs and increase energy independence
through the development of cogeneration facilities, raising funds for pro-efficiency projects and improving the energy
64
Resolution of the Management Board of KGHM Polska Miedź S.A. no. 121/XI/2023 dated 08 March 2023 regarding the approval of the
updated “Climate Policy of KGHM Polska Miedź S.A.”
276
efficiency of technological processes. Optimising the cost of energy utilities is also an important part of the policy, which
reduces CO₂ emissions and the cost of purchasing emission allowances.
The Energy Policy does not set specific targets and the scope and time limits for targets as required by MDR-A and MDR-T.
The Energy Policy of KGHM Polska Miedź S.A. is made available to all stakeholders through the official website of the
Company.
[E1-3] Measures and resources in relation to climate policy
In November 2023, design work was commenced with the aim of developing Decarbonisation Programs for the Core
Production Business of KGHM Polska Miedź S.A., taking into account the targets for reduction of greenhouse gas emissions
specified in the Climate Policy with the outlook of 2030 and 2050.
KGHM Polska Miedź S.A., in terms of energy transformation with the outlook of 2030, assumes the construction of its own
and the acquisition of renewable energy sources, which will systematically increase the volume of renewable electricity
used in KGHM Polska Miedź S.A. in such a way as to achieve the Company's climate neutrality in 2050.
In 2024, capital expenditure is planned in the portfolio in the form of 30 projects potentially related to the implementation
of GHG emission mitigation measures. It is assumed that, due to the level of development and availability of modern
technology, the Company's main activities in the 2030 timeframe will be aimed at reducing indirect Scope 2 emissions, i.e.
emissions associated with the use of electricity
Currently, “green energy” is produced for the needs of KGHM Polska Miedź S.A. from the company's own 47MW photovoltaic
farms. Further RES installation projects that are being prepared for construction and connection to their own electricity
system are at the stage of obtaining funding, designing for the possibility of connecting energy storage to these sources
and preparing technical documentation. With such program, design and implementation assumptions, it is assumed that a
30% reduction will occur in Scope 1 and Scope 2 CO
2
emissions by 2030 with respect to 2020.
The Gas and Steam Units operating in high-efficiency cogeneration and powered by gas fuel from the Polish gas mine in
Kościan supply electricity, heat and process steam not only to the Company's needs, but also to the district heating systems
of the surrounding towns. High-efficiency gas engines installed in the Surface Climate Stations of the Rudna mine and the
Polkowice-Sieroszowice mine provide electricity and ice water used for cooling workplaces in underground mine workings.
Due to KGHM Polska Miedź S.A.'s use of the support system under the Act of 19 July 2019 on the compensation system for
energy-intensive sectors and subsectors, in order to fulfil its obligation for 2023, in 2024 the Company carried out a tender
procedure for the transfer of Guarantees of Origin of Energy from RES to KGHM. The tender provided for the acquisition
and redemption of Guarantees of Origin for the total volume of 200,000 MWh of electricity generated from renewable
energy sources. RES Energy Guarantees of Origin were purchased and redeemed by KGHM in 2024. The following significant
activities of the parent company, KGHM Polska Miedź S.A. were carried out during the reporting period:
− On 29 February 2024, shares in three special purpose vehicles with photovoltaic farm projects with the total capacity of
42 MW were acquired, consequently, taking into account previous project purchases, the Company owns 8 photovoltaic
farms with the total capacity of 47 MW located in the Dolnośląskie, Łódzkie, Pomorskie and Wielkopolskie Voivodeships.
The purchased installations generated 44 037 MWh of electricity in 2024.
− Market exploration and observations of the progress of commercialisation of small nuclear reactor module technology
worldwide were conducted. A pre-feasibility study for the construction of a nuclear power plant using SMR technology
to meet the Company's electricity needs was finalised. The analysis of the conclusions of this study is in progress.
− For the Głogów Copper Smelter and Refinery PV project (I-III, 7.5 MW), the tender preparation process for the selection
of the General Contractor and the Supervising Inspector for each of the 3 designed PV installations with the total
capacity of 7.5 MW began last year.
− For the PV Piaskownia Obora project (max. 50 MW) technical connection conditions were obtained with a capacity of 50
MW.
− Positive Decisions on Environmental Conditions were obtained for the PV Tarnówek (3 MW), PV Kalinówka (2 MW) and
PV Polkowice (3.9 MW) projects. In the case of the Cedynia Wire Rod Plant (1.5 MW), the application has been submitted
and development conditions have been obtained. Technical connection conditions have been obtained for the
Kalinówka PV project.
− For the Wartowice PV I project (88MW), which is being implemented on own land, TAURON Dystrybucja S.A. allocated
connection capacity of 88 MW as part of the technical connection conditions, based on the application submitted in
2023. The Draft Connection Agreement is subject to an intra-organisational procedure.
− For the Lubin Zachodni Mine PV project (5 MW), the Lubin Municipality has initiated a procedure to amend the local
land use plan to allow the construction of the photovoltaic farm on the site of the Mine.
− The Radwanice-Żukowice WF project (20 MW) located partly on the Company's own land near Głogów Copper Smelter
and Refinery is under consideration. A concept for power output to the Głogów Copper Smelter and Refinery was
prepared for the wind project.
− Individual local law documents (Study, Local Spatial Development Plan, General Plans) cyclically received opinions in
order to secure the possibility of implementing RES investments on KGHM's own land.
− The amount of PLN 65.4 million was spent on the above tasks.
277
In the subsequent years:
− KGHM will carry out a number of activities and tasks related to its involvement in the acquisition processes for
renewable energy sources in the Copper Basin, with the Company's involvement in the transaction process as a
business decision dependent on obtaining external financing.
− The Company plans to continue the development of investment potential on its own land with a total planned capacity
of approximately 200 MW in connection with the ongoing energy transformation of KGHM Polska Miedź S.A. The key
project planned for 2025 is the selection of construction contractors for the PV I-III project complex in Głogów Copper
Smelter and Refinery. In addition, it is planned to obtain technical connection conditions for the PV Tarnówek, PV
Polkowice and PV Cedynia Wire Rod Plant projects and to obtain a building permit decision for the following projects:
PV Tarnówek (3 MW), PV Kalinówka (2 MW), PV Polkowice (3.9 MW), PV Cedynia Wire Rod Plant (1.5 MW).
− The funds allocated for the above objectives in 2025 amount to PLN 519.6 million.
With regard to activities concerning the reduction of Scope 1 emissions, activities are carried out with the aim of ultimate
building of a carbon dioxide sequestration unit at the Głogów Copper Smelter and Refinery. A summary of activities during
the reporting period with a plan for next year is presented below.
2024 - total costs of PLN 1,247,000.00 net were incurred for the development of a feasibility study for the CCS demonstration
plant. In 2025, a net amount of PLN 455,000.00 is planned to be used for the feasibility study of a CCS installation for CO
2
transport and injection. The measures taken are expected to lead to the construction of a CCS facility at the Głogów Copper
Smelter and Refinery in the 2050 timeframe, thereby reducing Scope 1 emissions for this installation by approximately 50%.
Significant activities carried out by the Companies of the KGHM Polska Miedź S.A. Group include the following projects:
− Energetyka sp. z o.o. in Lubin is implementing a renewable energy sources (RES) project in accordance with the
investment plan. A photovoltaic system at the Głogów Copper Smelter and Refinery EC-3 plant, the electricity generated,
estimated at around 1,300 MWh/year, will be used for the plant's own needs. In the reporting year, some preparatory
work was carried out, the expenditure of approx. PLN 0.3 million was incurred, the planned expenditure in subsequent
years is approx. PLN 6 million.
− WPEC Legnica S.A. is carrying out an investment project entitled Modernisation of the heat supply system in Legnica,
involving the construction of a natural gas-fired source to replace a coal-fired boiler house. To date, 95% of the
investment has been completed. The expenditure until the total completion of the construction work is PLN 105 million.
Completion and acceptance of the investment is planned for 2025. The measurable environmental benefit is the
reduction of CO
2
emissions by approximately 50%.
[E1-4] Targets related to climate change mitigation and adaptation
The KGHM Group did not have formalised climate change mitigation targets. Due to the fact that the majority of the Group's
greenhouse gas emissions are attributable to emissions from the technological processes of KGHM Polska Miedź S.A.,
targets for these activities were developed first. Thus, the Company's Decarbonisation and Energy Transition Programs
implemented focus on drastically reducing carbon dioxide emissions from technological processes and those associated
with the consumption of energy utilities produced using fossil fuels (especially coal).
The overarching goal included in the Climate Policy of KGHM Polska Miedź S.A. is for the Company - as the Parent Entity of
the KGHM Group - to achieve climate neutrality by 2050. The intermediate goal is to reduce the total Scope 1 and Scope 2
emissions by 30% by 2030 in relation to 2020 emission levels.
65
The targets set are relative in nature and are measured in percentages (%). Targets are included as indicators in relation to
the base year or YoY and measured both in tonnes of CO
2
equivalent (t CO
2
e) and percentage value.
2020 was adopted as the base year in determining GHG reduction progress. No interim or intermediate targets have been
set for 2030. 2030 is an intermediate target for 2050.
In terms of energy management, the primary objective of KGHM Polska Miedź S.A. is to carry out rational energy
management while ensuring the broadly understood energy safety of employees, machinery, equipment and installations
of the Company's Core Business. The key elements which guarantee the rational use of energy utilities include the Energy
Policy of KGHM Polska Miedź S.A., the Decarbonisation Program of KGHM Polska Miedź S.A. and the implemented and
effectively functioning Energy Management System compliant with the PN-EN ISO 50001 standard.
65
GHG emissions are calculated in accordance with the GHG Protocol. The protocol indicates that companies select and report a base year
for which verifiable emissions data are available. The first emission calculation according to the protocol was based on data for 2020. 2020
was therefore indicated in the Climate Policy as the base year for Scope 1 and 2 GHG emissions.
278
Diagram 51. Main directions of decarbonisation
2020 was adopted as the base year in the context of tracking progress in reducing greenhouse gas emissions, with
emissions at a level of 3 019 thousand t CO
2
e (Chart 37). The plans to reduce emissions in the 2030 timeframe mainly relate
to investments in the area of RES (467 thousand t CO
2
e) and in the area of purchasing electricity from an external supplier
(517 thousand t CO
2
e). The expected reduction in greenhouse gas emissions leads to the achievement of Scope 1 direct
greenhouse gas emissions and Scope 2 indirect emissions - market-based at a level of 2038 thousand t CO
2
e in 2030. Thus,
the estimated reduction in emissions accounts for 32.5% and includes KGHM Polska Miedź S.A. At this stage, emissions
from KGHM Group Companies are not covered by climate change mitigation targets.
Chart 37. Projected emission reductions by direction - baseline option (t CO
2
e)
The annual greenhouse gas balance allows for determining emission levels for Scopes 1, 2 and 3. Any changes in emission
levels are subject to analysis and identification of their source. At the same time, actions whose implementation contributes
or can contribute to reducing greenhouse gas emissions are monitored. The analysis of all information available makes it
possible to assess the pursuit of a set level of emission reduction. Measures that, if implemented, will significantly reduce
GHG emissions per tonne of production are at a conceptual and analysis stage.
Work on the Decarbonisation Program for KGHM Polska Miedź S.A. in the long term until 2050 will continue. In parallel,
work will continue on the decarbonisation program for the KGHM Group, including setting of reduction targets and the
adoption of the KGHM Group Climate Policy.
279
[E1-5] Energy consumption and energy mix
Energy consumption and energy mix
Information on total energy consumption by the KGHM Polska Miedź S.A. Group in absolute values, recognised in MWh, is
presented in the table below. In accordance with the requirements of ESRS E1-5, the following assumptions have been
adopted for the disclosure of energy consumption information:
− The calculations were based on data used for the greenhouse gas emissions balance and the preparation of the PRTR
Reports.
− Input data was obtained from the individual Group companies.
− For the calculation of the following indicators, the structure of fuels and other primary energy carriers published by
TAURON Polska Energia S.A. (2023) was used.
− All quantitative energy figures are provided in megawatt hours (MWh), taking into account the net calorific or calorific
value.
Table 146. Energy consumption and energy mix in the KGHM Polska Miedź S.A. Group [MWh]
Energy consumption and energy mix
2024
1
Consumption of fuel from coal and coal products
15 248
2
Consumption of fuel from crude oil and petroleum products
79 375
3
Consumption of fuel from natural gas
2 496 360
4
Consumption of fuel from other fossil sources
23 649
5
Consumption of purchased or acquired electricity, steam heat and cooling from fossil sources
3 950 940
6
Total consumption of energy from fossil sources (calculated as the sum of lines 1-5)
6 565 571
Share of fossil sources in total energy consumption [%]
99,95%
7
Energy consumption from nuclear sources
0
Share of energy consumption from nuclear sources in total energy consumption [%]
0
8
Fuel consumption in the case of renewable sources, including biomass (also comprising industrial and municipal bio-
waste, biogas, renewable hydrogen, etc.)
0
9
Consumption of purchased or acquired electricity, hest, steam and cooling from renewable sources
0
10
Non-fuel self-generated renewable energy consumption
3334
11
Total consumption of renewable and low-carbon energy (calculated as the sum of lines 8-10)
3334
Share of renewable sources in total energy consumption [%]
0,05%
Total consumption of energy (calculated as the sum of lines 7 and 11)
6 568 905
Energy intensity
By calculating the energy intensity index shown in Table 145. Energy intensity based on net revenues [MWh/PLN], the total
energy consumption from activities in high climate impact sectors (expressed in MWh) was divided by net revenues from
activities in high climate impact sectors (expressed in PLN).
Sectors considered as having a significant impact on climate according to the ESRS classification include those listed in
Sections A-H and L of Regulation (EC) No 1893/2006, the so-called NACE Rev. 2 classification, also defined in Commission
Delegated Regulation (EU) 2022/1288. The KGHM Polska Miedź S.A. Group generates revenues in the following sectors:
− Section B - Mining and quarrying
− Section C - Manufacturing industry
− Section D - Electricity, gas, steam and hot water supply
− Section E - Water supply; sewerage, waste management and remediation activities
− Section G - Wholesale and retail trade; repair of motor vehicles
− Section H - Transport and storage
Table 147. Energy intensity based on net revenue [MWh/PLN million]
Energy intensity per net revenue [MWh/PLN million]
2024
The total energy consumption of activities in sectors with significant climate impacts on net revenue from
activities in sectors with significant climate impacts*
185.98
* As it is not possible to isolate energy consumption in sectors with a significant climate impact, it has been assumed that its share corresponds
proportionally to the share of revenues generated in these sectors.
280
Table 148. Quantitative reconciliation of revenue to consolidated financial statements
Specification [PLN million]
2024
Net revenues from activities in sectors with significant climate impact used to calculate energy intensity
32,527.54
Net revenue (other)
2,792.45
Total net revenue (reference to Part 2 - Business segments and revenue information - of the 2024 Consolidated
Financial Statements)
35,319.98
[E1-6] Scope 1, 2, 3 greenhouse gas emissions
In the balance of greenhouse gas emissions from the KGHM Polska Miedź S.A. Group, in accordance with the GHG Protocol
A Corporate Accounting and Reporting Standard, direct emissions of greenhouse gases listed in the Kyoto Protocol
(UNFCCC) were taken into account:
− carbon dioxide (CO
2
),
− methane (CH
4
),
− nitrous oxide (nitric oxide (I), N
2
O),
− hydrofluorocarbons (HFCs),
− perfluorocarbons (PFCs),
− sulphur hexafluoride (SF
6
),
Nitrogen trifluoride (NF
3
) emissions do not occur in the KGHM Polska Miedź S.A. Group, therefore, it was not included in
the balance. Substances excluded from the ESRS list were also included in the balance, with their emissions reported
separately from those in Scopes 1 to 3. In the case of HFC or PFC mixtures with other gases excluded from the ESRS, the
emission of each component of the mixture was considered separately.
In addition to direct emissions, indirect greenhouse gas emissions related to the generation of purchased and consumed
heat and electricity (Scope 2) and indirect emissions related to the entity's value chain (Scope 3) were also considered,
expressed as CO
2
equivalent.
All emission values are expressed in metric tonnes of CO
2
equivalent (Mg CO
2
e).
Impact of non-CO
2
emissions on the greenhouse effect is expressed by the global warming potential (GWP). This ratio
expresses the rate of the strength of the warming effect of a non-CO
2
greenhouse gas to that of carbon dioxide. In order to
normalise the impact and to enable the generalisation of emission volume, emissions of greenhouse gases other than
carbon dioxide were converted into (equivalent) CO
2
emissions by multiplying the amount of greenhouse gas emitted by
its GWP factor. The table below presents the GWP100 factor values adopted and their sources of origin.
Table 149. Values of GPW100 global warming factors for the greenhouse gases analysed
Substance
GWP100 factor
66
Greenhouse gases listed in the Kyoto Protocol
CO
2
1
N
2
O
273
CH
4
27.9
SF
6
25 200
HFC-134a (CH
2
FCF
3
)
1 530
HFC-32 (CH
2
F
2
)
771
HFC-125 (CHF
2
CF
3
)
3 740
HFC-407C (52% R-134A, 25% R-125, 23% R-32)
1 908
HFC-404A (52%R R-143A, 44% R-125, 4% R-134A, C
2
H
2
F
4
)
4 728
HFC-410A (50% R-125, 50% R-32)
2 256
HFC-152a (CH
3
CHF
2
)
21.5
66
IPCC Sixth Assessment Report (AR6) Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth
Assessment Report of the Intergovernmental Panel on Climate Change.
281
Other greenhouse gases
HCFC-22 (CHClF
2
)
1 960
Propan R-290 (C
3
H
8
)
0.02
R-600a - izobutan (C
4
H
10
)
3
67
HFO-1234yf (R-1234yf)
0.501
HCFC-124, R-124 chlorotetrafluoroetan (CHClFCF
3
)
597
Mix of HFC with other gases
R-401A (53% R22, 13% R152a, 34% R124)
Mix components
considered separately
R-401C(33% R22, 15% R152a, 52% R124)
R-452a (11% R32, 59% R125, 30% R1234yf)
Global warming factors are calculated by comparing the climate warming effects of emitting one kilogram of a given gas
over 100 years with the effects of emitting one kilogram of CO
2
. GWP values are determined based on climate change
modelling results and published in periodic reports by the IPCC (Intergovernmental Panel on Climate Change).
The balance, in accordance with the GHG Protocol guidelines, takes into account the GWP values published in the latest
IPCC report. At the time of drawing up this report, this was the sixth edition of the report. GWP values were adopted in
accordance with Chapter 7: Table 7.15 and Supplementary Material: Table 7.SM.7
68
.
For pollutants beyond the Kyoto Protocol list, in the absence of GWP factor values in the latest IPCC report, they were
derived from other sources. For HFC mixtures for which GWP factors are not specified, they are calculated as averages for
the individual components, weighted by the proportion of the component in the mixture.
The aggregate results of the balance sheet of greenhouse gas emissions from KGHM Polska Miedź S.A., and the KGHM
Group combined, are presented in the tables below.
Table 150. Scope 1, 2, 3 greenhouse gas emissions in KGHM Polska Miedź S.A. in 2024 [t CO
2
e]
Item
2020
Base year
2024
2030 target
2050 target
Annual
target
%/base year
SCOPE 1 Emissions of greenhouse gases
Gross greenhouse gas emissions
1,413,129
1,438,297
-
-
-
Percentage of emissions from regulated emission trading schemes (%)
86.2%
82.2%
-
-
-
SCOPE 2 Emissions of greenhouse gases
Gross greenhouse gas emissions
according to location-based method
1,592,368
1,415,930
-
Gross greenhouse gas emissions
according to market-based method
1,605,575
1,743,909
-
Scope 1 and 2 Greenhouse gas emissions according to location-
based method
3,005,497
2,854,227
-30.0%
Climate
neutrality
-5.0%
Scope 1 and 2 Greenhouse gas emissions according to location-
based method
3,018,705
3,182,206
-30.0%
Climate
neutrality
5.4%
SCOPE 3 Greenhouse gas emissions
Gross greenhouse gas emissions
-
1,254,909
-
1. Purchase of goods and services
-
754,828
-
2. Investment goods
-
139,896
-
3. Activities related to fuel and energy (not included in Scope 1 or 2)
-
211,634
-
4. Upstream transport and distribution
-
71,640
-
5. Waste generated within the operation
-
0
-
6. Business travel
-
651
-
7. Employees’ commuting to work
-
22,088
-
8. Leased senior assets
-
213
-
9. Downstream transport
-
53,924
-
13. Leased junior assets
-
36
-
15. Investments
-
0
-
Total greenhouse gas emissions
according to location-based method
-
4,109,137
-
Total greenhouse gas emissions
according to market-based method
-
4,437,115
-
67
Regulation (EU) No 517/2014 of the European Parliament and of the Council on fluorinated greenhouse gases and repealing Regulation
(EC) No 842/2006 (OJ (OJ L 2014, No. 150, p. 195 as amended)
68
IPCC Sixth Assessment Report (AR6) Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth
Assessment Report of the Intergovernmental Panel on Climate Change
282
The Table above presents the greenhouse gas emissions for Scopes 1, 2 and 3 for KGHM Polska Miedź S.A. The targets set
for decarbonisation apply only to the KGHM Polska Miedź S.A. Company. Therefore, the effects related to emission
reductions and resulting from the adopted decarbonisation policy, from a formal point of view, should be referred to the
actions taken by the Company. Greenhouse gas emissions from the KGHM Group are not subject to climate targets.
Comparative values were also not included in the statements due to the lack of verification of this period by an authorised
verifier.
Table 151. Scope 1, 2, 3 greenhouse gas emissions in KGHM Polska Miedź S.A. in 2024 [t CO
2
e]
Item
2020
Base year
2024
2030 target
2050 target
Annual
target
%/base year
SCOPE 1 Greenhouse gas emissions
Gross greenhouse gas emissions
2,094,485
-
-
-
Percentage of emissions from regulated emission trading schemes (%)
76.9%
-
-
-
SCOPE 2 Emissions of greenhouse gases
Gross greenhouse gas emissions
according to location-based method
1,602,852
-
Gross greenhouse gas emissions
according to market-based method
1 925 530
-
Greenhouse gas emissions, Scope 1 and 2
according to location-based method
3 697 298
-
-
-
Greenhouse gas emissions, Scope 1 and 2
according to location-based method
3 019 975
-
-
-
SCOPE 3 Emissions of greenhouse gases
Gross greenhouse gas emissions
-
3 219 629
-
1. Purchase of goods and services
-
982 495
-
2. Investment goods
-
275 825
-
3. Activities related to fuel and energy (not included in Scope 1 or 2)
-
317 217
-
4. Upstream transport and distribution
-
96 837
-
5. Waste generated within the operation
-
89 039
-
6. Business travel
-
1 213
-
7. Employees’ commuting to work
-
53 565
-
8. Leased senior assets
-
1 492
-
9. Downstream transport
-
67 819
-
13. Leased junior assets
-
2 457
-
15. Investments
-
1 331 671
-
Total greenhouse gas emissions
according to location-based method
-
6 916 926
-
Total greenhouse gas emissions
according to market-based method
-
7 239 604
-
Biogenic emissions
Identified biogenic emissions represent 1.5% of Scope 1 emissions in the KGHM Group and originate from the balance of
element C in raw materials used in the smelting processes.
Biogenic emissions in other KGHM Group companies are not identified.
Emissions designated and reported under the EU ETS are included in Scope 1 according to the EU ETS method.
Biogenic CO
2
emissions from biomass combustion or biodegradation independently of Scope 2 greenhouse gas emissions
are not identified. The emission factors used do not allow the separation of the percentage of biomass or biogenic CO
2
.
Biogenic CO
2
emissions from fuel combustion (petrol, diesel, gas) are not identified.
Biogenic CO
2
emissions from the combustion or biodegradation of biomass that occur upstream and downstream in the
value chain, independent of gross Scope 3 GHG emissions, and CO
2
emissions occurring in the life cycle of biomass other
than emissions from combustion or biodegradation (including GHG emissions from biomass processing or transport) in
the calculation of Scope 3 GHG emissions are not identified.
283
Emission intensity
The links between GHG intensity based on revenue on sales, excluding VAT, with financial reporting information are shown
in Table 7.
Table 152. Intensity of greenhouse gas emissions in the KGHM Polska Miedź S.A. Group
Net [PLN]
t CO
2
e
t CO
2
e/PLN
Total greenhouse gas emissions (according to location-
based method) per net revenue
(t CO
2
-equivalent/monetary unit)
35 319,98
6 969 006
197,311
Total greenhouse gas emissions (according to market-
based method) per net revenue
(t CO
2
-equivalent/monetary unit)
35 319,98
7 291 683
206,446
Direct emissions (Scope 1)
Methodology for determining direct emissions (Scope 1)
The KGHM Group, as part of its methodology for determining GHG emissions, has taken into account the principles,
requirements and guidelines presented in the "GHG Protocol Corporate Standard".
Carbon dioxide direct emission volumes for installations participating in the EU ETS:
− KGHM Polska Miedź S.A. Głogów Copper Smelter and Refinery
− KGHM Polska Miedź S.A. Legnica Copper Smelter and Refinery
− KGHM Polska Miedź S.A. Gas and Steam Units
− Energetyka Sp. z o.o.
− Wojewódzkie Przedsiębiorstwo Energetyki Cieplnej in Legnica
have been determined in accordance with Commission Implementing Regulation (EU) 2018/2066 of 19 December 2018 on
the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament
and of the Council and amending Commission Regulation (EU) No 601/2012 (OJ L 2018, No. 334, p. 1 as amended). The
same accounting period has been adopted for gross Scope 1 greenhouse gas emissions and gas emissions in the ETS.
The mass-balance method was used to determine process emissions - annual CO
2
emissions were determined on the basis
of the annual consumption of individual raw materials and the carbon content of the raw materials consumed. The detailed
methodology for calculating emissions is determined for each ETS installation in separate and administratively approved
“Monitoring Plans”. These documents establish a monitoring system, with specific procedure and responsibilities for
individual persons involved in the process and determine specific methodologies for calculating emissions based on the
general principle of mass balance of element C in the raw materials used. Monitoring plans are developed on the basis of
the aforementioned EU Commission Regulation 2018/2066. The above-mentioned methodology is indicated in Commission
Regulation 2023/2772 as the “EU ETS method” which can also be applied to activities in geographical areas and sectors that
are not covered by the EU ETS.
In the case of other installations belonging to KGHM and Group Companies, emissions of CO
2
and methane and nitrous
oxide accompanying the consumption of fuels (natural gas, hard coal, fuel oil, propane, LPG) were determined using the
methodology applied for the combustion of fuels, based on the quantities of fuels consumed and emission factors
published by the IPCC.
Carbon dioxide emissions from installations for which a mass balance is not used shall be calculated based on the product
of the consumption of the coal-bearing material used in the installation, its chemical energy value, and an emission factor
derived from the carbon content of the raw material, decreased by an oxidation factor reflecting the efficiency of the
combustion process,
Emissions of other greenhouse gases emitted from technological processes and from the combustion of motor fuels were
determined in a manner consistent with the requirements of the methodology for determining releases for reporting to
the National Pollutant Release and Transfer Register (KRUiTZ), in accordance with the methodology and based on indicators
published by the IPCC. The volumes of fugitive releases and emissions accompanying emergency situations have been
estimated on the basis of technological data, observing the principles of best engineering practice.
284
Indirect emissions (Scope 2)
Methodology for determining equivalent emissions for energy purchased and consumed (Scope 2)
According to the guidelines of the GHG Protocol
69
Scope 2 Guidance Scope 2 Guidance. An amendment to the GHG Protocol
Corporate Standard, greenhouse gas emissions associated with energy consumption were determined using two methods:
− a location-based method, using average emission factors for the power grid in the reporting company's area,
− market-based method, using emission factors specified by the energy supplier in its contract with the reporting
company.
Indicators of unit CO
2
emissions accompanying the generation of thermal energy, supplied by suppliers from outside the
KGHM Group, were adopted on the basis of data published on suppliers' websites or obtained directly from representatives
of energy suppliers, and in the event of their absence as an average value for all other suppliers.
Thermal energy generated at KGHM CG facilities and purchased by the facilities included in the balance is emission-free for
these facilities. Emissions from the generation of this energy have been included as Scope 1 direct emissions for their
generators to avoid double counting.
A weighted average CO
2
emission factor for a mix of purchased energy was used to determine the emissions associated
with the consumption of electricity purchased centrally by KGHM from suppliers outside the KGHM Group. The indicator
was determined based on the shares of each supplier in the total amount of energy purchased and the CO
2
emission factors
for 2023, as published on the suppliers' websites. To determine the emissions for the location-based method, the balance
of electricity produced as reported by the KOBiZE for 2023 was used
70
. The CO
2
emission factor, without taking losses into
account, is 0.5598 Mg/MWh. For the market-based method, residual mix indicators for Poland, the USA, Chile and Canada
were adopted in the absence of data on the factor.
Electricity produced by the facilities of the KGHM Group, is resold together with electricity from other sources to other
KGHM facilities. Emissions from the production of this electricity are included as direct emissions from these facilities. To
avoid double counting of emissions, this energy, consumed by KGHM Group’s installations, was treated as emission-free.
As it is not identified during the purchase, the emission-free nature of this part of the energy stream was taken into account
by lowering the emission factor for electricity resold by KGHM Group’s facilities accordingly.
The emission factors for energy purchased from individual suppliers and the weighted average factor for energy purchased
centrally by KGHM's Procurement Department are summarised in tables 154 and 155.
Table 153. CO
2
emission factors for electricity and heat purchased in 2024 for the needs of the KGHM Polska Miedź S.A.
Company
Energy supplier for KGHM and Polish companies
2024
t CO
2
e/MWh
2024
t CO
2
e/GJ
TGE S.A. - no guarantee of origin
0.7882
0.2190
TGE S.A. - with guarantees of origin
0.000
*
0.000
*
Invest PV
0.000
*
0.000
*
KGHM ZANAM S.A.
0.000
*
0.000
*
MERCUS Logistyka sp. z o.o.
0.000
*
0.000
*
MINOVA-KSANTE sp. z o.o.
0.000
*
0.000
*
Energetyka sp. z o.o.
0.000
**
0.000
**
Tauron Polska Energia
0.5081
0.1411
KGHM Head Office mix (market-based)
0.6683
0.1856
* renewable energy, zero emission
** carbon-free energy for the KGHM Polska Miedź S.A. Group, as included in Scope 1 for „Energetyka” sp. z o.o.
69
Greenhouse Gas Protocol – global standard for measuring and managing greenhouse gases emissions. Emissions are divided into 3 Scopes:
Scope 1, Scope 2, Scope 3.
70
Emission indicators CO
2
, SO
2
, NO
x
, CO and total dust for electricity, KOBIZE, December 2024
285
Table 154. CO
2
emission factors for electricity and heat purchased in 2024 by KGHM Polska Miedź S.A. And the domestic
companies
Energy supplier for KGHM and Polish companies
2024
t CO
2
e/MWh
2024
t CO
2
e/GJ
Enea S.A.
0,6896
0,1916
PGE
0,6343
0,1762
PGE Obrót
0,5484
0,1523
PGE Energetyka Kolejowa
0,5310
0,1475
PGNiG Termika S.A.
-
0,1142
Tauron Sprzedaż
0,4874
0,1354
Tauron Sprzedaż GZE Sp. z o.o.
0,4969
0,1380
Tauron Dystrybucja S.A. = Sales
0,4874
0,1354
Energa S.A. Orlen Group
0,3652
0,1014
WPEC w Legnicy S.A.
0,000***
0,000***
MPEC "Termal" S.A. Lubin
0,000**
0,000**
ECO Jelenia Góra sp. z o.o.
-
0,10443
Fortum Power and Heat Wrocław
-
0,11206
PGNiG S.A.
-
0,0934
Fortum Marketing and Sales Polska S.A.
0,4034
0,1121
Respect Energy S.A.
0,000*
0,000*
Electricity according to the residua mix
0,7882
-
KOBIZE indicator
0,5598
0,1555
* renewable energy, zero emission
** carbon-free energy for the KGHM Group, as included in Scope 1 for „Energetyka” sp. z o.o.
*** carbon-free energy for the KGHM Group, as included in Scope 1 for WPEC Legnica
Table 4 shows the CO
2
emission factors from purchased electricity as reported by International companies. International
companies do not use thermal energy purchased from external suppliers.
Table 155. CO
2
emission indicators for electricity purchased in 2024 by international companies
Name
Source of indicator
indicator
t CO
2
/MWh
AJAX
BC Grid Electricity GHG Emission Intensity Factors
0,0990
DMC Canada
Canada grid 2023 i 2024, prov. Ontario
0,0300
Victoria
Canada grid 2023 i 2024, prov. Ontario
0,0300
Sudbury Ops
Canada grid 2023 i 2024, prov. Ontario
0,0300
Carlota
US eGrid 2023, NWPP region
0,3372
DMC USA
-
-
Robinson
US eGrid 2023, NWPP region
0,2881
DMC Chile
Residual mix. Carbon Footprint Ltd's Greenhouse Gas Emissions Factors for
International Grid Electricity
0,4577
KGHM Chile
Residual mix. Carbon Footprint Ltd's Greenhouse Gas Emissions Factors for
International Grid Electricity
0,4577
Sierra Gorda S.C.M.
Per data from Sierra Gorda S.C.M.
0,0000
Location-based indicator Canada
Carbon Footprint Ltd's Greenhouse Gas Emissions Factors for International Grid
Electricity
0,1160
Location-based indicator USA
eGRID indicator for the USA in 2023
0,3519
Location-based indicator Chile
Factor de emisión del Sistema eléctrico Nacional 2023 (SEN)
0,2421
Scope 3 emissions
Emission determination methodology
Due to the extensive range of input data (tens of thousands of items of purchased goods - category 1), as well as the large
number of suppliers (several thousand), the acquisition of primary data from suppliers and value chain participants is not
possible in a foreseeable, timely manner. Moreover, most suppliers do not keep GHG balances, so it is impossible to ensure
the quality of primary data or to verify the sources of this data. Under such circumstances, in order to ensure the best
possible quality of the data and the emission values determined, secondary data on GHG emission factors for the supply
chain were applied from recognised international sources such as:
286
− UK Government Department for Environment Food and Rural Affairs (DEFRA) - DEFRA Supply Chain data.
− US Environmental Protection Agency (US AEPA) - EPA Supply Chain data,
− Centre for Global Environmental Research of the Japan National Institute of Environmental Studies - 3EID data
(Embodied Energy and Emission Intensity Data for Japan Using Input-Output Tables).
Emission data specific to the material, service or process was used, covering extraction and acquisition, production and
processing, and associated transport.
Data on activities comes from the SAP IT system of KGHM and from the accounting systems of the KGHM Polska Miedź S.A.
Group companies.
Table 156. Methodology and principles for determining Scope 3 greenhouse gas emissions under the GHG Protocol for
the KGHM Group
71
SCOPE 3 -
UPSTREAM
1. Purchased raw materials and services (emissions related to the extraction and production of raw materials
and services)
2. Capital goods (emissions related to the production of capital goods)
3. Energy and fuel-related emissions not included in Scope 1 and 2
4. Transport and distribution (transport and distribution of products purchased by the reporting company
during the reporting period between the supplier and the reporting company by vehicles or equipment not
owned or controlled by the reporting company (Upstream)
5. Waste generated by operations (transport, disposal and treatment)
6. Business travel (business-related transport of employees during the reporting period by vehicles that are not
owned or managed by the reporting company)
7. Employees’ commuting (transportation of employees between their homes and their workplaces during the
reporting year by vehicles not owned or operated by the reporting company)
8. Leased assets other than covered by Scope 1 and 2 - Upstream
SCOPE 3 -
DOWNSTREAM
9. Transport and distribution - downstream
10. Processing of products sold
11. Use of products sold
12. End-of-life treatment of products sold
13. Leased assets not included in Scope 1 and 2 - downstream
14. Franchise
15. Investments excluded from Scope 1 or 2
Note: In grey - category excluded from the balance of categories
Table 157. Justification for exclusion from the Scope 3 emission category balance.
Category
Justification
10
11
12
KGHM is a producer of basic materials with many applications, which are components of many other products. Due to
the nature of these products and multiple variants of use, processing and end-of-life treatment, it is impossible to make
correct assumptions about the associated emissions (KGHM products do not generate emissions associated with their
use). They are therefore considered insignificant based on the criteria established by the Greenhouse Gas Protocol
Standard.
KGHM products, due to their high value and ease of recycling, do not constitute waste material and mostly, as a
secondary raw material, are returned to production, creating circular economy.
14
The franchise category for output streams does not apply to companies of KGHM Polska Miedź S.A.
Goods and services purchased
This category comprises the extraction, production and associated transport of all raw materials, inputs, auxiliary materials
and services purchased during the year. This is the main stream of Scope 3 emissions.
Individual purchase items were aggregated into approximately 100 categories, depending on their purpose or the material
used. Due to a lack of information on weight data for the majority of materials purchased, GHG emissions were determined
from their gross financial value expressed in PLN and the emission factors associated with extraction, production and
transport (Supply Chain) converted into PLN. Original indicators: USA EPA in kgCO
2
e/USD, UK DEFRA in kgCO
2
e/GBP and
JAPAN 3EID in kgCO
2
e/JPY were converted to PLN at the average NBP exchange rate on the last day of the balance sheet
year. The calculations take into account inflation in the countries of the currencies in which the indicators are expressed,
from the year in which they are in force to the end of the year in which the calculation is made.
)
287
Also included in services purchased are downstream transport services, in addition to the transport of products of KGHM
Polska Miedź S.A. and transport and management services for waste generated by the divisions of KGHM and companies
of the KGHM Group.
The indicators used to calculate the emissions for purchased goods and services, as well as their origin and year of origin,
are shown in Table 159.
Emissions from purchased goods and services for the Gas and Steam Units in Głogów and Polkowice were included in the
emissions from this category for the company „Energetyka” sp. z o.o., which operates the aforementioned units on behalf
of KGHM PM S.A.
Table 158. Emissions indicators for 2024 related to purchased goods
Material
Year
Emission
factor
kgCO
2
e/PLN
Type
source:
72
1. Accumulators and batteries
Batteries
2022
0.010
EPA Supply Chain
Accumulators
2022
0.072
EPA Supply Chain
2. Chemicals
Inorganic chemicals
2019
0.215
Defra Supply Chain
Organic chemicals
2019
0.168
Defra Supply Chain
Technical gases
2022
0.268
EPA Supply Chain
Other basic inorganic chemicals
2022
0.224
EPA Supply Chain
Adhesives
2022
0.115
EPA Supply Chain
Toilet preparations
2022
0.031
EPA Supply Chain
Other chemical products - average
-
0.115
Other
products
Calculation
Technical alcohols, organic chemicals
-
0.218
Average,
organic
Calculation
Paints and varnishes
-
0.070
Average,
paints
Calculation
Technical gases
-
0.218
Average
Calculation
Industrial cleaning agents
-
0.184
Medium
Calculation
Cleaners, laundry detergents
-
0.052
Average
Calculation
Rubber and plastic hoses and conveyor belts
2022
0.065
EPA Supply Chain
Tyres
2022
0.054
EPA Supply Chain
Rubber products
-
0.088
Average
Calculation
Plastic and artificial resins
2019
0.171
Defra Supply Chain
Plastic packaging mats, films and sheets
2022
0.120
EPA Supply Chain
Plastic pipes, joints and fittings
2022
0.076
EPA Supply Chain
Laminated plastic plates, sheets and profiles
2022
0.102
EPA Supply Chain
Plastic bottles
2022
0.127
EPA Supply Chain
Other plastic products
2022
0.079
EPA Supply Chain
Plastic products
-
0.122
Average
Calculation
Carbon and graphite products
2022
0.080
EPA Supply Chain
3. Building materials
-
0.219
Average
Calculation
Cement adhesives, mortars
-
1.074
Cement
Calculation
Cement
2022
0.886
Production
EPA Supply Chain
Clay and fire resistant products
2022
0.092
Production
EPA Supply Chain
Lime and plaster
2022
0.359
Production
EPA Supply Chain
Miscellaneous non-metallic mineral products
2022
0.165
Production
EPA Supply Chain
Articles of concrete and stone, machined
2021
0.161
Defra Supply Chain
Concrete products, average
-
0.061
Average
Calculation
Abrasives
2022
0.031
Production
EPA Supply Chain
Ready-mixed concrete
2022
0.125
Production
EPA Supply Chain
4. Metal products
Production of iron, steel and alloys in smelters
2022
0.177
EPA Supply Chain
Finished steel products
2022
0.079
EPA Supply Chain
Ferrous metal foundries
2022
0.080
EPA Supply Chain
Structural steel plates and products
2018
0.070
EPA Supply Chain
Heating vessels and heat exchangers
2022
0.042
EPA Supply Chain
)
288
Material
Year
Emission
factor
kgCO
2
e/PLN
Type
source:
72
Heavy metal tanks
2022
0.061
EPA Supply Chain
Springs and wires
2022
0.050
EPA Supply Chain
Mechanical workshops
2021
0.060
EPA Supply Chain
Screws, nuts, bolts
2022
0.051
EPA Supply Chain
Water fittings, mixers, heads
2018
0.050
EPA Supply Chain
Other valves and fittings
2022
0.034
EPA Supply Chain
Balls and bearings
2022
0.042
EPA Supply Chain
Pipes and fittings
2022
0.049
EPA Supply Chain
Other metal products
2022
0.057
EPA Supply Chain
Metal parts, average
-
0.054
Average
Calculation
5. Non-ferrous metal products
Mining of metal ores, average
-
0.127
Average
Calculation
Non-ferrous metals, melting and refining
2022
0.093
EPA Supply Chain
Non-ferrous metals, processing
2022
0.095
EPA Supply Chain
Copper concentrate
2023
0.107
KGHM, GHC balance
6. Heating, ventilation, air-conditioning equipment, pumps, compressors and others
Heating equipment
2022
0.032
EPA Supply Chain
Boilers and heat exchangers
2022
0.042
EPA Supply Chain
Air conditioning, cooling and hot air blowers
2022
0.036
EPA Supply Chain
Electrical equipment
2021
0.072
Defra Supply Chain
Fans and air purifiers
2022
0.042
EPA Supply Chain
Compressors
2022
0.037
EPA Supply Chain
Pumps and pumping equipment
2022
0.042
EPA Supply Chain
Hydraulic equipment, average
-
0.040
Average
Calculation
7. Ceramic and glass products
Miscellaneous non-metallic mineral products
2022
0.165
EPA Supply Chain
Ceramic goods
2019
0.092
Defra Supply Chain
Glass, average
-
0.161
Average
Calculation
8. Paper products
Cardboard containers (cardboard boxes)
2022
0.103
EPA Supply Chain
Stationery
2022
0.061
EPA Supply Chain
Toilet paper
2022
0.063
EPA Supply Chain
9. Office supplies
Office supplies except paper
2022
0.047
EPA Supply Chain
Office furniture, joinery and timber from the sawmill,
2022
0.042
EPA Supply Chain
Furniture, average
-
0.064
Average
Calculation
Other miscellaneous office equipment, e.g. roller blinds, shutters
-
0.086
Average
Calculation
10. Wood products
All other wood products
2022
0.031
EPA Supply Chain
Wood and wood products except furniture
2021
0.089
Defra Supply Chain
Wooden elements, average
-
0.057
Average
Calculation
11. Electronic and electrical products
Other electronic components
2022
0.019
EPA Supply Chain
Office machinery and computers
2021
0.073
Defra Supply Chain
Computers, electronic and optical products
2021
0.066
Defra Supply Chain
Computers and peripherals, average
-
0.036
Average
Calculation
Other electronic devices, average
-
0.043
Average
Calculation
Light bulbs and parts
2022
0.023
EPA Supply Chain
Lighting fittings
2022
0.032
EPA Supply Chain
Transformers
2022
0.027
EPA Supply Chain
Engines and generators
2022
0.041
EPA Supply Chain
Switchgear, switchboards, etc. switches, regulators
2022
0.035
EPA Supply Chain
Other miscellaneous electrical equipment
2022
0.025
EPA Supply Chain
Cables and wires
2022
0.050
EPA Supply Chain
Electrical equipment
2021
0.072
Defra Supply Chain
Electrical components
-
0.046
Average
Calculation
Electrical components: relays and switches
-
0.033
Average
Calculation
12. Measurement instruments
Analytical instruments, testing machines, measuring instruments.
2005
0.082
Japan 3EID
289
Material
Year
Emission
factor
kgCO
2
e/PLN
Type
source:
72
Electrical measurement instruments
2005
0.090
Japan 3EID
13. Petroleum products
Petroleum derivative products
2022
0.057
EPA Supply Chain
Crude oil, natural gas
2021
0.241
Defra Supply Chain
Refined petroleum and other fuels (oils, non-CE gases)
2021
0.170
Defra Supply Chain
Petroleum products in addition to others mentioned
2021
0.111
Defra Supply Chain
Petroleum derivative products
-
0.105
Average
Calculation
14. Machinery and vehicles
Garden machinery and equipment
2022
0.044
EPA Supply Chain
Construction machinery
2022
0.046
EPA Supply Chain
Mining and oil and gas related machinery
2022
0.041
EPA Supply Chain
Transport machinery
2022
0.036
EPA Supply Chain
Metalworking machinery
2005
0.145
Japan 3EID
Other commercial and industrial machinery
2022
0.040
EPA Supply Chain
Petrol vehicle engines and parts
2022
0.053
EPA Supply Chain
Electrical vehicle engines and parts
2022
0.044
EPA Supply Chain
Vehicle control, suspension and braking systems
2022
0.058
EPA Supply Chain
Powertrain and drive line components
2022
0.052
EPA Supply Chain
Gearboxes, drives and transmissions
2022
0.038
EPA Supply Chain
Other engine equipment
2022
0.056
EPA Supply Chain
Conveyors
2005
0.151
Japan 3EID
Machines, average
-
0.064
Average
Calculation
15. Vehicles
Cars
2021
0.055
EPA Supply Chain
Small trucks and commercial vehicles
2022
0.056
EPA Supply Chain
Heavy goods vehicles
2022
0.060
EPA Supply Chain
16. Tools
Energy-driven tools
2022
0.019
EPA Supply Chain
Metalworking tools
2005
0.120
Japan 3EID
17. OHS
0.055
Average
Textiles
2022
0.045
EPA Supply Chain
Plastic footwear
2005
0.089
Japan 3EID
Leather products, imitations and footwear, average
-
0.049
Average
Calculation
Surgical (medical) supplies
2022
0.022
EPA Supply Chain
Surgical and medical instruments
2022
0.027
EPA Supply Chain
Plastic products
-
0.122
Average
Calculation
Rubber products
-
0.088
Average
Calculation
Pharmaceuticals
-
0.040
Average
Calculation
18. Solid fuels
Coal and lignite, peat
2021
0.262
Defra Supply Chain
Coke
2021
0.305
Defra Supply Chain
Carbon products
2005
0.723
Japan 3EID
19. Other products
Foodstuffs and beverages
2021
0.119
Defra Supply Chain
Vegetable and animal oils and fats
2021
0.157
Defra Supply Chain
Gifts, average
-
0.079
Average
Calculation
Flowers and plants,
2005
0.184
Japan 3EID
Soil, road covering materials
2005
0.112
Hardening
Japan 3EID
Other non-metallic minerals, mining and quarrying
2022
0.042
EPA Supply Chain
290
Table 159. Emissions factors for 2024 related to purchased services
Service
Year
Emission
factor
kgCO
2
e/PLN
Type
source:
73
1. Postal services, average
0.0317
Average
Calculation
Postal and courier services
2021
0.0430
Defra Supply Chain
Postal services
2022
0.0170
EPA Supply Chain
Postal services
2000
0.0350
Japan 3EID
2. Repair and maintenance of machinery and installations
0.0615
Average
Calculation
Repair and maintenance of machinery
2022
0.0312
EPA Supply Chain
Other repairs and installations
2020
0.0338
Defra Supply Chain
Repair of machinery
2005
0.1071
Japan 3EID
Repair of structures
2005
0.1247
Japan 3EID
Miscellaneous other repair services
2005
0.0738
Japan 3EID
3. Repair and maintenance of electrical and electronic equipment
0.0190
Average
Calculation
Repair and maintenance of equipment
2022
0.0179
EPA Supply Chain
Repair of computers/personal, household goods
2021
0.0203
Defra Supply Chain
Other computer services and management
2022
0.0189
EPA Supply Chain
4. Repair and maintenance services, transport
0.0537
Average
Calculation
Repair and maintenance of personal transport equipment
2020
0.0329
Defra Supply Chain
Other personal transport equipment services
2020
0.0549
Defra Supply Chain
Sale, hire and repair of motor vehicles
2021
0.0489
Defra Supply Chain
Repair and maintenance in automotive industry
2022
0.0236
EPA Supply Chain
Repair of motor vehicles
2005
0.0887
Japan 3EID
5. Telecommunications services
0.0276
Average
Calculation
Radio and TV broadcasting, production of telecommunications
equipment, WiFi
2022
0.0151
EPA Supply Chain
Telecommunications services
2020
0.0287
Defra Supply Chain
Telephone and telefax services
2020
0.0245
Defra Supply Chain
Cable telecommunications
2005
0.0386
Japan 3EID
Mobile telecommunications
2005
0.0281
Japan 3EID
6. IT services
0.0198
Average
Calculation
Programming/computer consultancy and related services
2021
0.0253
Defra Supply Chain
Programming services
2022
0.0189
EPA Supply Chain
Information systems services
2022
0.0151
EPA Supply Chain
Data processing, hosting and related services
2022
0.0217
EPA Supply Chain
7. Printing services
0.0679
Average
Calculation
Printing, form making and binding
2005
0.1063
Japan 3EID
Publishing
2005
0.0667
Japan 3EID
Printing and recording
2021
0.0709
Defra Supply Chain
Printing
2022
0.0463
EPA Supply Chain
Printing services
2022
0.0491
EPA Supply Chain
8. Security services for property and persons
0.0178
Average
Calculation
Property protection and detective services
2021
0.0186
Defra Supply Chain
Property protection and detective services
2022
0.0170
EPA Supply Chain
9. Refurbishment and construction services
0.0509
Average
Calculation
Other housing maintenance and repair services
2020
0.0118
Defra Supply Chain
Buildings and construction work
2021
0.0532
Defra Supply Chain
Structural and engineering design work
2021
0.0582
Defra Supply Chain
Maintenance and repair of non-residential buildings
2018
0.0802
EPA Supply Chain
10. Municipal services
0.3287
Average
Calculation
Waste management services
2000
0.4227
Japan 3EID
Waste: collection, treatment, recovery, disposal
2021
0.2346
Average
Defra Supply Chain
2021 + EPA Supply
Chain 2018
Water and effluents management services
2021
0.0667
Defra Supply Chain
12. Cleaning
0.0355
Average
Calculation
Building maintenance services
2005
0.0281
Japan 3EID
Services for buildings and dwellings
2022
0.0491
EPA Supply Chain
Other ancillary services
2022
0.0293
EPA Supply Chain
13. Vehicle transport services
0.1870
Average
Calculation
73
source: US EPA, UK DEFRA, JAPAN 3EID emission factors, op. cit. p. 234
291
Service
Year
Emission
factor
kgCO
2
e/PLN
Type
source:
73
Other transport services
2020
0.1392
Defra Supply Chain
Freight road transport
2005
0.1317
Japan 3EID
Truck transport
2021
0.2901
EPA Supply Chain
14. Advertising and media services
0.0283
Average
Calculation
Film, video, TV programmes, sound and music recording
2021
0.0219
Defra Supply Chain
Programming and broadcasting TV, radio
2021
0.0329
Defra Supply Chain
Advertising and market research
2021
0.0203
Defra Supply Chain
Programming and broadcasting TV, radio
2022
0.0151
EPA Supply Chain
Advertising, PR and related services
2022
0.0198
EPA Supply Chain
Photo services
2022
0.0283
EPA Supply Chain
Internet publishing and related services
2022
0.0151
EPA Supply Chain
Film and video production
2000
0.0386
Japan 3EID
Advertising services
2005
0.0624
Japan 3EID
Film and video production
-
0.0303
Average
Calculation
Programming and broadcasting TV, radio
-
0.0240
Average
Calculation
15. Catering services
0.0460
Average
Calculation
Food and beverage service
2021
0.0515
Defra Supply Chain
Gastronomy and refreshments
2022
0.0302
EPA Supply Chain
Places for eating and drinking for pleasure
2000
0.0467
Japan 3EID
General places of eating and drinking
2000
0.0556
Japan 3EID
16. Medical services
0.0523
Average
Calculation
Medical and paramedical services
2020
0.0616
Defra Supply Chain
Home medical services
2022
0.0236
EPA Supply Chain
Other outpatient medical services
2022
0.0415
EPA Supply Chain
Medical services
2005
0.0624
Japan 3EID
Non-profit medical services
2005
0.0624
Japan 3EID
Public medical services
2005
0.0624
Japan 3EID
17. Air transport
0.2671
Average
Calculation
Air transport
2021
0.2456
Defra Supply Chain
Air transport
2022
0.1482
EPA Supply Chain
Air transport
2005
0.4075
Japan 3EID
18. Research and development services
0.0371
Average
Calculation
Research and development services
2021
0.0363
Defra Supply Chain
Other professional, technical and scientific services
2021
0.0321
Defra Supply Chain
Research and development services
2022
0.0359
EPA Supply Chain
Other miscellaneous professional, technical and scientific services
2022
0.0189
EPA Supply Chain
Medical services
2005
0.0624
Japan 3EID
19. Consulting services
0.0159
Average
Calculation
Accounting, bookkeeping, auditing and tax services
2021
0.0228
Defra Supply Chain
Environmental protection and other technical services
2022
0.0208
EPA Supply Chain
Legal services
2022
0.0094
EPA Supply Chain
Accounting, bookkeeping, auditing and tax services
2022
0.0123
EPA Supply Chain
Legal, financial and accounting services
2005
0.0211
Japan 3EID
20. Processing
0.1230
Average
Calculation
Manufactured metal products
2021
0.0945
Defra Supply Chain
Coating, engraving, heat treatment. and related activity
2022
0.0850
EPA Supply Chain
Rolling, casting, alloying of copper
2022
0.1010
EPA Supply Chain
Rolling, casting, alloying of other metals (except copper and aluminium)
2022
0.1010
EPA Supply Chain
Rolling of copper and its alloys
2005
0.2038
Japan 3EID
Rolling of copper and its alloys
-
0.1524
Average
Calculation
21. Mining support services
0.1639
Average
Calculation
Drilling of oil and gas wells
2022
0.0935
EPA Supply Chain
Other ancillary services in mining
2022
0.0859
EPA Supply Chain
Ancillary services in mining
2021
0.3122
Defra Supply Chain
22. Postal services, average
0.0456
Calculation
292
Investment goods
This category includes the production of fixed assets: plant, facilities and equipment.
GHG emissions were calculated analogously to purchased goods, using the emission factors associated with the extraction,
production and transport of purchased goods. Emissions from capital goods for the Gas and Steam Units in Głogów and
Polkowice were included in the emissions from this category for the company „Energetyka” sp. z o.o. , which operates the
aforementioned units on behalf of KGHM PM S.A.
Activities related to the use of fuels and energy not included in Scopes 1 or 2 of the balance
This category includes extraction, production and its transport, as well as losses in the transport and distribution of fuels
and energy, not included in Scopes 1 and 2 of the balance. GHG emissions for fuel-related activities calculated from
emission factors of the British Government's Department for Environment Food and Rural Affairs (DEFRA): Government
Greenhouse Gas Conversion Factors for Company Reporting, October 2024, expressed in kg CO
2
e per unit of fuel. Emissions
related to transmission losses of externally purchased energy have been calculated from purchased energy data and
assumed loss rates and emission factors for purchased energy as for Scope 2 emissions .
Transport and distribution of input streams
This category covers the transport of purchased goods, capital goods and fuel to the KGHM Polska Miedź S.A. Group’s
entities.
Due to the significant number of types of goods transported and the multiplicity of suppliers, transport data from suppliers,
such as the amount of fuel consumed and distance, could not be obtained. Obtaining data on the mass of the goods
transported, the type of vehicle used and the distance of transport from the KGHM database is also not possible due to the
lack of such source data in the record-keeping system in use. Accordingly, the emissions associated with transporting the
input streams were calculated from supply chain-related indicators developed by the US Environmental Protection Agency
(EPA Supply Chain) expressed in kgCO
2
e/USD and then converted to PLN taking into account exchange rates and the
inflation rate. The EPA provides emission factors for goods
74
:
− excluding emissions from the manufacturer's gate to the point of sale (Supply Chain EF without Margins),
− emission factors for goods from the manufacturer's gate to the point of sale (Margins of Supply Chain EF), which are
related to the transport of these goods.
Based on the ratio between these two values, transport emission factors were determined from the indicators for
purchased goods. For the indicators provided by UK DEFRA and JAPAN 3EID, the emission factors for the transport of goods
were adopted based on the ratios determined for the EPA indicators.
Table 160. Emission factors for 2024 from transport of purchased services
Material
Year
Emission
factor
kgCO
2
e/PLN
Type
source:
75
1. Accumulators and batteries
Batteries
2022
0.0006
EPA Supply Chain
Accumulators
2022
0.0035
EPA Supply Chain
2. Chemicals
Inorganic chemicals
2019
0.0003
Defra Supply Chain
Organic chemicals
2019
0.0024
Defra Supply Chain
Technical gases
2022
0.0011
EPA Supply Chain
Other basic inorganic chemicals
2022
0.0003
EPA Supply Chain
Adhesives
2022
0.0119
EPA Supply Chain
Toilet preparations
2022
0.0109
EPA Supply Chain
Other chemical products - average
-
0.0044
Other
products
Calculation
Technical alcohols, organic chemicals
-
0.0031
Average,
organic
Calculation
Paints and varnishes
-
0.0144
Average,
paints
Calculation
Technical gases
-
0.0007
Average
Calculation
Industrial cleaning agents
-
0.0033
Average
Calculation
Cleaners, laundry detergents
-
0.0136
Average
Calculation
Rubber and plastic hoses and conveyor belts
2022
0.0013
EPA Supply Chain
74
"Balance of greenhouse gases emissions..."
75
source: US EPA, UK DEFRA, JAPAN 3EID emission factors, op. cit. p. 234
293
Material
Year
Emission
factor
kgCO
2
e/PLN
Type
source:
75
Tyres
2022
0.0023
EPA Supply Chain
Rubber products
-
0.0284
Average
Calculation
Plastic and artificial resins
2019
0.0011
Defra Supply Chain
Plastic packaging mats, films and sheets
2022
0.0089
EPA Supply Chain
Plastic pipes, joints and fittings
2022
0.00045
EPA Supply Chain
Laminated plastic plates, sheets and profiles
2022
0.0085
EPA Supply Chain
Plastic bottles
2022
0.0222
EPA Supply Chain
Other plastic products
2022
0.0150
EPA Supply Chain
Plastic products
-
0.0174
Average
Calculation
Carbon and graphite products
2022
0.0128
EPA Supply Chain
3. Building materials
0.0164
Average
Calculation
Cement adhesives, mortars
-
0.0124
Cement
Calculation
Cement
2022
0.0068
Production
EPA Supply Chain
Clay and fire resistant products
2022
0.0095
Production
EPA Supply Chain
Lime and plaster
2022
0.0055
Production
EPA Supply Chain
Miscellaneous non-metallic mineral products
2022
0.0115
Production
EPA Supply Chain
Articles of concrete and stone, machined
2021
0.0313
Defra Supply Chain
Concrete products, average
-
0.0086
Average
Calculation
Abrasives
2022
0.0049
Production
EPA Supply Chain
Ready-mixed concrete
2022
0.0068
Production
EPA Supply Chain
4. Metal products
Production of iron, steel and alloys in smelters
2022
0.0097
EPA Supply Chain
Finished steel products
2022
0.0000
EPA Supply Chain
Ferrous metal foundries
2022
0.0172
EPA Supply Chain
Structural steel plates and products
2018
0.0101
EPA Supply Chain
Heating vessels and heat exchangers
2022
0.0326
EPA Supply Chain
Heavy metal tanks
2022
0.0045
EPA Supply Chain
Springs and wires
2022
0.0511
EPA Supply Chain
Mechanical workshops
2021
0.0061
EPA Supply Chain
Screws, nuts, bolts
2022
0.0135
EPA Supply Chain
Water fittings, mixers, heads
2018
0.0068
EPA Supply Chain
Other valves and fittings
2022
0.0083
EPA Supply Chain
Balls and bearings
2022
0.0159
EPA Supply Chain
Pipes and fittings
2022
0.0094
EPA Supply Chain
Other metal products
2022
0.0075
EPA Supply Chain
Metal parts, average
-
0.0149
Average
Calculation
5. Non-ferrous metal products
Mining of metal ores, average
-
0.0053
Average
Calculation
Non-ferrous metals, melting and refining
2022
0.0034
EPA Supply Chain
Non-ferrous metals, processing
2022
0.0137
EPA Supply Chain
Copper concentrate
2023
0.0108
KGHM, GHC
balance
6. Heating, ventilation, air-conditioning equipment, pumps, compressors and others
Heating equipment
2022
0.0022
EPA Supply Chain
Boilers and heat exchangers
2022
0.0326
EPA Supply Chain
Air conditioning, cooling and hot air blowers
2022
0.0010
EPA Supply Chain
Electrical equipment
2021
0.0103
Defra Supply Chain
Fans and air purifiers
2022
0.0030
EPA Supply Chain
Compressors
2022
0.0045
EPA Supply Chain
Pumps and pumping equipment
2022
0.0039
EPA Supply Chain
Hydraulic equipment, average
-
0.0037
Average
Calculation
7. Ceramic and glass products
Miscellaneous non-metallic mineral products
2022
0.0115
EPA Supply Chain
Ceramic goods
2019
0.0095
Defra Supply Chain
Glass, average
-
0.0056
Average
Calculation
8. Paper products
Cardboard containers (cardboard boxes)
2022
0.0029
EPA Supply Chain
Stationery
2022
0.0038
EPA Supply Chain
Toilet paper
2022
0.0050
EPA Supply Chain
9. Office supplies
294
Material
Year
Emission
factor
kgCO
2
e/PLN
Type
source:
75
Office supplies except paper
2022
0.0045
EPA Supply Chain
Office furniture, joinery and timber from the sawmill,
2022
0.0036
EPA Supply Chain
Furniture, average
-
0.0038
Average
Calculation
Other miscellaneous office equipment, e.g. roller blinds, shutters
-
0.0091
Average
Calculation
10. Wood products
All other wood products
2022
0.0019
EPA Supply Chain
Wood and wood products except furniture
2021
0.0102
Defra Supply Chain
Wooden elements, average
-
0.0064
Average
Calculation
11. Electronic and electrical products
Other electronic components
2022
0.0026
EPA Supply Chain
Office machinery and computers
2021
0.0142
Defra Supply Chain
Computers, electronic and optical products
2021
0.0128
Defra Supply Chain
Computers and peripherals, average
-
0.0075
Average
Calculation
Other electronic devices, average
-
0.0071
Average
Calculation
Light bulbs and parts
2022
0.0026
EPA Supply Chain
Lighting fittings
2022
0.0034
EPA Supply Chain
Transformers
2022
0.0035
EPA Supply Chain
Engines and generators
2022
0.0041
EPA Supply Chain
Switchgear, switchboards, etc. switches, regulators
2022
0.0020
EPA Supply Chain
Other miscellaneous electrical equipment
2022
0.0036
EPA Supply Chain
Cables and wires
2022
0.0034
EPA Supply Chain
Electrical equipment
2021
0.0031
Defra Supply Chain
Electrical components
-
0.0052
Average
Calculation
Electrical components: relays and switches
-
0.0029
Average
Calculation
12. Measurement instruments
Analytical instruments, testing machines, measuring instruments.
2005
0.0105
Japan 3EID
Electrical measurement instruments
2005
0.0078
Japan 3EID
13. Petroleum products
Petroleum derivative products
2022
0.0006
EPA Supply Chain
Crude oil, natural gas
2021
0.00078
Defra Supply Chain
Refined petroleum and other fuels (oils, non-CE gases)
2021
0.0005
Defra Supply Chain
Petroleum products in addition to others mentioned
2021
0.0011
Defra Supply Chain
Petroleum derivative products
-
0.0009
Average
Calculation
14. Machinery and vehicles
Garden machinery and equipment
2022
0.0102
EPA Supply Chain
Construction machinery
2022
0.0020
EPA Supply Chain
Mining and oil and gas related machinery
2022
0.0035
EPA Supply Chain
Transport machinery
2022
0.0037
EPA Supply Chain
Metalworking machinery
2005
0.0163
Japan 3EID
Other commercial and industrial machinery
2022
0.0025
EPA Supply Chain
Petrol vehicle engines and parts
2022
0.0054
EPA Supply Chain
Electrical vehicle engines and parts
2022
0.0019
EPA Supply Chain
Vehicle control, suspension and braking systems
2022
0.0069
EPA Supply Chain
Powertrain and drive line components
2022
0.0036
EPA Supply Chain
Gearboxes, drives and transmissions
2022
0.0065
EPA Supply Chain
Other engine equipment
2022
0.0270
EPA Supply Chain
Conveyors
2005
0.0153
Japan 3EID
Machines, average
-
0.0063
Average
Calculation
15. Vehicles
Cars
2021
0.0107
EPA Supply Chain
Small trucks and commercial vehicles
2022
0.0054
EPA Supply Chain
Heavy goods vehicles
2022
0.0025
EPA Supply Chain
16. Tools
Energy-driven tools
2022
0.00094
EPA Supply Chain
Metalworking tools
2005
0.0059
Japan 3EID
17. OHS
0.0089
Average
Textiles
2022
0.0053
EPA Supply Chain
Plastic footwear
2005
0.0104
Japan 3EID
Leather products, imitations and footwear, average
-
0.0107
Average
Calculation
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Material
Year
Emission
factor
kgCO
2
e/PLN
Type
source:
75
Surgical (medical) supplies
2022
0.0045
EPA Supply Chain
Surgical and medical instruments
2022
0.0019
EPA Supply Chain
Plastic products
-
0.0174
Average
Calculation
Rubber products
-
0.0284
Average
Calculation
Pharmaceuticals
-
0.0004
Average
Calculation
18. Solid fuels
Coal and lignite, peat
2021
0.0305
Defra Supply Chain
Coke
2021
0.0356
Defra Supply Chain
Carbon products
2005
0.0843
Japan 3EID
19. Other products
Foodstuffs and beverages
2021
0.0114
Defra Supply Chain
Vegetable and animal oils and fats
2021
0.0150
Defra Supply Chain
Gifts, average
-
0.0103
Average
Calculation
Flowers and plants,
2005
0.0239
Japan 3EID
Soil, road covering materials
2005
0.0078
Hardening
Japan 3EID
Other non-metallic minerals, mining and quarrying
2022
0.0050
EPA Supply Chain
Waste generated – treatment and processing
The category includes the treatment and processing of waste generated during the company's operations.
GHG emissions for the treatment and disposal of waste generated in the production processes of the Group, KGHM Polska
Miedź S.A. carried out outside the balance sheet boundaries were determined from waste volumes and Department of
Environment Food and Rural Affairs (DEFRA) UK Government emission factors: Government Greenhouse Gas Conversion
Factors for Company Reporting, October 2024, expressed in kg CO
2
e/Mg of waste. In the absence of an emission factor for
a particular management mode, the factor for the process most relevant to the one under consideration was adopted. The
method of management has been provided by Group entities. Sewage-related emissions have been included in the
purchased services category as a sewage collection service. Emissions from intra-Group waste management have been
included in Scope 1 and 2 of the Group entities.
Emissions associated with the transport of waste for treatment and disposal, carried out by means of transport outside the
Group's control, have been included as emissions associated with the transport of purchased transport services .
Business travel
This category includes domestic and international business travel by air, rail, bus and passenger vehicles.
Based on the departure point and destination, the distances of individual trips were determined, using online tools in the
absence of information from Group entities on distances travelled: Google Maps, Airmiles Calculator, Route scanner.
Emissions were calculated from the Department for Environment Food and Rural Affairs (DEFRA) UK Government's business
travel emission factors: Government Greenhouse Gas Conversion Factors for Company Reporting, October 2024, expressed
in kg CO
2
e per km/1 passenger for individual means of transport presented in table 162
Table 161. GHG emission factors for business trips according to DEFRA
Means of transport
2024
kg CO
2
e/km/passenger
Local bus average
0.10846
Long-distance coach
0.02717
National railway
0.03546
Domestic aircraft, medium passenger
0.16098
Medium-distance aircraft, medium passenger
0.13199
International aircraft, medium passenger
0.10377
Passenger cars, average
0.18400
76
76
Source: data base on website of Polish Statistical Office GUS https://stat.gov.pl. „Transport – activities in 2023”, 30 September 2024
296
Employees’ commuting to and from work
Employees in KGHM Polska Miedź S.A. commute to work both by public transport organised by the employer and by their
own transport. Organised transport is provided by the Mercus company, which is part of the KGHM Group. Therefore, GHG
emissions from organised transport are included in the GHG balance as Scope 1 emissions of Mercus and, to avoid double
counting, were not included in the employee commuting category.
Employees in companies of the KGHM Polska Miedź S.A. Group commute mainly by their own transport, as well as by
collective transport organised by the employer. Collective transport is included in Scope 1 of the GHG balance for KGHM
Polska Miedź S.A. as fuel consumption.
In Scope 3 of the GHG balance for the KGHM Polska Miedź S.A. Group, only employees' own transport is therefore included
in the category of employee commuting to work.
The distances covered by workers' commuting using their own transport means were determined on the basis of the
distance of workers' residences from the workplace and the number of workers using their own transport, using online
tools in the absence of information from Group entities on distances travelled: Emissions were determined from the
emission factors and fuel consumption presented in the report of the European Environment Agency “EMEP/EEA air
pollutant emission inventory guidebook 2019”
77
(updated 2020, no change in 2021). The age and type of vehicles for
organised and own employee transport was determined based on the latest Statistics Poland data for 2018-2019. The
average indicator for the passenger vehicle category was set at 0.18347kgCO
2
e/km.
In the case of significant distances of residences from the place of employment, commuting to and from work at least once
a week was conservatively assumed on a case-by-case basis and knowledge gained from the units' human resources
departments.
A conservative assumption was assumed that own commuting takes place only by personal cars with the highest GHG
emission per person.
Leased assets other than covered by Scope 1 and 2 - Upstream
Emissions related to rent are generated through the consumption of heat and electricity for rented facilities such as
buildings, halls, premises, etc. Emissions associated with other rented assets such as machinery, vehicles etc. have been
included in Scope 1 as fuel consumed or in Scope 2 as electricity consumed.
Based on the data provided by the Group entities, the structure of the leases was analysed. Facilities rented to each other
within the Group were eliminated from the calculation.
GHG emissions from the rental of assets were calculated from the area of the rented facilities and the consumption of heat
and electricity for these facilities, which was estimated on the basis of the function of the rented facility and the Regulation
of the Minister of Infrastructure of 12 April 2002 on the technical conditions to be met by buildings and their location
(consolidated text, Journal of Laws of 2022, item 1225, as amended), which sets out the maximum energy requirements for
different types of facilities.
The same emission factors for heat and electricity consumed were used as in Scope 2.
Transport and distribution of output streams
The transport of Group products to the customer is carried out using various modes of transport (road, rail, sea, air).
The transport of products from Group companies is carried out using both road and rail transport. This category does not
apply to all domestic companies that do not produce products in the traditional sense or only to a negligible extent and
that result in services or products in electronic form or in a form that does not require transport or in a form that does not
require expenditure on transport. Only transport by means of customer transport, outside the Group's control and not
contracted as a service by the Group already included in other aspects of the balance sheet, was considered.
Greenhouse gas emissions from product transport were determined on the basis of the company's own data: quantity of
products transported, number of transports, weight per transport and distance to destination, and type of transport. In the
absence of information from individuals on transport distances, they were determined using online tools: Google Maps,
Airmiles Calculator, Route scanner.
Emission factors from the UK Government's Department for Environment Food and Rural Affairs (DEFRA) as described in
the publication Government Greenhouse Gas Conversion Factors for Company Reporting, October 2024, expressed in kg
CO
2
e per tonne of cargo transported and per kilometer of transport route (kg CO
2
e/t/km), were used to determine the
emissions. The emission factors are shown in Table 162.
77
Report of the European Environmental Agency „EMEP/EEA air pollutant emission inventory guidebook 2023”
297
Table 162. GHG emission factors for transport of materials according to DEFRA
Means of transport
2024
kg CO
2
e/Mg/km
Truck transport, ON
0.05789
Railway, cargo train
0.02779
Container ships, average
0.01612
Leased assets not included in Scope 1 and 2 - downstream
GHG emissions were determined in the same way as for upstream asset lease .
Investments excluded from Scope 1 or 2
Neither KGHM Polska Miedź S.A. nor any of the Group’s companies have investments that could be included in this category.
Only issues from the Chilean company, Sierra Gorda S.C.M., controlled by KGHM Polska Miedź S.A. in 55%, are included in
this category and therefore cannot be considered, as in the case of the other companies, in Scopes 1 and 2 and categories
1÷14 of Scope 3.
Emissions from the company in this category include all GHG emissions from all aspects of the company's operations that
fall under Scopes 1, 2 and 3, calculated in accordance with the methodology for a 100% Group-controlled subsidiary, with
emissions values multiplied by the company's ownership percentage of 55%.
[E1-7] Greenhouse gas elimination and mitigation projects financed through carbon credits
No installations that significantly reduce greenhouse gas emissions have been launched in the KGHM Polska Miedź S.A.
Group.
[E1-8] Internal carbon pricing
In the KGHM Polska Miedź S.A. Group, no internal fee for greenhouse gas emission has been determined.
[E1-9] Expected financial effects resulting from material physical and transition risks and potential climate-related
opportunities
In accordance with ESRS 1 - Appendix C, the KGHM Polska Miedź S.A. Group omits the information set out in E1-9 in the
first year of Sustainability Reporting.
4.2.3 [E2] Pollution
[E2-1] Policies related to pollution
In 2024, the KGHM Group did not have a formalised policy related to pollution in place. Pollution issues, on the other hand,
are included in the Environmental Policy of KGHM Polska Miedź S.A., whose activities have the highest environmental impact
in the KGHM Group. Work on the adoption of the KGHM Group's environmental policy will begin in 2025.
The Environmental Policy of KGHM Polska Miedź S.A. is a guiding document outlining the Company's general obligations
regarding the prevention and limitation of the negative impact of the Company's activities on the environment. The
Environmental Policy of KGHM Polska Miedź S.A. was adopted for application by a Resolution of the Management Board
78
,
while the supervision over the implementation of the resolution was entrusted to the Vice President of the Management
Board (Production).
The company has defined potential environmental impacts and risks resulting from its operations. Negative actual impacts
include: emission of dust and gases into the air, exceeding the permissible values of nitrite nitrogen in water discharges
and the use/production of hazardous substances. Potential impacts include: soil contamination resulting from failures,
discharge of industrial wastewater from the hydrotechnical management of mine and technological waters from the
Żelazny Most Tailings Storage Facility and from the circulation of technological waters, discharge of treated metallurgical
wastewater, lack of possibility of further waste storage and damage to the protective layers of landfills and potential
environmental pollution with hazardous substances. Among the risks, the company has defined the risk related to failure
to meet air quality standards (including arsenic) and the risk of exceeding the permissible values of nitrite nitrogen in water
discharges.
78
Resolution of the Management Board of KGHM Polska Miedź S.A No. 342/XI/2023 dated 12 July 2023 on the adoption and introduction of
the second edition of the „Climate Policy of KGHM Polska Miedź S.A.”
298
The main assumptions indicated in the policy related to the subject of pollution and the measures that the Company is
taking in relation to the commitments set out in the policy are presented in the table below.
Table 163. Key assumptions of environmental policy and actions taken in the scope of commitments.
Main assumptions
Activities undertaken
Reducing emissions
We use best available technologies (BAT) to reduce emissions, improve air and water quality. We monitor
emissions on a regular basis and conduct corrective measures when irregularities are detected. We carry out
air quality monitoring of water and soils.
Compliance with
regulations and standards
We comply with applicable regulations concerning the protection of water resources at the national, regional
and local level. We implement international provisions on water conservation whenever this applies to the
operations of the company.
Public participation and
transparency
We cooperate with local communities and non-governmental organisations to understand their concerns and
incorporate their views into the decision-making process. We ensure transparency of the company's activities
related to water resources, provide information on water consumption, emitted pollutants.
Failure prevention and
crisis management
We have plans in place for emergency situations aimed at mitigating the effects of potential incidents related
to pollutants. We train employees on how to deal with failures, as well as cooperate with local emergency
services.
Management of chemical
substances
We take measures to reduce the potential negative effects of chemicals and prevent environmental pollution
from hazardous substances. Moreover, we manage chemicals in accordance with the EU REACH and CLP
regulations.
Innovation in the scope of
environmental protection
We invest in research and development of technologies aimed at optimising the mitigation of the adverse
environmental impact.
Sustainable socio-
economic development
We support the local economy and communities through job creation, investment and cooperation with local
communities.
Review and improvement
We conduct periodic reviews of the company's pollution policy in order to adapt to new legal, technological
and social requirements. We implement the latest solutions in monitoring systems for the purpose of
implementing goals related to pollution.
The pollution management policy is based primarily on legal requirements, best practice in this field, and takes into account
the specific nature of our industry and local conditions and requirements.
[E2-2] Actions and resources related to pollution
The process of extracting valuable raw materials from beneath the earth to the surface and their subsequent processing
will never be completely environmentally neutral. Mining, smelting and ancillary activities to production processes in the
Group are associated with significant environmental impacts through emissions. The Company systematically works to limit
the impact of the technologies it uses on the environment as much as possible and adapts them to changing environmental
requirements, including EU recommendations such as the BAT (Best Available Technologies) Conclusions.
The environmental impact of industry is best characterised by the level of concentrations of individual pollutants in ambient
air in the areas of activity.
The KGHM Polska Miedź S.A. Group conducts ongoing monitoring of its own sites and activities in order to determine the
impact of these activities on the environment. Direct measurements in the environment exposed to the impact of KGHM's
installations comprise atmospheric air quality monitoring, groundwater monitoring, surface water monitoring and soil
monitoring. The monitoring carried out since the 1980s provides a picture of KGHM's impact on the environment and, at
the same time, knowledge of the environmental effects achieved as a result of the pro-environmental initiatives and
investment activities carried out over many years.
Impact monitoring is carried out directly by the branches on the basis of emission measurements carried out according to
the applicable standards and methodologies, as indicated in the administrative decisions in force. The association of
emissions monitoring with ambient air measurements allows the analysis of measurement results from selected pollutants
relevant to environmental impacts. The approach adopted makes it possible to assess the actual impacts in terms of
significant pollutants released.
The KGHM Polska Miedź S.A. Group, being aware of its impact on the environment through its mining and processing
operations, introduces technological solutions and undertakes environmental protection initiatives. One of the major
initiatives carried out by the KGHM Company in the area of environmental protection with particular emphasis on air
protection was the BATAs program.
Significant projects carried out in KGHM Group’s Companies include the implementation of the project by WPEC Legnica
S.A. related to Modernisation of the heat supply system in Legnica, involving the construction of a natural gas-fired source
to replace a coal-fired boiler house. To date, 95% of the investment has been completed. The expenditure until the total
299
completion of the construction work is PLN 105 million. Completion and acceptance of the investment is planned for 2025.
The measurable environmental benefit is the reduction of SO
2
and dust emissions.
Air pollution
BATAs program
In June 2016, the European Commission issued an executive decision establishing BAT conclusions (guidelines) for the non-
ferrous metals industry. To address this need, the Company launched the BAT-As Program (“Program to adapt the
technological installations of KGHM Polska Miedź S.A. to the requirements of BAT Conclusions for the non-ferrous metals
industry and to restrict emissions of arsenic”). Under the Program, the construction of new installations and modernization
of existing ones was commenced in KGHM Polska Miedź S.A.’s metallurgical plants. The Program was launched in 2017 and
its implementation was completed in 2023. In the Głogów Copper Smelter and Refinery and in the Legnica Copper Smelter
and Refinery, the above-mentioned program is implemented by building new and adapting the existing technological
installations. The goal of the Program was to reduce dust and gas emissions, including arsenic compounds, through the
installation of modern filters and further sealing of technological processes.
The implementation of the BATAs Program enabled successive decrease of air emission of arsenic from metallurgical
production by KGHM Polska Miedź S.A. We have achieved the first environmental effects in the form of decreasing
atmospheric arsenic concentrations in the areas where arsenic concentrations in the air are highest, i.e. around the
smelting divisions in Legnica and Głogów. It is worth noting that an analysis of air quality, based on results obtained from
several measuring stations operating within the framework of the State Environmental Monitoring, indicates a general
reduction in the level of average annual concentrations of arsenic in the Dolnośląskie Voivodeship
79
.
Investments aimed at protection of ambient air
In 2024, systematic upgrades to existing installations as well as new investments to reduce air emissions were continued.
The key activities included:
− Modernisation of the wet electrostatic precipitators of the Sulphuric Acid Plant at Legnica Copper Smelter and Refinery
− Replacement of the wet electrostatic precipitator of the Sulphuric Acid Plant at Legnica Copper Smelter and Refinery
− Modernisation of the extraction installation for anode rotary furnaces at Legnica Copper Smelter and Refinery
− Modernisation of the sulphuric acid production facility at the Głogów Copper Smelter and Refinery
− Modernisation of ventilation in the hall of the Lead Division at Głogów Copper Smelter and Refinery
− Extension of the copper concentrate warehouse at the Feedstock Preparation Plant at Głogów Copper Smelter and
Refinery
− Extension of the water sprinkler/spraying network with the construction of a pumping station in the Tailings Division
The Company, following the completion of the BATAs program in 2023, is not taking any significant ambient air protection
activities. Emphasis has now been placed on maintaining the operating parameters of all installations at the required level
set out in administrative decisions. In particular, environmental effects are monitored to assess the environmental effects
of the investments implemented.
Water pollution
Discharges into the Odra River of water from the hydrotechnical management of mine-technological water from
the Żelazny Most Tailings Storage Facility and from technological water circulation
Discharge of mine-process wastewater/water from the operations of KGHM Polska Miedź S.A. is carried out in accordance
with the applicable laws and regulations and the provisions of the water law permit, taking into account the hydrological
conditions of the Odra River. The water permit of 21 June 2024 with the symbol V.RUZ.4210.55.2024.ID allows the discharge
of excess of these waters at flows greater than 25.5 m3/s. The discharges of the filtrate water are continuously monitored
and carried out in accordance with the permit and in such a way as not to violate the environmental quality standards set
for the JCWP (Odra from Barycz to Bóbr with the code RW6000121599). A derogation for the maximum permissible specific
electrolytic conductivity (PEW) value at 20°C at a level of 2740 µS/cm has been set for this water body. The retention and
dosing system operating at KGHM Polska Miedź S.A. Enables full control and oversight of the discharge of water into the
Odra River. Consequently, at low water levels in the receiving water body, we can suspend the discharge of wastewater. In
addition, the condition of regulating the load of salt contained in the discharged effluent to prevent exceeding 1000 mg/l
of the sum of chlorides and sulphates in the river waters after mixing with the effluent, is strictly observed. The provisions
300
of the water permit structured in this way protect the river ecosystem from degradation. Nevertheless, in previous years
we have investigated various solutions to reduce our impact on the receiver. To the best of our knowledge, currently
available solutions such as mine water desalination generate costs that are disproportionate to the environmental benefits,
in addition to being energy-intensive and generating waste problems (no possibility of storage), which in effect disqualify
such solutions from an integrated environmental approach.
Exceeded nitrite nitrogen limit values from the Żelazny Most Tailings Storage Facility
The limit specified in the water permit for nitrite nitrogen is ≤1 mg/dm3. Occasional exceedance of this parameter is
determined by a number of factors over which we have limited influence. The main nitrogen load in process waters comes
from blasting operations carried out in the mines of KGHM Polska Miedź S.A. Nitrogen is one of the components of
explosives. After mining to the surface, the ore is sent to the Concentrators, where flotation processes leach nitrogen into
process water, which, together with flotation waste, is sent to the Żelazny Most Tailings Storage Facility. Hence, incidental
elevated concentrations of nitrite nitrogen in discharge waters. We constantly monitor concentrations of nitrite nitrogen
and other forms of nitrogen. The total nitrogen content of 14-22 mg.dm3 in the waters discharged into the Odra river are
so low that it is unreasonable to initiate any nitrogen treatment of these waters. The estimated costs incurred for the clean-
up are disproportionate to the assumed environmental effects.
Discharge of treated metallurgical effluent
The water used in the production processes of Legnica Copper Smelter and Refinery, Głogów Copper Smelter and Refinery
and entities operating on the premises or near the smelters is sent to the company "Energetyka" sp. z o.o. for treatment.
Industrial effluents treatment plants operating to meet the needs of the smelters specialise in the removal of heavy metals,
including arsenic, mercury and cadmium compounds, which are especially problematic.
The wastewater treatment technology relies mainly on neutralisation processes supported by coagulants and flocculants.
Because of the high quality of effluents, approximately 30% of the global stream is reused for production processes in the
technological processes of the smelters. The remaining treated effluent is discharged to the Odra river (in the case of the
Głogów Copper Smelter and Refinery) and to the Pawłówka stream, which feeds the Kaczawa river (in the case of the Legnica
Copper Smelter and Refinery).
Soil contamination
Production installations in the KGHM Group may cause emissions of pollutants to the ground surface (soil, ground and
groundwater), mainly in the area of their location, in a direct and indirect manner. Sources of potential direct emissions
may include events related to technological processes (mainly within installations requiring an integrated permit), collection
and discharge of waste water, use of substances and raw materials (including hazardous substances), storage and disposal
of waste (in own internal and external landfills), etc. On the other hand, the source of indirect (secondary) pollution is the
fallout on the ground surface of dust emitted from installations into the ambient air (atmospheric deposition).
In order to minimise the impact on soil, ground and groundwater, the KGHM Group applies a number of measures to limit
the negative impact on these environmental components. These include:
− storage of raw materials and solid products on paved storage yards or in designated warehouses;
− storage of liquid raw materials and products in tanks protected against uncontrolled leakage and made of materials
resistant to the substances they contain;
− raw materials and products are transported by rail and road; loading and unloading points are equipped with protective
trays to catch and effectively neutralise any potential spills;
− production processes are carried out in accordance with technological instructions, which are part of Integrated
Management Systems;
− sealed road and yard surfaces from which rainwater and snowmelt are treated in settling tanks and oil separators;
− use of separate, sealed sewerage systems to selectively capture wastewater streams requiring separate treatment
technologies; the use of sealed concrete sewage tanks;
− landfill sites are separated from the environment by a deliberately designed system of barriers and seals; the cells are
equipped with leachate collection systems;
− storage of waste in designated areas on an impermeable surface; depending on the condition and composition of the
waste in bulk or in sealed containers/containers/plastic bags; hazardous waste must be collected under a roof that
eliminates the effects of the weather conditions.
Historical pollution
In 2016, KGHM Polska Miedź S.A. reported historical contamination of the ground surface in areas belonging to the Głogów
Copper Smelter and Refinery, Legnica Copper Smelter and Refinery, Lubin mine, Polkowice-Sieroszowice mine and Rudna
mine. The presence of land contamination was established based on the results of soil quality tests carried out in 2015. In
accordance with the legislation, remediation plan projects were prepared for the areas where historical contamination was
found and approved by the Regional Director of Environmental Protection. Remediation of the ground surface
301
contamination has been postponed until the installation is no longer in operation, due to the absence of a significant risk
to human health or the state of the environment.
Historic land surface pollution is defined as such pollution that occurred or resulted from activities that ceased before 30
April 2007 (Article 3(5a) of the Environmental Protection Law).
Restoration
Once the facilities are closed, the area is rehabilitated to restore the usable and natural value of the areas that were
previously exploited. The rehabilitation of brownfield sites comprises a range of activities aimed at restoring soil properties,
restoring biodiversity, and improving aesthetic and socio-economic conditions. We always ensure that the areas occupied
by the smelters and mines can be restored once the operation is closed. Closure and restoration plans are prepared in
accordance with applicable law for each operational site to be closed.
In accordance with the law, restoration funds have been set up for mining sites, landfills and tailings storage facilities where
money has been accumulated to fulfil the obligations related to closure, restoration and supervision, including monitoring.
Potentially hazardous substances and substances of very high concern
The KGHM Group is aware that responsible management of chemicals in the company requires comprehensive and
systematic management of chemical safety risks, including environmental, health and safety practices at the plant level,
with a focus on hazard identification, employee involvement and occupational health.
The Group takes measures to reduce the potential negative effects of chemicals and to prevent environmental pollution by
substances of potential concern and substances of particular concern.
Internal documents in the form of orders, instructions and procedures have been implemented in the Group, which provide
information on the safe use and handling of hazardous substances in terms of their appropriate storage, transport and
emergency response. The documents concerned aim to:
− raise awareness of the risks posed by hazardous substances in the workplace by providing reliable information on these
risks,
− raise awareness of reducing the risks posed by these substances,
− promote a culture of safety at work and risk prevention.
All substances and mixtures produced and used in the KGHM Group that meet the criteria for classification as hazardous
have safety data sheets. The safety data sheet enables the user to take the necessary measures relating to the protection
of human health and safety in the workplace and the protection of the environment. It informs the user of the hazards of
the substance or mixture and includes information on the safe storage, handling and disposal of the substance or mixture.
The KGHM Group is aware that compliance with legal regulations and following their changes is the only way to ensure safe
working conditions with chemicals. All national companies introducing and importing substances have completed the
relevant registrations with the European Chemicals Agency.
In accordance with the requirements of the Seveso III Directive, the provisions of the Environmental Protection Law and the
criteria set out in the regulation of the Minister of Development of 29 January 2016 on the types and quantities of hazardous
substances present in an establishment, determining its classification as an establishment with an increased or high risk of
a major industrial accident, the Głogów Copper Smelter and Refinery, the Legnica Copper Smelter and Refinery and the
area of the Concentrators in Rudna and Polkowice, “Energetyka” sp. z o. o. in Lubin, W-4 Division in Legnica, Nitroerg in
Bierun and Krupski Młyn were included in the group of establishments with a high risk of a major industrial accident.
Accordingly, the legally required documents have been prepared for the aforementioned entities: Plant Notifications,
Emergency Prevention Programs, Safety Reports and Internal Emergency-Rescue Plans.
The Major Industrial Accident Prevention Program (PZA) contains an analysis of the hazards present at the site and indicates
methods and measures to limit the effects of the accident and to protect people and the environment. The PZA also includes
information on the restoration of the environment to its pre-accident state and the potential for cross-border impacts of
the effects of industrial accidents identified for the site.
The Safety Report (RoB) contains an assessment of the hazards and risks of an industrial accident including fire, explosion
or emission hazards. These hazards, due to the hazardous materials used, are part and parcel of the technology used in
the plant. It is therefore important both to recognise the risks involved and to be able to assess them and then ensure
safety for people, the environment, installations and facilities. The RoB is a document indicating the options for safety
302
assessment, the situations posing potential major-accident hazards, the extent and consequences of the occurrence of
individual representative accidental events and indications of methods to counteract the hazards.
The internal emergency plan (WPOR) contains information on the measures to be taken at the plant to prevent an accident
and takes into account the knock-on effects in determining mitigation actions.
The above-mentioned documents are regularly reviewed and updated in accordance with legal requirements.
[E2-3] Targets related to pollution
No measurable pollution targets have been set in the KGHM Group. The most important environmental goal for KGHM
Polska Miedź S.A., but also for the other companies of the Group, is to continuously reduce emissions into the air and water,
which is achieved by improving purification techniques, further containment of processes and reduction of fugitive
emissions. Reaching emission levels that meet BAT requirements and national regulations in recent years, means that each
new investment project requires an in-depth analysis of the cost-effectiveness of the investment in terms of the
environmental effect that can be achieved.
A characteristic element of the current legal regime, in addition to the need to comply with the requirements of the BAT
conclusions is setting of permissible conditions for the discharge of pollutants into ambient air. These conditions are
verified using a uniform methodology based on mathematical modelling of the impact of the installation based on the
results of the measurements carried out. It is therefore a very demanding system for the monitoring and oversight of the
volume of pollutants discharged into the air, while at the same time taking into account, apart from the BAT requirements,
the location of the installation, the environmental conditions in the area and the impact of atmospheric conditions on the
levels of air concentrations in the area of the installation in question.
KGHM has met its recent targets for emissions to air, water and soil, which it was obliged to achieve as a result of the
changing regulatory environment (BAT regulations), by adapting its installations to the requirements of the BAT
Conclusions. Other Group companies performed in a similar way. These were mandatory targets that were met. It is worth
highlighting the fact that in the national legal system, emissions that meet the levels defined in the BAT conclusions are
subject to an additional impact assessment
80
. At present, no further targets have been planned, but the effectiveness of
the measures taken to date on the impact on ambient air status is being monitored. Monitoring is conducted by making
periodic measurements of emissions and monitoring the state of the ambient air at locations where impacts are significant.
[E2-4] Pollution of air, water and soil
European Pollutant Release and Transfer Register (E-PRTR)
The list of installations operated by KGHM Polska Miedź S.A. that are subject to the reporting obligation is shown below.
The majority of the installations operated by KGHM Polska Miedź S.A. exceed the capacity thresholds or volumes that
require reporting of releases and transfers of pollutants. Table 165 provides a list of installations operated by domestic
companies belonging to the KGHM Polska Miedź S.A. Group, subject to the obligation to report releases and transfers.
The international companies of the KGHM Group are not subject to the reporting obligations of Regulation (EC) No.
166/2006. Nevertheless, the emissions reported to the competent local authorities have been analysed for exceeding the
capacity thresholds or the volumes required to report releases and transfers of pollutants under Regulation (EC) No
166/2006.
Table 164. List of installations operated by KGHM Polska Miedź S.A. Divisions that are subject to the obligation of
reporting discharges and transfers to the KRUiTZ
Ite
m
Installation
Type of activity
PRTR / IPPC
(IED) code
1
Copper production installation operated by the Legnica Copper Smelter
and Refinery
Installations for the production of
non-ferrous metals from ore,
concentrates or secondary raw
materials using metallurgical,
chemical or electrolytic processes,
regardless of their capacity
2.(e) / 2.5a
2
Copper production installation operated by the Głogów I Copper
Smelter and Refinery
3
Copper production installation operated by the Głogów II Copper
Smelter and Refinery
4
Lead production installation, Głogów Copper Smelter and Refinery
5
Precious metal production installation, Głogów Copper Smelter and
Refinery
6
Lead refining installation operated by the Legnica Copper Smelter and
Refinery
Installations for smelting, including
melting, of non-ferrous metals with a
melting capacity of 4 Mg/day for lead
2.(e) / 2.5b
7
The CONTIROD wire rod production facility operated by
303
Ite
m
Installation
Type of activity
PRTR / IPPC
(IED) code
the Cedynia Wire Rod Plant
and cadmium or 20 Mg/day for other
metals
8
UPCAST wire rod production plant, Cedynia Wire Rod Plant
9
"Rudna" mine, operated by the "Rudna" mine division
Underground mining and related
activities
2.(e) /
----
10
The Polkowice-Sieroszowice mine, operated by the Polkowice-
Sieroszowice Mine Division
11
Lubin mine, operated by the Lubin Mine Division
12
Ore enrichment plant, Rudna district operated by the Ore Enrichment
Plant Division
13
Ore enrichment plant, Polkowice district operated by the Ore
Enrichment Plant Division
14
Ore enrichment plant, Lubin district operated by the Ore Enrichment
Plant Division
15
OBORA Sandpit operated by the Tailings Division
Open-pit mining and quarrying, where
the area of land covered by actual
mining operations is 25 hectares
3(b) /
---
16
Sulphuric Acid Waste Neutralisation Facility in Polkowice operated by
the Concentrators Division
Installations for the recovery or
disposal of hazardous waste with a
capacity exceeding 10 Mg/day
5.(a) /
5.1
17
SON Hazardous Waste Landfill operated by Legnica Copper Smelter
and Refinery
Landfills receiving more than 10
Mg/day or with a total capacity of
more than 25 000 Mg, excluding
landfills closed before 16 July 2001 or
for which the period of subsequent
protection has expired
5.(d) /
5.4
18
POLOWICE landfill Legnica Copper Smelter and Refinery
19
BIECHÓW Industrial Waste Landfill operated by Głogów Copper Smelter
and Refinery
20
BIECHÓW II Industrial Waste Landfill operated by Głogów Copper
Smelter and Refinery
21
BIECHÓW III Industrial Waste Landfill operated by Głogów Copper
Smelter and Refinery
22
Sedimentation pond, chamber IV, Głogów Copper Smelter and Refinery
Items: 17-22 - air emissions are not determined.
Table 165. List of installations operated by domestic Companies belonging to the KGHM Polska Miedź S.A. Group, subject
to the obligation to report discharges and transfers to the KRUiTZ
Ite
m
Installation/plant
Type of activity
PRTR / IPPC
(IED) code
1
Wojewódzkie Przedsiębiorstwo Energetyki Cieplnej w Legnicy S.A., Central Heat
Plant in Legnica
Combined heat and power
plants and other fuel
combustion installations
1.(c)
2
Energetyka Sp. z o.o.
Combined heat and power
plants and other fuel
combustion installations
1.(c)
3
NITROERG S.A., Bieruń Plant - Manufacture of explosives
Installations for the
industrial-scale production of
explosives and products
4.(f)
4
NITROERG S.A., Krupski Młyn Plant - Manufacture of explosives
Chemical installations for the
industrial-scale production of
basic organic compounds
4.(a)
Installations for the recovery
or disposal of hazardous
waste
5.(a)
5
Walcownia Metali Nieżelaznych "ŁABĘDY" S.A. - manufacture of other non-
ferrous metals
Installation for the
production of non-ferrous
metals from ore,
concentrates or secondary
raw materials by
metallurgical, chemical or
electrolytic processes; for the
smelting, including the
alloying, of non-ferrous
metals, including recovered
products (refining, casting,
etc.)
2.(e)
6
KGHM ZANAM S.A. Foundry Division - Steel Foundry
Ferrous metal foundries
2.(d)
7
KGHM Metraco S.A. Zakład Hydrometalurgii Głogów – production of other
inorganic basic chemicals
Chemical installations for the
industrial-scale production of
basic inorganic compounds
4. (b)
Note: The table shows all installations belonging to Group companies that report to the KRUiTZ. Only three installations exceed the reporting
thresholds for air emissions.
304
Air pollution
The listed pollutants are disclosed in the balance (Table 109) according to the European Pollutant Release and Transfer
Register. The scope of the information relates to pollutants whose emitted quantities exceed the disclosure thresholds set
out in the PRTR. References apply to installations where these thresholds have been exceeded.
Metals
Sources of metal emissions into the air are the copper ores mined by the Mines belonging to the Company.
Emissions of metals into the air occur throughout the process chain from ore mining through the production
of copper concentrates to electrolytic copper production. The discharge is mainly determined on the basis of
periodic emission measurements. In the case of the Company’s mining divisions, due to too low concentrations
in the discharged ventilation air, the releases of some of the emitted substances cannot be reliably determined
on the basis of direct emission measurements. This is the case, among other things, for metals contained in
trace amounts in emitted ore dust. The quantities of metals released in the dust produced by diesel
combustion in machinery engines are negligibly small.
Metal releases from the exhaust shafts were estimated on the basis of measured emissions of copper - a
substance characteristic of copper ore - and the average annual composition of the ore processed or
concentrate produced from it. The ratio of the metal content under consideration to the copper content of the
emitted dust (the so-called content profile) and the processed copper ore (or concentrate) was assumed to be
the same. On the basis of the known composition of the copper ore or concentrate (if the element content in
the ore was not determined), so-called profile factors are determined, which are the quotient of the element
under consideration and the copper content in the ore/concentrate. The release of the metal under
consideration is determined as the product of the profile factor and the measured copper emission. The
method presented allows emissions of other metals to be determined as well.
Arsenic (As)
The largest quantities of arsenic (As) are emitted from the Legnica Copper Smelter and Refinery and the
Głogów Copper Smelter and Refinery. Quantities above the threshold are also emitted by the Rudna Mine and
the Concentrators.
The companies of the Group do not emit this pollution or do not emit quantities exceeding the designated
threshold.
Cadmium (Cd)
The largest quantities of cadmium (Cd) are emitted from the Legnica Copper Smelter and Refinery and the
Głogów Copper Smelter and Refinery. The remaining divisions emit quantities below the designated threshold.
The companies of the Group do not emit this pollution or do not emit quantities exceeding the designated
threshold.
Copper (Cu)
The largest quantities of copper (Cu) are emitted from the Legnica Copper Smelter and Refinery and the
Głogów Copper Smelter and Refinery. Quantities above the threshold are also emitted by the Rudna Mine,
Polkowice-Sieroszowice Mine Division and the Concentrators.
The companies of the Group do not emit this pollution or do not emit quantities exceeding the designated
threshold.
Lead (Pb)
The largest quantities of lead (Pb) are emitted from the Legnica Copper Smelter and Refinery and the Głogów
Copper Smelter and Refinery. The remaining divisions emit quantities below the designated threshold.
The companies of the Group do not emit this pollution or do not emit quantities exceeding the designated
threshold.
Mercury (Hg)
The largest quantities of mercury (Hg) are emitted from the Legnica Copper Smelter and Refinery and the
Głogów Copper Smelter and Refinery. The remaining divisions emit quantities below the designated threshold.
The companies of the Group do not emit this pollution or do not emit quantities exceeding the designated
threshold.
Zinc (Zn)
Emissions originate from metal processing operations at the installations of Walcownia Metali Nieżelaznych
"ŁABĘDY" S.A.
The remaining companies of the KGHM Group do not emit this pollutant or do not emit quantities exceeding
the designated threshold. The divisions of KGHM also do not emit zinc in excess of the designated threshold.
Sulphur oxides (SO
x
/SO
2
)
Pollution mainly arises from the combustion of fuels in gas engines, gas and coal boilers and during
pyrometallurgical processes (furnace quenching, use of gaseous fuels in metallurgical units). The largest
volumes are generated in Głogów Copper Smelter and Refinery. Quantities above the threshold are also
emitted by Rudna Mine, Legnica Copper Smelter and Refinery and the Polkowice-Sieroszowice Mine Division.
The discharge is mainly determined on the basis of periodic emission measurements.
In the Group, quantities of sulphur oxides exceeding the designated threshold are emitted by the Central
Heating Plant in Legnica belonging to Wojewódzkie Przedsiębiorstwo Energetyki Cieplnej w Legnicy S.A. and
Energetyka Sp. z o.o.
Nitrogen oxides (NO
x
/NO
2
)
Pollution mainly arises from the combustion of fuels in gas engines, gas and coal boilers and during
metallurgical technological processes (furnace quenching, fuel combustion, use of gaseous fuels in
metallurgical units). The largest volumes are generated in Głogów Copper Smelter and Refinery. Quantities
above the threshold are also emitted by Rudna Mine, Legnica Copper Smelter and Refinery and the Polkowice-
Sieroszowice Mine Division.
In the KGHM Group, quantities of nitrogen oxides exceeding the designated threshold are emitted by the
Central Heating Plant in Legnica belonging to Wojewódzkie Przedsiębiorstwo Energetyki Cieplnej w Legnicy S.A.
and Energetyka Sp. z o.o.
Carbon monoxide (CO)
Carbon monoxide emissions are associated with virtually all fuel combustion and metallurgical processes in
which copper concentrates are smelted. The largest quantities of carbon monoxide are released from the
Cedynia Wire Rod Division of KGHM Polska Miedź S.A. Emissions of pollutants into the air are mainly related
to the operation of the CONTIROD plant. The main source of emissions is the natural gas-fired ASARCO shaft
305
melting furnace. Relatively limited amounts of natural gas are also consumed at the UPCAST plant, for the
quenching of steelmaking unit components. Emissions are mainly determined by periodic emission
measurements.
The companies of the Group do not emit this pollution or do not emit quantities exceeding the designated
threshold.
Hydrofluorocarbons (HFC)
Activities release refrigerants belonging mainly to the hydrofluorocarbon (HFC) group, which are used in air
conditioning equipment used in the entire KGHM Group. Emissions are determined by weighing during
periodic maintenance of air-conditioning systems. The largest quantities of this pollutant are released from
the KGHM Divisions: Rudna Mine Division, Polkowice-Sieroszowice Mine Division, Lubin Mine Division and one
from the Głogów Copper Smelter and Refinery.
The companies of the Group do not emit this pollutant or do not emit quantities exceeding the designated
threshold.
Non-methane volatile
organic compounds
(NMVOC)
Releases are primarily due to mining activities. The releases of these pollutants were calculated according to
the EMEP/EEA methodology, based on the diesel consumption of underground machinery and the emission
factors for working machinery
81
. Pollutant releases from gas engines at Surface Air Conditioning Stations were
calculated based on the amount of natural gas burned and its calorific value. Emissions for most according to
EMEP/EEA indicators
82
for gas engines. The largest quantities of NMVOCs are released from the Company’s
Rudna Mine Division.
The companies of the Group do not emit this pollution or do not emit quantities exceeding the designated
threshold.
Chlorine and its inorganic
compounds (as HCl)
The presence of chlorine and its compounds in coal, biomass and other materials and raw materials leads to
the formation of HCl during combustion and pyrometallurgical processes. The effects of high temperatures on
chlorine-containing materials results in the release of the chlorine contained in them in the form of hydrogen
chloride. Release determined on the basis of emission measurements conducted.
In the Group, quantities of hydrogen chloride are emitted by the Central Heating Plant in Legnica belonging to
Wojewódzkie Przedsiębiorstwo Energetyki Cieplnej w Legnicy S.A.
The Company’s divisions do not emit this pollutant in excess of the threshold.
The remaining companies of the Group do not emit this pollutant or do not emit quantities exceeding the
designated threshold.
Polycyclic aromatic
hydrocarbons (PAHs)
The emissions originate from the installations of Walcownia Metali Nieżelaznych "ŁABĘDY" S.A. Polycyclic
aromatic hydrocarbons are formed as a result of mill emulsion and mill oil in the cold rolling process, and are
also formed in the hot rolling system as a result of contact between the circulating water and the lubricants
and oils used in the mechanical system of the rolling mills. Most of the pollution is emitted from semi-
continuous casting lines, continuous casting lines and static casting lines. The strip cold rolling line emits PAHs
in insignificant quantities (not exceeding 10% of the reference value).
The Company’s divisions do not emit this pollutant in excess of the threshold. The remaining companies of the
Group do not emit this pollutant or do not emit quantities exceeding the designated threshold.
Significant air pollution from the activities of the international companies of the Group
Pollutants emitted to the air from installations operated by international Companies of the KGHM Polska Miedź S.A. Group
do not exceed the thresholds set out in Annex II of Regulation (EC) No. 166/2006 of the European Parliament and of the
Council of 18 January 2006 concerning the establishment of a European Pollutant Release and Transfer Register and
amending Council Directives 91/689/EEC and 96/61/EC (OJ L 033, 4.02.2006, p. 1)
The volumes of pollutants discharged into the air from installations and plants of the KGHM Polska Miedź S.A. Group were
determined on the basis of :
− information contained in the 2024 reports, for the purposes of environmental fees,
− results of periodic emission measurements,
− results of periodic technological measurements,
− results of research work and measurements,
− own calculations and estimates based on data on the quality and quantity of raw materials and fuels used,
− known parameters of the technological processes carried out in the installations,
− information acquired from the installation operators.
The methods, compliant with EU standards, for the determination of releases (emissions) are presented in Table 103.
Periodic measurements of emissions are carried out by laboratories accredited to the extent necessary to carry out the
tests or, as in the case of metallurgical divisions, by in-house measurement laboratories covered by Integrated Management
Systems - in this case there is no requirement to ensure verification of periodic measurements by independent laboratories.
81
EMEP/EEA air pollutant emission inventory guidebook 2023, Non-road mobile sources and machinery, tab. 3 1
82
EMEP/EEA air pollutant emission inventory guidebook 2023, Energy industries, tab. 3-22, reciprocating engines using natural gas
306
The method and scope of the measurements to be carried out are approved by administrative decisions issued by the
competent administrative authorities. In cases not requiring permits, releases (emissions) are calculated on the basis of
emission factors based on material, raw material and fuel consumption and literature data.
In the larger units of the Group, the data collection processes necessary for proper monitoring in the area of pollution are
carried out by the relevant services in an organised and planned manner. The proper organisation of these processes
further enables the correct implementation of pollution reporting. Most often, data collection, data analysis and reporting
processes are covered by management systems. The collection and analysis of environmental data is then extensive and
formalised.
The pollutants disclosed, in terms of their extent and method of quantification, are compliant with the administrative
decisions issued by the competent authority for individual Group installations.
Table 166. List of standards and methods for determining emissions of pollutants from installations of KGHM Polska
Miedź S.A. subject to the reporting obligation to the KRUiTZ
Item
Standard / method
Description
1
PN-ISO 10396:2001
Stationary source emissions - Sampling for automatic measurement of gaseous
component concentrations. The scope of the method is limited to the
determination of O
2
, CO
2
, CO, SO
2
, NO and NO
2
.
CO
2
PN-EN 15058:2017
Stationary source emissions - Determination of carbon monoxide mass
concentration - Standard reference method: non-dispersive infrared spectrometry.
3
EMEP/EEA 2023
Guide to air pollutant emission inventories
4
IPCC 2006 (CO
2
)
Commission Regulation (EU) No 2018/2066, IPCC 2006
Guidelines and database for emission factors and other parameters with technical
documentation or references
CO
2
5
OTH
Weighing
HFC
6
PN-Z-04008-4:1999
Protection of clean air. Sampling. Sampling of near-air gases (emissions) and their
preparation for analysis by gas chromatography
NMVOC
7
Sulphuropol NCR-37.58
Method developed and dedicated to waste gases from copper smelting
8
EMEP/EEA 2023
Guide to air pollutant emission inventories
9
PN-EN 14792:2017
Stationary source emissions - determination of nitrogen oxide mass concentration
- Standard reference method: chemiluminescence
NO
x
/NO
2
10
PN-90/Z-04009-11:2008
Concentration/content of nitrogen dioxide. Spectrophotometric method
11
EMEP/EEA 2023
Guide to air pollutant emission inventories
12
NDIR
Non-dispersive infrared spectrometry measurement
SO
x
/SO
2
13
PN-ISO 6767:1997
Determination of the mass concentration of sulphur dioxide - Parazaniline method
with tetrachloromethane(II) (TCM)
14
PN-ISO 7935:2000
Emissions from stationary sources - Determination of mass concentration of
sulphur dioxide - Performance characteristics of automatic measurement methods
15
EMEP/EEA 2023
Guide to air pollutant emission inventories
16
PN-EN 14385:2005
Emissions from stationary sources - Determination of total emissions of As, Cd, Co,
Cu, Mn, Ni, Pb, Sb, Tl and V
As, Cu,
Pb, Hg
17
PN-EN 13211+AC:2006
Air quality. Emissions from stationary sources. Manual method for total mercury
determination
18
PN-EN 13284-1:2007
Emissions from stationary sources. Determination of dust mass concentration in
the low range. Part I: Manual gravimetric method.
19
PN-Z-04030-7:1994
Protection of air purity -- Dust content testing - Measurement of dust concentration
and mass flux in flue gases by gravimetric method
20
EMEP/EEA 2023
Guide to air pollutant emission inventories
21
PN-EN 13649:2005
Emissions from stationary sources. Determination of the mass concentration of
individual gaseous organic compounds. Method using activated carbon and solvent
desorption
WWA
Table 167. Pollutants emitted to air from installations belonging to KGHM Polska Miedź S.A. according to the European
Pollutant Release and Transfer Register in kg/year
Pollutant
Notification threshold kg/year
2024 total kg/year
Carbon monoxide (CO)
500 000
633 000
Hydrofluorocarbons (HFC)
100
24 700
Non-methane volatile organic compounds (NMVOC)
100 000
108 000
Nitrogen oxides (NOx/NO
2
)
100 000
1 890 000
Sulphur oxides (SOx/SO
2
)
150 000
1 080 000
Hydrochlorofluorocarbons (HCFC)
1
4,82
307
Arsenic and its compounds (as As)
20
636
Cadmium and its compounds (as Cd)
10
56,9
Copper and its compounds (as Cu)
100
5 410
Lead and its compounds (as Pb)
200
2 860
Mercury and its compounds (as Hg)
10
31,7
Zinc and its compounds (as Zn)
200
203
Polycyclic aromatic hydrocarbons (PAH)
50
270
Chlorine and its inorganic compounds (as HCl)
10 000
22 300
Water pollution
The main source of emissions of pollutants to water from KGHM's operations are water discharges from the Żelazny Most
Tailings Storage Facility. The primary function of the Żelazny Most Tailings Storage Facility is to dispose of flotation waste
from copper ore enrichment processes, and it also serves as a reservoir for the retention and clarification of mine-
technology water used in the flotation process. Flotation waste is delivered to the site by hydrotransport and deposited as
a slurry. The waste grains settle within the bowl of the facility and the clarified filtrate water is returned to the ore
beneficiation plants. Excess industrial water is discharged from the circuit into the Odra River. The significant pollutants
emitted from the Żelazny Most Tailings Storage Facility are chlorides. However, the thresholds in Annex II of the PRTR
Regulation were also exceeded for pollutants such as total nitrogen, total phosphorus, the metals arsenic, cadmium,
chromium, copper, mercury nickel lead, zinc and phenols and total organic carbon.
Significant water pollutants from the operations of other companies of KGHM Polska Miedź S.A.
Significant pollutants emitted from Energetyka company wastewater treatment plant due to exceeding the thresholds set
out in Annex II of the PRTR Regulation are chlorides, total nitrogen, the metals arsenic, cadmium, chromium, copper,
mercury nickel lead, zinc, phenols and total organic carbon, organohalogen compounds AOX, and fluorides.
The remaining companies of the KGHM Group do not exceed the thresholds set by Annex II of the PRTR Regulation
Table 168. List of standards and methods for the determination of emissions of pollutants into water
Item
Standard / method
Pollutant
1
Total nitrogen forms determined according to PN-C-04576-08:1982,
PN-EN 26777:1999, PN-EN 25663:2001
Total nitrogen
2
PN-EN ISO 11885:2009
Total phosphorus
3
PN-EN ISO 11885:2009
Arsenic and its compounds (as As)
4
PN-EN ISO 11885:2009
Cadmium and its compounds (as Cd)
5
PN-EN ISO 11885:2009
Chromium and its compounds (as Cr)
6
PN-EN ISO 11885:2009
Copper and its compounds (as Cu)
7
PN-EN ISO 17852:2009
Mercury and its compounds (as Hg)
8
PN-EN ISO 11885:2009
Nickel and its compounds (as Ni)
9
PN-EN ISO 11885:2009
Lead and its compounds (as Pb)
10
PN-EN ISO 11885:2009
Zinc and its compounds (as Zn)
11
PN-EN ISO 9562: 2007
Organohalogen compounds (as AOX) (10)
12
PN-ISO 6439:1994
Phenols (as total C)
13
PN-EN 1484:1999
Total organic carbon (TOC) (as total C or COD/3)
14
PN-ISO 9297:1994
Chlorides (as total C)
15
PN-EN ISO 10304-1:2009AC:2012
Fluorides (as total F)
Table 169. Pollutants emitted to water from installations belonging to KGHM Polska Miedź S.A. according to the European
Pollutant Release and Transfer Register in kg/year
Name of pollutant
Notification threshold (kg)
2024
Total
Total nitrogen
50,000
1,186,457
Total phosphorus
5,000
5,578
Arsenic and its compounds (as As)
5
977
Cadmium and its compounds (as Cd)
5
272
Chromium and its compounds (as Cr)
50
373
Copper and its compounds (as Cu)
50
8,712
Mercury and its compounds (as Hg)
1
30
Nickel and its compounds (as Ni)
20
6,138
Lead and its compounds (as Pb)
20
6,739
Zinc and its compounds (as Zn)
100
5,992
Organohalogen compounds (as AOX) (10)
1,000
1,509
Phenols (as total C)
20
765
Total organic carbon (TOC) (as total C or COD/3)
50,000
576,268
Chlorides (as total C)
2,000,000
1,925,163,425
Fluorides (as total F)
2,000
26,492
308
[E2-5] Potentially hazardous substances and substances of very high concern
The Group is primarily engaged in mining activities - the production of copper concentrate and non-ferrous metals such as
electrolytic copper, refined lead, silver, gold, etc. The production processes use raw materials and auxiliary substances that
may exhibit potential hazardous properties as defined by the ESRS.
Substances recognised as SVHCs (Substances of Very High Concern) are also used in the production process. The use of these
substances takes place in accordance with the conditions set out in the exposure scenarios and safety data sheets.
The Group's production process produces mainly electrolytic copper unclassified in terms of exposures. Nevertheless,
some of the resulting products may exhibit potential hazardous properties as defined by the ESRS.
All substances of potential concern and SVHC are intended only for the professional uses identified during the REACH
substance registration process and their use shall be compliant with the provisions of the REACH and the conditions set
out in the exposure scenarios and safety data sheets.
The quantities shown in the tables below were determined on the basis of purchasing reports and production reports in
2024 for substances meeting the definitions of the ESRS standard as determined from the available material safety data
sheets. For substances used in volumetric units, conversion factors have been assigned for the calculation of mass in
accordance with the substance safety data sheets.
As substances can be classified in several hazard classes, the quantities shown in the tables reflect the total mass of
substances classified in a given hazard class.
Table 170. Potentially hazardous substances in the KGHM Group in 2024 .
Purchased for own use
Generated
Total
quantity [kg]
279 149 604
3 492 886 313
3 772 035 917
quantities per risk class [kg]
carcinogenicity category 1 and 2;
128 674 361
7 754 000
136 428 361
germ cell mutagenicity category 1 and 2;
2 980 689
2 360 000
5 340 689
reproductive toxicity category 1 and 2
8 643 885
2 013 494 448
2 022 138 333
endocrine disruption in relation to human health;
-
-
-
endocrine disruption in relation to environment;
-
-
-
properties of substances that are persistent, mobile and toxic or very
persistent, very mobile;
-
-
-
persistent, bioaccumulative and toxic or very persistent and very
bioaccumulative properties;
-
-
-
respiratory sensitisation category 1;
11 526
2 360 000
2 371 526
skin sensitisation category 1;
8 500 802
5 394 000
13 894 802
chronic risk to the aquatic environment of category 1-4;
18 965 833
3 463 225 765
3 482 191 599
threat to the ozone layer;
-
-
-
toxic effects on target organs, repeated exposure category 1 and 2;
110 233 922
3 416 236 112
3 526 470 035
toxic effects on target organs, one-off exposure category 1 and 2;
961
-
961
Substances negatively affecting the reuse and recycling of materials
-
-
-
Table 171. SVHC substances in the KGHM Group in 2024 .
Purchased for own
use
Generated
Total
quantity [kg]
4,934,154
60,309,360
65,243,514
quantities per risk class [kg]
carcinogenicity category 1 and 2;
4,934,154
-
4,934,154
germ cell mutagenicity category 1 and 2;
2,399,752
-
2,399,752
reproductive toxicity category 1 and 2
2,399,752
60,309,360
62,709,112
endocrine disruption in relation to human health;
-
-
-
endocrine disruption in relation to environment;
-
-
-
properties of substances that are persistent, mobile and toxic or
very persistent, very mobile;
-
-
-
persistent, bioaccumulative and toxic or very persistent and very
bioaccumulative properties;
-
-
-
309
respiratory sensitisation category 1;
8,664
-
8,664
skin sensitisation category 1;
4,902,320
-
4,902,320
chronic risk to the aquatic environment of category 1-4;
4,902,320
31,504,360
36,406,680
threat to the ozone layer;
-
-
-
toxic effects on target organs, repeated exposure category 1 and 2;
-
1,360
1,360
toxic effects on target organs, one-off exposure category 1 and 2;
-
-
-
Substances negatively affecting the reuse and recycling of
materials
-
-
-
[E2-6] Anticipated financial effects arising from pollution risks and opportunities
In accordance with ESRS 1 - Appendix C, the KGHM Polska Miedź S.A. Group omits the information set out in E2-6 in the
first year of Sustainability Reporting.
4.2.4 [E3] Water and marine resources
[E3-1] Policy related to water and marine resources
In 2024, the Group did not have in place a policy adopted to manage the significant impacts, risks and opportunities
associated with water and marine resources. Issues related to water resources are included in the Environmental Policy
adopted in KGHM Polska Miedź. S.A., whose activities have the highest environmental impact in the KGHM Group. Work on
the adoption of the KGHM Group's environmental policy will begin in 2025.
The Environmental Policy of KGHM Polska Miedź S.A. is a guiding document outlining the Company's general obligations
regarding the prevention and limitation of the negative impact of the Company's activities on the environment, the rational
management of natural resources and the implementation of a circular economy. The technical and organisational
measures implemented are based on the best available techniques, meet high environmental standards and respond to
stakeholder expectations.
In KGHM Polska Miedź S.A., the Vice President of the Management Board (Production) is responsible for the fulfilment of
these obligations.
The company has defined the potential environmental impacts and risks arising from its operations. A negative impact is
the consumption of water in technological processes. Potential influences include water intake from the dehydration of
mining plants, which is used in technological processes, and the discharge of industrial effluents from the hydrotechnical
management of mine and technological water from the Żelazny Most Tailings Storage Facility and from the process water
cycle.
KGHM Polska Miedź S.A. undertakes activities aimed at rational management of water resources, guided by both
technological needs and environmental requirements. The company complies with the provisions of the water permits,
ensuring that its processes comply with the applicable regulations. To minimise the impact of activities on aquatic
ecosystems, solutions are being implemented to optimise the use of the resource.
In the Company, the guiding principle in water management is the return of used water. This approach makes it possible
to reduce the use of primary water by reusing it in production processes. Where possible, technologies are being
implemented to recycle process water, reducing the need for new resources and minimising the environmental risks
associated with wastewater discharge.
In response to the risks associated with the discharge of industrial effluent from the hydrotreatment of mine-technology
waters, the Company discharges this effluent via a storage reservoir, while monitoring the parameters of the receiving body
(the Oder River) so as not to worsen its condition. The company monitors watercourses and optimising water extraction
and storage processes, as well as implements contingency plans to ensure operational continuity. In addition, measures
are in place to minimise the potential impact of water intake on water sources, including monitoring of groundwater table
levels and analysis of the long-term water balance in the Company's operating regions.
Key policy objectives for water and marine management include the reduction of emissions to the environment, including
water, and the efficient management of resources. Main assumptions of the policy related to water and marine resources
Table 172. Main assumptions of the policy related to water and marine resources
Sustainable use of water
resources
We strive to minimise the impact on water resources by using water efficiently and avoiding excessive
consumption. Our production processes take water conservation into account.
Protection of water quality
We use best available technology (BAT) to prevent pollution and improve water quality. We monitor water
quality on a regular basis and conduct corrective measures when irregularities are detected.
Compliance with
regulations and standards
We comply with applicable regulations concerning the protection of water resources at the national, regional
and local level. We implement international provisions on water conservation.
310
Public participation and
transparency
We cooperate with local communities and non-governmental organisations to understand their concerns and
incorporate their views into the decision-making process. We ensure transparency of the company's activities
related to water resources, provide information on water consumption, emitted pollutants.
Failure prevention and
crisis management
We have plans in place for emergency situations aimed at mitigating the effects of potential incidents related
to water resources. We train employees on how to deal with failures, as well as cooperate with local emergency
services.
Innovation in the scope of
water protection
We invest in research and development of technologies aimed at optimising the use of water and mitigating
the adverse environmental impact.
Review and improvement
We conduct periodic reviews of the company's water resources policy in order to adapt to new legal,
technological and social requirements. We implement the latest solutions in monitoring systems for the
purpose of implementing goals related to water resources.
The measures described above contribute to reducing the negative environmental impacts, mitigating risks and increasing
water resource efficiency.
Monitoring of the implementation of the policy is carried out through systematic reporting of environmental indicators,
including the analysis of water resource consumption.
The water resources management policy is based primarily on legal requirements, good practice in this field, takes into
account the specific nature of the industry and local conditions and requirements.
The Environmental Policy does not set specific targets and the scope and time limits for targets as required by MDR-A and
MDR-T.
The Environmental Policy of KGHM Polska Miedź S.A. is made available to all stakeholders through the official website of
the Company ..
[E3-2] Activities and resources related to water and marine resources
Water is one of the most valuable natural resources. KGHM Polska Miedź S.A. regularly monitors the quality of ground and
surface water in the vicinity of its plants to ensure that the company’s activities comply with strict environmental standards.
The companies of the KGHM Polska Miedź S.A. Group provide the necessary resources to carry out activities to achieve the
objectives of our policy. Detailed information in this respect is available in section 2.5 - Results of segments and information
on revenues in the Consolidated Financial Statements for 2024.
Water is necessary for the production of copper. It is used, among others, for enrichment (flotation) of ore, hydrotransport
of waste, and also in the core production line in the smelters. This is shown in the diagram below.
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Diagram 52. Water in the ore enrichment process (flotation) in KGHM Polska Miedź S.A.
Three underground copper mines (the Lubin Mine Division, the Rudna Mine Division and the Polkowice-Sieroszowice Mine
Division) mine the ore at depths of 400-1350 m under the ground surface. Due to the constant inflow of water from the
rock mass into the mines, saline mine water is pumped to the surface.
On the surface, retention reservoirs are located next to every mine and every ore enrichment plant collecting rainwater,
overflows of cooling water as well as extracted mine water. Water from the reservoirs is pumped into the flotation tailings
ponds (in some cases mine water is pumped directly into flotation tailings ponds). As a result, neither mine water nor
wastewater is discharged directly into local rivers. In the Concentrators, all water is used in the ore flotation process and
subsequently for hydrotransport of tailings to the Żelazny Most Tailings Storage Facility. At the Żelazny Most Tailings Storage
Facility, tailings are sedimented and the clarified water is returned via a system of decantation towers through pipelines on
the surface, to the Concentrators. To maintain the safety of the Żelazny Most Tailings Storage Facility, excess mine and
process water is discharged into the Odra River in a controlled manner.
The use of water extracted from the rock mass for production and in mining techniques (as backfill water) ensures that the
Company does not use any freshwater resources (groundwater or surface water) for its technological processes. All water
abstracted, before being discharged into the Odra River, is used by the Company for its production processes. The company
does not use any other water for its mining and flotation production processes and other much more valuable water
resources are thus saved. For more than 20 years these underground water flows completely meet the the Company’s
needs, and even exceed them.
In the early years of KGHM Polska Miedź S.A.'s operation, the need for such vast quantities of water for the flotation process
was met by taking water from the Odra River and pumping it to the Concentrators. As the mine workings have expanded,
the amount of underground water that has to be pumped to the surface has increased so as not to flood the mine. At
present, mine waters are practically entirely used in ore beneficiation and waste hydrotransport processes, replacing the
waters of the Odra River. For more than 20 years, mine water inflows have fully covered KGHM's demand and even
exceeded it.
Copper ore processing in the Concentrators and, in particular, grinding and flotation, require the supply of significant
quantities of process water. Only water from mine drainage is used for ore processing in KGHM Polska Miedź S.A., forming
a mine-process water circulation network between the Concentrators and the Żelazny Most Tailings Storage Facility. In
2024, the average monthly returns of water from the Żelazny Most Tailings Storage Facility to technological processes in
the Concentrators reached approximately 10.6 million m
3
of which:
− 2.8 million m
3
in the Lubin Concentrator;
− 2.0 million m
3
in the Polkowice Concentrator;
− 5.8 million m
3
in the Rudna Concentrator.
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In KGHM Polska Miedź S.A., approximately 130 million m
3
of water per year is recycled to the ore enrichment process. This
enables surface and ground water, one of the most valuable natural resources, to be saved.
Disposition of water from mine dewatering and discharges to the river Odra.
Since there is a constant inflow of mine water and rainwater into the system, excess water must be removed. Discharge of
mine-process wastewater/water from the operations of KGHM Polska Miedź S.A. is carried out in accordance with the
applicable laws and regulations and the provisions of the water law permit, taking into account the hydrological conditions
of the Odra River. The volume and quality of supernatant water discharged from the Żelazny Most Tailings Storage Facility
is closely monitored and regulated in relation to the water level in the river. The retention and dosing system operating at
KGHM Polska Miedź S.A. enables full control and oversight of the discharge of water into the Odra River. Consequently, at
low water levels in the receiving water body, we can suspend the discharge of wastewater. In addition, the condition of
regulating the load of salt contained in the discharged effluent to prevent exceeding 1000 mg/l of the sum of chlorides and
sulphates in the river waters after mixing with the effluent, is strictly observed.
The process water circulation system for mine water discharge, flotation, hydrotransport as well as retention has specific
technical and technological capabilities. Increased inflows from the mines are retained in the Żelazny Most Tailings Storage
Facility.
In addition, in 2024 an underground retention reservoir capable of storing approximately 1.5 million m3 of saline water in
the event of a reduction in discharge into the Odra River was put into operation at the Lubin Mine Division of KGHM Polska
Miedź S.A. A concept study of a Selective Water Management System was also initiated.
Water in the mining process in KGHM INTERNATIONAL LTD.
KGHM INTERNATIONAL LTD. mines also undertake numerous measures to protect water. In the Robinson Mine, dewatering
of the rock mass is carried out in order to carry out open-pit mining. A total of around 19 million m3 of water is pumped
out annually, most of which is used for the ore flotation process and dust control. The water used in the flotation process
is pumped to the tailings ponds from where it is directed to the enrichment process. After the enrichment process, the
water together with the tailings is sent to the tailings disposal facility, where the tailings are sedimented and the clarified
water is returned to the flotation process via the operating channel. Of the total water pumped, approximately 1.8 million
m3 of fresh, clean water is pumped into the City of Ely's water supply system and 3.5 million m
3
is discharged into Gleason
Creek.
In the case of the Carlota mine, engineering solutions ensure separation of contaminated water from clean water. Rainwater
that has been in contact with the mine is captured and then used in technological processes.
At McCreedy West mine, the water used underground includes recycled water collected through a stormwater management
system where surface water runoff is diverted underground. If needed, additional water is drawn from the Onaping River.
All water from McCreedy West is transferred to Levack. At Levack, all surface water is diverted underground or into a water
body, where it goes for treatment. All water from the underground workings is collected and pumped to the surface to an
external surface water treatment system, where the water goes through a number of stages before being discharged into
the natural environment.
At the Podolsky mine, all excess water from the shaft, ramp and site is collected/pumped into/onto the mine pond and then
pumped to the mine's on-site wastewater treatment plant for treatment before being returned to the pond or discharged
to the environment.
In the case of the Victoria project, infiltration water from rock storage potentially generating acid leachate is pumped to the
surface and collects in an underground adit. These are small amounts of water at around 30 thousand m
3
. The infiltration
water is pumped to the sewage treatment plant. After treatment, the water is diverted to the well for reuse in drilling
operations or discharged into Fairbank Creek.
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Water in the metallurgical process of KGHM Polska Miedź S.A.
Diagram 53. Water in the electrolytic copper production process in KGHM Polska Miedź S.A.
The Legnica Copper Smelter and Refinery and the Głogów Copper Smelter and Refinery consume significant quantities of
water (approximately 11 million m3 per year), which is supplied by the company “Energetyka” sp. z o.o. This company
supplies water drawn from the Kaczawa river to the Legnica Copper Smelter and Refinery and from the Odra river to the
Głogów Copper Smelter and Refinery.
The water used in production processes is routed back to “Energetyka” sp. z o.o. for treatment. Approximately 30% of the
global stream is reused for production processes in the technological processes of the smelters. Approximately 8 million
m3 of the remaining treated effluents, with an efficiency of over 94%, is discharged to the Odra river (in the case of the
Głogów Copper Smelter and Refinery) and to the Pawłówka stream, which feeds the Kaczawa river (in the case of the Legnica
Copper Smelter and Refinery).
In both metallurgical plants, rainwater is collected via separate sewers and discharged to treatment plants operated by the
company “Energetyka” sp. z o.o. After treatment, these waters are returned to the metallurgical processes.
The Cedynia Wire Rod Division is supplied with water for human consumption and for technological purposes. The Orsk
intake is a source of water for drinking purposes. Two wells 1z and 2z are currently in operation. The Chełm intake wells
supply the plant with water for technological purposes.
Wastewater generated from the area of the Cedynia Wire Rod Division is treated in the local wastewater treatment plant
and, after treatment, discharged via a discharge collector into the Odra River. Since 2021, part of the stream of treated
rainwater and effluents from filter flushing at the Water Treatment Plant has been returned for reuse in the cooling circuits.
In 2024, the volume reached 6,212 m3.
In the context of water management in our installations, there are many issues that are taken into account and strictly
controlled due to the potential environmental impact.
Table 173. Key issues related to water resources management
Water consumption
The mining and non-ferrous metals processing industry requires significant amounts of water for various
processes, such as mining, processing (flotation), pyrometallurgical processes. Consequently, effective
management and optimisation of water consumption are of key importance for us.
Wastewater discharge
All wastewater generated in our installations is treated before being discharged into the environment.
Pollution
We control the quantity and quality of pollutants discharged into the aquatic ecosystems.
Monitoring and reporting
We regularly monitor and report the results of our measurements, in accordance with the rules and
regulations resulting from the environmental standard.
[E3-3] Targets related to water and marine resources
The most significant environmental objectives related to water resources comprise a range of measures aimed at
protection, sustainable use and improvement of water quality, both surface and groundwater. Each activity of the
314
companies of the KGHM Polska Miedź S.A. Group in the area of water use, which requires the holding of the relevant water
law permits and integrated permits, is undertaken following a public participation procedure. Stakeholder requests are
taken into account during this procedure.
Table 174. Rules of water resources management
Preservation of
biodiversity in the aquatic
environment
We maintain the diversity of species and aquatic ecosystems, which contributes to the ecological balance.
Protection and sustainable
use of water resources
We manage water resources sustainably, ensuring that they are available for present and future
generations without excessive exploitation.
Improvement of water
quality
We reduce the generated pollutants to prevent the degradation of aquatic ecosystems.
Securing access to clean
drinking water
We provide access to safe and clean drinking water for the public.
Climate change adaptation
We are developing strategies and measures aimed at adaptation to climate change that may affect water
availability.
Development of
monitoring systems
We have effective monitoring systems in place that enable strict monitoring of the condition of water
resources and the effects of our operations.
Meeting these objectives is critical to the protection and sustainable management of water resources in our environment.
Companies belonging to the KGHM Polska Miedź S.A. Group did not set measurable goals related to water resources and
water contamination. The Group’s companies operate in areas that are not exposed to water shortages, hence there is no
need for the Group to set environmental targets for water resources. Our activities focus on operating in accordance with
administrative decisions and higher-level legislation. We do not plan to set measurable targets in the coming years. We
have achieved such a high level of water protection that setting targets is now unjustified. Further minimisation of impacts
will be too costly in relation to the projected environmental benefits.
[E3-4] Water consumption
Information on water and wastewater management in its broadest sense, both quantitative (for wastewater) and qualitative
(for water), is generally collected in the Group companies using two methods: measurements made by the entities or on
the basis of accounting documents (invoices) for purchased services. In a few cases, information on the amount of
wastewater discharged is provided on the basis of estimates, which can be made from water consumption meter readings.
The first way results directly from the legal provisions in force in Poland, which impose obligations on the entrepreneur
using the environment to carry out environmental impact measurements (measuring the amount of water taken and the
quantity and quality of wastewater). The method, frequency and scope of measurements are described in the
administrative decisions in force authorising the use of the environment (water permits, integrated permits), and in the
implementing regulations for the Water Law Act. In order to fulfil these obligations, CG Companies that operate installations
are obliged to carry out measurements, including sampling in accordance with the provisions of the Environmental
Protection Law, Article 147a, by an accredited laboratory or certified testing units. On the other hand, the measurement of
the amount of water withdrawn is carried out by the operator or user of the installation itself - in accordance with the
Environmental Protection Law. Companies which, due to the nature of their activities, do not have permits, purchase
services in the form of water supply or wastewater collection from other entities on the basis of contracts concluded and
have purchase documents. Using the above methodologies, we prepare the information necessary for presentation in the
report.
At KGHM Polska Miedź S.A., measurements of water abstraction and wastewater discharge go far beyond the obligations
arising directly from legal regulations. The best example of this is the system for monitoring the chloride and sulphate load
contained in mine water from mine drainage. The system is based on samplers and flow meters installed on all pipelines
that pump underground water to the surface. With this system, the company carries out online measurements of the
quantity and quality of water discharged from the mines. Measurements are averaged over 24 hours and chloride and
sulphate analyses are carried out by an accredited laboratory.
The Group’s companies do not operate in areas of significant water scarcity, but nevertheless operate in areas exposed to
water risk, which is defined as: a catchment area with a number of physical aspects related to water:
− it causes the status of one or more bodies of water to be less than good or to be in decline (as defined in Directive
2000/60/EC of the European Parliament and of the Council, indicating significant problems of water availability, quality,
quantity (including significant water scarcity); or
− it leads to water availability, regulatory or reputational issues (including water sharing with communities and water
affordability) for its own plants and those of major suppliers.
315
In view of the foregoing, for prudential purposes, it has been determined that water consumption in water-exposed areas
equals the Group's water consumption. The largest production assets of the KGHM Polska Miedź S.A. Group (all Divisions
of KGHM, the Energetyka Company, WMN Łabędy) discharge wastewater into the Odra catchment area. The Odra River is
below good status almost throughout its course, but this does not mean that our production activities generate significant
problems in terms of water availability, quality and quantity.
Table 175. Water management in the KGHM Polska Miedź S.A. Group in 2024
Intake
Quantity [m3]
Surface water (total)
10,248,691
Groundwater (total)
24,810,120
Seawater (total)
0
Mine water
45,051,660
Water purchase outside the Group
357,920
Total intake
80,468,390
Discharge
Quantity [m3]
Surface water
69,279,133
Ground and soil
1,432
Sea
0
Discharge of wastewater into the sewerage system of an external entity outside KGHM
Group, public network
2,192,209
Sale of water to an external entity outside the KGHM Group
1,252,069
Discharge total
72,724,843
Water recycling
141,869,399
Consumption
7,743,547
Water storage at the beginning of the year
12,924,804
Water storage at the end of the year
6,585,406
Consumption in areas exposed to water risk
7,743,547
Table 176. Water absorption
Water absorption
2024
Total water consumption within own operations in m3
per EUR 1 million net revenue
937
[E3-5] Anticipated financial effects resulting from impacts, risks and opportunities related to water and marine
resources
In accordance with ESRS 1 - Appendix C, the KGHM Polska Miedź S.A. Group omits the information set out in E3-5 in the
first year of Sustainability Reporting.
4.2.5 [E4] Biodiversity and ecosystems
[E4-1] Biodiversity and ecosystem transition plan and integration of biodiversity and ecosystems in the strategy
and business model
In 2024, the Group did not have in place a transformation plan for biodiversity and ecosystems.
All new projects are subject to the procedure on obtaining the environmental permit. Ecological surveys are always carried
out at the beginning of a project to enable the development of the project according to the impact mitigation hierarchy.
− First, avoid impact as much as possible.
− Second, minimise impacts that cannot be avoided by mitigation measures.
− Third, reverse the impact through ecological restoration and reconstruction.
− Fourth, compensate for impacts caused and strive to create a net gain for biodiversity
The results of biodiversity surveys allow the optimal location of new developments to be selected in terms of minimising
the impact on biodiversity. Environmental Impact Assessments (EIAs) regarding natural and cultural values are prepared at
an early stage of the permit issuing process for new projects or changes to existing operations.
Potential ecological compensation measures are developed during the permit issuing process for new activities that may
cause biodiversity loss.
The KGHM Group has not embedded resilience into its strategy in relation to biodiversity and ecosystems.
316
[E4-2] Policies related to biodiversity and ecosystems
In 2024, the Group did not have in place a policy adopted to manage the significant impacts, risks and opportunities
associated with biodiversity and ecosystems. Directions of actions related to biodiversity, on the other hand, are included
in the Environmental Policy of KGHM Polska Miedź S.A. Work on the adoption of the KGHM Group's environmental policy
will begin in 2025.
The Environmental Policy of KGHM Polska Miedź S.A. as a guidance document is based on the sustainable approach, care
for the environment and compliance with legal standards. The basic assumption of the existing biodiversity policy is the
application of assessing and addressing threats and impacts on the living natural world through the implementation of a
hierarchy of mitigation measures. The implementation of the Environmental Policy is overseen by the Vice President of the
Management Board (Production).
The company has defined both real and potential environmental impacts and risks arising from its operations. Negative,
real-world impacts on biodiversity and ecosystems are the impacts of mining activities on fauna, flora and habitats, and
land use, which may involve tree felling and land conversion. Potential negative impacts may result from the generation of
discharges of water with increased mineralisation from dehydration of mining plants, the introduction of pollutants into
selected components of the environment and the impact of the operational activities of KGHM Polska Miedź S.A.'s
contractors. The Group also generates real, positive impacts on biodiversity and ecosystems through a number of initiatives
and projects for the conservation of valuable natural species and their habitats. Risks include maintaining the quality of
water discharged from the Żelazny Most Tailings Storage Facility and the inability to manage increased water inflows from
mining operations.
Table 177. Rules of biodiversity management and ecosystem conservation
Rational use of natural resources, such as
land, water, forests
We manage land sparingly, limit soil sealing to necessary situations such as the need to
protect land and groundwater from contaminant migration, use treated water and
wastewater repeatedly, manage forests, which perform protective functions that
enhance biodiversity; no productive role for forest land.
Rational management of natural resources
Ore extraction carried out by methods appropriate to the characteristics of the ore body
- underground mines operating in Poland use the room-and-pillar system, foreign assets
are dominated by the open-pillar system.
Recovery of usable value of land that has
been adversely affected by our activities
We remediate and recultivate our own land and work with local authorities to finance
the liming of agriculturally used soils.
Respecting legally designated protected
areas and ensuring that any new
operations or changes to existing
operations are carried out lawfully within
our licence to operate
Investment and modernisation that meets legal criteria is carried out following an
environmental impact assessment, an important element of which is an assessment of
the impact on the world of living nature; any amendment to a decision that constitutes
a licence to use the environment takes into account the potential impact on legally
designated protected areas; we carry out active measures to support biodiversity in a
protected area designated on the initiative of KGHM - the "Łęgi Głogowskie" ecological
site.
Refraining from conducting activities at
World Heritage Sites and, where our
activities are adjacent to World Heritage
Sites, we will ensure that our activities do
not compromise the safety and value of
these sites
The KGHM Group does not conduct technological operations at or near World Heritage
Sites.
Reducing the emission of pollutants into
the air, water and soil
We are constantly improving the processes and technological operations we carry out,
with the aim of reducing environmental emissions as much as possible. Minimising
emissions has a positive impact on biodiversity.
The measures described above contribute to reducing the negative environmental impacts, mitigating risks and increasing
biodiversity as well as maintaining diversity of ecosystems.
In creating its environmental policy, which includes elements of policies related to biodiversity and ecosystems, KGHM
Polska Miedź S.A. assessed the materiality of its interactions with the environment. For this reason, we have focused only
on the issues identified above, which in our view may directly or indirectly affect living organisms and their habitats. The
assessment of materiality did not address issues unrelated to the operating activities of the KGHM Polska Miedź S.A. Group
companies (e.g. deserts, impacts on and dependencies on ecosystem services, invasive alien species, ocean and marine
practices and policies). Selected issues affecting biodiversity relating to the protection of the land surface (e.g. identification
of contaminants, prevention of soil sealing by ensuring a minimum proportion of biologically active area) are implemented
by KGHM by law. It was therefore considered unnecessary to include mandatory activities in the established policy.
317
The Environmental Policy does not set specific targets and the scope and time limits for targets as required by MDR-A and
MDR-T.
The Environmental Policy of KGHM Polska Miedź S.A. is made available to all stakeholders through the official website of
the Company .
[E4-3] Activities and resources related to biodiversity and ecosystems
Emission impact on biodiversity
We respect legally designated protected areas and do not explore or develop projects located on the World Heritage Sites.
The majority of our operations are located in industrial areas. Where our operations have the potential to impact on the
state of biodiversity in areas covered by legal forms of nature conservation, we take initiatives to mitigate this risk.
In the vicinity of one of the plants of KGHM Polska Miedź S.A. (Cedynia Wire Rod Division), many years after the start of
production which took place in 1979, the following area forms of nature conservation were established:
− Natura 2000 sites - Special Habitat Protection Area Natura 2000 Łęgi Odrzańskie (PLC020002). The area designated in
2007 now covers the space of 21,350.49 ha. The area to be protected is a fragment of the Odra Valley, within the limits
of the river's former floodplain, together with the estuarine section of the Barycz Valley. The area includes the riparian
habitats preserved in the inter-coastal area and the best-established forests, meadows and low bogs outside its
perimeter.
− nature reserve - the “Orchid Scarp” reserve, established in 1994, covers woodland areas of 65.17 ha. The main plant
communities of the reserve are Central European oak-hornbeam and ash-oak woodland and fragmentary sub-
mountain ash-hornbeam woodland. There are sites of protected and rare plant species in the reserve, including the
Swallow's bark beetle (Epipactis albensis).
In 2024, KGHM Polska Miedź S.A., as a leading global copper producer and one of the leaders in wire rod production in
Europe, embarked on activities whose primary task is to determine the impact of the Cedynia Wire Rod Division on the
state of biodiversity in areas of potential impact. The expertise is prepared by a team of independent external experts. The
work carried out so far has included the acquisition and analysis of available material to assess the status of the natural
resources of protected areas. As part of the commissioned activities, a comprehensive nature inventory of industrial sites
and areas located within a buffer of 500 m from them, including protected areas, was carried out. Individual taxonomic
units of plants and animals are catalogued, as well as natural habitats and plant communities. Special attention was paid
to valuable species and habitats under legal protection.
Diagram 54. Distribution of valuable and protected natural elements
Further work within the framework of the expert report envisages, among other things, determining the impact of
emissions generated by the Cedynia Wire Rod Division on biodiversity, including reference to the protection objectives and
318
threats indicated in the plans of protection tasks of protected areas. Potential recommendations for minimising and
compensatory measures will also be presented.
Impact on the biodiversity of aquatic ecosystems
Mining activities carried out in Poland generate the discharge of excess water with elevated chloride and sulphate content.
This issue is described in more detail in section E3. KGHM Polska Miedź S.A., being aware of its impact on the environment,
cooperates with the bodies of PGW Wody Polskie (Polish Water Management Authority) and takes active steps to assess
the impact of generated emissions on living organisms. To this end, in fulfilment of the obligations imposed by the water
permit for water services related to the discharge of waste water into the Odra River, a collaboration with a scientific unit
was initiated in 2024, which is expected to result in a determination of the effects of salinity on selected aquatic organisms.
The results of the expertise should be known by the end of 2025.
Land use change and compensation measures
Extension of the Żelazny Most Tailings Storage Facility
Some of the economic operations carried out by the KGHM Group require the exclusion of significant areas of land from
existing management. One of such efforts was the need to expand the Żelazny Most Tailings Storage Facility to include the
so-called South Quarters. The construction of the new part of the facility required the elimination of a dense forest complex
functioning as a protective forest In accordance with the decision establishing the environmental conditions for the project,
KGHM Polska Miedź S.A. was obliged, among others, to perform environmental compensation consisting of:
− afforestation of land managed by selected forestry districts (20.83 ha) - completion date by 31 December 2019
− planting of trees and shrubs in the municipalities of Rudna, Polkowice and Grębocice (min. 331 ha) - completion date
by 31 December 2030
− second-storey reforestation of between 800,000 and 1 million forest seedlings on land in selected forest districts (min.
200 ha) - completion date by 31 December 2022
− recultivation of the property constituting the excavation pits after sand mining in the direction of forestry (8.13 ha) -
completion date by 31 December 2019
− planting trees and shrubs along scenic routes in sensitive locations, creating a natural screen for the development.
In the fulfilment of the provisions of the environmental decision described above, in 2024 KGHM Polska Miedź S.A. planted
720 trees in the localities of the municipalities of Polkowice and Rudna, within which the Żelazny Most Tailings Storage
Facility is located. In addition, 18.45 hectares of agricultural land have been afforested in the Lubin Forest District. The total
of 114,170 seedlings of forest-forming species were used for this purpose.
Impact on endangered species and habitats
As a result of the assessment performed, the potential and actual impacts of the activities on habitats and species at risk
have been identified. Impacts are related to mining activities carried out in international assets (USA, Canada).
Robinson mine
4.2.5.1.1.1.1 Golden eagle (Aquila chrysaetos)
As a result of the need to expand the Liberty pit, the environmental impact assessment was carried out in 2021. This
assessment identified the potential impact of the development on the local golden eagle population. The commencement
of ore mining in the Liberty pit was associated with the removal of 4 nests and the loss of territory. This action was
sanctioned by the relevant permit issued on 25 February 2021 which covers 30 breeding seasons (2021-2050). In this period,
Robinson Mine is committed to monitoring the use of the entire site by golden eagles. An external expert conducts surveys
in three periods (January-March, March-Mid-April and May-June) to determine territory occupation, breeding activity and
the success of any breeding attempts.
In addition to monitoring efforts, preventive measures are also in place, including the following:
− Removal of dead animals, which are the food base of eagles, from all roads within active extraction areas and their
disposal to reduce the risk of collisions between foraging birds and vehicles.
− Building awareness among employees and contractors through a training program on minimising the risk of collisions
with eagles.
− All power poles in the mining project area must be maintained in accordance with Avian Power Line Interaction
Committee (APLIC) safety standards for eagles.
4.2.5.1.1.1.2 Sharp-tailed warbler/roystercatcher (Centrocercus urophasianus)
In relation to the need to build a water main, Robinson Mine carried out an Environmental Impact Statement (EIS) and
prepared a Right of Way (ROW) application. The findings concluded that the earthworks associated with the construction
of the water supply infrastructure pose a potential threat to the habitat occupied by the ostracod prairie warbler. At the
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same time, it should be emphasised that, in order to limit the impact, the water supply network has been designed in
accordance with the art of engineering and optimised in terms of its routing.
In accordance with Nevada law, the Conservation Credit System (CCS) procedure, which involves the purchase of so-called
environmental credits by the developer, was used to compensate for the impacts that were not avoided. The value of one
credit unit ranges from USD 2,000 to USD 3,000 (203 units have been purchased to date). The funds from the
aforementioned loans are compensation, used to restore or increase the availability of habitat for the protected species
included in the procedure.
Carlota mine
Open-pit mining activities, among other things through the need for mine drainage and rainwater disposal, can affect water
relations in the vicinity. Undisturbed access to water is in turn a prerequisite for the proper functioning of ecosystems. The
guarantee of an access to water is particularly important in the dry climate of the state of Arizona, where the Carlota mine
operates. There is a 1.21 ha wetland near the pit. One of its wetlands holds water all year round. In order to supervise the
impact of mining activities on water resources and to guarantee the integrity of water relations in the vicinity of the pit, the
operator of the Carlota mine implements the obligation to carry out cyclical wetland monitoring.
Victoria Mine
The Victoria Project, as required by the Canadian law, protects the whooping cottontail (Antrostomus vociferus) habitat,
among other things by limiting plant development activities outside its existing boundaries during the nesting season and
by providing endangered species training to all employees. The mine performs annual surveys to monitor the population
status of this endangered bird species.
Biodiversity in the value chain
The KGHM Group, in carrying out economic operations ranging from exploration and mining of raw materials, through
smelting activities to processing, relies mainly on its own raw materials. We therefore take full responsibility for the
processes implemented, including, among others, the environmental impacts and the impacts generated. Due to the scale
of the business and its complexity, we rely on supplies of consumables and energy sources. We make limited use of foreign
inputs in the form of concentrates. We are developing copper scrap activities as a source of valuable raw material, in line
with the CE concept. Our products are used as raw materials for further processing in many industries.
We recognise that our suppliers and customers may interact with the environment in the area of biodiversity and
ecosystems. However, we have no confirmed information on the actual or potential negative impact of key contractors on
the habitat condition and population size of valuable natural species.
Biodiversity conservation and enhancement projects
Ecological site - “Łęgi Głogowskie”
KGHM Polska Miedź S.A. is actively involved in activities aimed at enhancing biodiversity in areas administered by the
company or directly adjacent to it. In order to secure the high natural values of part of the grounds of the former protective
zone of the Głogów smelter, an ecological ground "Łęgi Głogowskie" was created by a decree of the Lower Silesian Voivode
of 28 October 2005. The area to be protected includes the floodplain of the Odra Valley over the entire width of the inter-
dune. The 636.055-hectare site is divided by the Odra River to the south and north part. Protected areas include the oxbow
lakes of the Odra River, vegetation complexes ranging from aquatic and riparian to fertile deciduous forests with numerous
protected species of fauna and flora.
Every year, KGHM Polska Miedź S.A., in agreement with the relevant local government bodies, carries out procedures in the
area of the "Łęgi Głogowskie" ecological site in order to maintain the condition, restore habitats and protect the species of
valuable flora and fauna occurring in this area.
Activities undertaken include:
− mowing of meadows in a way that leaves patches of late-maturing vegetation (Cnidion dubii communities - celery
meadows) and mowing of reed rushes in meadow habitats,
− removal of volunteer trees and shrubs growing expansively into valuable meadow habitats,
− removal of geographically alien species (e.g. ash-leaf maple, American cherry, hybrid poplar hybrids),
− planting trees and shrubs of native species (including melliferous species for the so-called "pollinators - wild bees")
compatible with the habitat type of the forest on the sites of removed plantations of trees of foreign origin,
− planting of traditional “old” varieties of fruit trees (establishment of so-called mid-forest refuges for birds, mammals,
etc.),
− hanging up day-use shelters for bats and nesting boxes for birds,
− constructing clay and wood structures, i.e. replacement habitats for clay nesting insects,
− clean-up work involving the systematic removal of abandoned waste,
− marking the ecological site with official, information and educational boards.
Activities for protected species
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Peregrines are some of the rarest birds in Poland. KGHM Polska Miedź S.A. has been actively contributing to the protection
of this endangered species for many years. Every year, on one of the emitters of the Głogów smelter division, a pair of these
birds of prey are raised in a mounted nesting platform. In 2024, another pair made its home on facilities belonging to the
Polkowice Ore Enrichment Plant Division, successfully raising offspring (4 young birds). The birds are cared for by the
company's employees in cooperation with specialists from the Wildlife Society and volunteers. In order to promote
knowledge of this species, KGHM Polska Miedź S.A. has launched an educational program aimed at children in the Copper
Belt. Głogów falcons can be observed at: www.pereginus.pl
Forest management
KGHM Polska Miedź S.A., in conducting its business activities, does not focus exclusively on the management of land
occupied by technological installations and equipment and other supporting infrastructure. In order to reduce the impact
of its processes on its surroundings, including, above all, local communities, the company actively manages more than 1360
ha of forested and wooded land under its ownership or in perpetual use. Of these, forests account for more than 98%
(approx. 1340 ha - including on the "Łęgi Głogowskie" ecological site approx. 154 ha). The remaining tree-covered land is
classified as wooded and shrub land (approximately 20 ha) and agricultural land in the form of wooded and shrub
permanent grassland (approximately 1.5 ha) and arable land (approximately 3 ha). In addition, KGHM Polska Miedź S.A.
Legnica Copper Smelter and Refinery, on an area of approximately 150 hectares, grows forest on the land owned by others,
e.g. KOWR (National Agricultural Support Centre).
In the forest areas managed by KGHM Polska Miedź S.A., forest management is carried out based on forest management
plans (PUL). More than 240,000 tree and shrub seedlings were planted in 2024.
[E4-4] Targets related to biodiversity and ecosystems
In 2024, the Group had no measurable biodiversity and ecosystem targets. Potential targets will be set in the KGHM Group
Environmental Policy, following an assessment of the potential impact on biodiversity and ecosystems of the operational
areas, which we started in 2023. Work on the KGHM Group Environmental Policy will begin in 2025.
[E4-5] Impact measures related to changes in the scope of biodiversity and ecosystem
Having analysed the locations of the KGHM Group in the context of biodiversity-sensitive areas, it was determined that only
the discharge of treated wastewater from the Cedynia Wire Rod Division takes place into the Special Bird Protection Area
and the Special Habitat Protection Area Natura 2000 "Łęgi Odrzańskie" - the other locations of the Group are not in
biodiversity-sensitive areas. In the case of the discharge of treated wastewater from the Cedynia Wire Rod Division into the
Natura 2000 area, this activity does not have a significant negative impact due to the fact that the quantity and quality of
the wastewater meets the strict requirements of Best Available Techniques (BAT).
The aim of confirming this is to proceed with an expert assessment of the impact of the Cedynia Wire Rod Division on the
state of biodiversity in the areas of potential impact. The completion of the assessment has been scheduled in 2025.
Following the assessment of potential impacts on biodiversity and ecosystems has been carried out, impact measures
related to changes in the biodiversity and ecosystems of our operational areas will be identified.
[E4-6] Anticipated financial effects arising from significant risks risks and opportunities related to biodiversity
In accordance with ESRS 1 - Appendix C, the KGHM Polska Miedź S.A. Group omits the information set out in E4-6 in the
first year of Sustainability Reporting.
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4.2.6 [E5] Use of resources and circular economy
[E5-1] Policies related to the use of resources and circular economy
In 2024, the KGHM Group did not have a policy in place related to resource utilisation and the circular economy. Issues
related to resource utilisation and the circular economy are included in the Environmental Policy adopted in the parent
company KGHM Polska Miedź S.A., whose activities have the greatest impact on the environment in the KGHM Group. Work
on the adoption of the KGHM Polska Miedź S.A. Group's environmental policy will start in 2025.
The Environmental Policy of KGHM Polska Miedź S.A. is a guiding document outlining the Company's general obligations
regarding the prevention and limitation of the negative impact of its activities on the environment. The Environmental Policy
of KGHM Polska Miedź S.A. defines the principles for managing the impact of the Company's activities on the environment
and the climate. Its key objectives include the prevention and mitigation of environmental impacts, the rational
management of natural resources and the implementation of a circular economy. The technical and organisational
measures implemented are based on the best available techniques, meet high environmental standards and respond to
stakeholder expectations.
Responsibility for the implementation of these commitments rests with the Vice President of the Management Board
(Production), while the implementation of the policy is the responsibility of the relevant functional units responsible for the
respective areas.
The company has defined both real and potential environmental impacts and risks arising from its operations. Negative
Actual Use involves the use of fossil and non-renewable raw materials The potential impact involves the generation of non-
recyclable waste and other recovery processes.
KGHM Polska Miedź S.A. undertakes activities aimed at rational management of natural resources, guided by both
technological needs and environmental requirements. The company complies with the provisions of the permits, ensuring
that its processes comply with the applicable regulations. To minimise the impact of activities on aquatic ecosystems,
solutions are implemented to optimise the use of the resource.
The company applies the principles of the circular economy (CE) which enables the reduction of waste for disposal through
landfill, reducing the need for new resources and minimising environmental risks associated with pollution.
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Table 178. Policy fundamentals related to resource use and the circular economy
Rational management of
natural resources
We are developing deposit exploitation systems to optimise ore extraction and waste rock management.
Reducing the amount of
waste generated
We reduce the weight of waste by using it as raw materials.
Development of waste
management techniques
We aim to maximise the further use of production residues from our own process lines to recover
copper and associated metals from them through the development of waste management techniques.
Compliance with
regulations and standards
We comply with applicable regulations concerning the waste management at the national, regional and
local level. We apply Best Available Techniques (BAT) for waste management.
Public participation and
transparency
We cooperate with local communities and non-governmental organisations to understand their
concerns and incorporate their views into the decision-making process. We ensure transparency of the
company's activities related to natural resources, provide information on waste disposal, emitted
pollutants.
Failure prevention and
crisis management
We have plans in place for emergency situations aimed at mitigating the effects of potential incidents
related to waste management. We train employees on how to deal with failures, as well as cooperate
with local emergency services. We carry out continuous monitoring of waste treatment sites.
Innovation in the scope of
environmental protection
We invest in research and development of technologies aimed at mitigation of the adverse
environmental impact.
Review and improvement
We conduct periodic reviews of the company's pollution policy in order to adapt to new legal,
technological and social requirements. We implement the latest solutions in monitoring systems for the
purpose of implementing goals related to pollution.
The measures described above contribute to minimisation of the negative environmental impacts, mitigating risks and
increasing the efficiency of natural resources and waste management.
The resource management policy and the circular economy is based primarily on legal requirements and best practices in
this field, taking into account the specific nature of our industry as well as local conditions and requirements. The KGHM
Group does not plan withdraw from the use of primary resources but is nevertheless developing copper recycling
processes.
The Environmental Policy does not set specific targets and the scope and time limits for targets as required by MDR-A and
MDR-T.
The Environmental Policy of KGHM Polska Miedź S.A. is made available to all stakeholders through the official website of
the Company .
[E5-2] Activities and resources related to the use of resources and circular economy
Use of resources
The Group is engaged in the mining and processing of precious natural materials. Its heart is the largest copper ore deposit
in Europe located in south-western Poland. The Group also has mines in the United States and Canada.
Mining and processing in the KGHM Group is continuous and no time horizon has been defined for them.
KGHM Polska Miedź S.A.
KGHM Polska Miedź S.A. has a fully integrated production process, in which the end product of one technological phase is
the feedstock (half-finished product) used in the next phase. Mining in KGHM Polska Miedź S.A. is performed by three
mining divisions: Lubin, Rudna and Polkowice-Sieroszowice mine divisions. In the next phase, the Ore Enrichment Plant
Division prepares concentrate for smelters and the Hydrotechnical Plant Division is responsible for storing and managing
the waste generated in the copper ore enrichment process. There are two smelting divisions within KGHM’s organisational
structure: Legnica Copper Smelter and Refinery and Głogów Copper Smelter and Refinery as well as Cedynia Wire Rod Plant.
A detailed description of the production processes can be found in Chapter 1.3.3 Description of the production process.
As part of its rational management of natural resources, the Company has developed its own copper mining systems, the
so-called chamber-pillar systems with roof deflection, dry backfill and hydraulic backfill. Different variants of chamber-pillar
systems are selected according to the thickness of the deposit and its slope. The systems and methods used to exploit the
deposit improve the efficiency of mining by reducing the proportion of waste rock in the ore and managing it underground,
and reducing the amount of mining waste.
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KGHM INTERNATIONAL LTD.
4.2.6.1.1.1.1 Carlota
The Carlota mine is located in the Western part of the Miami-Globe mining region, in the state of Arizona. Surrounding the
mine is mountainous, desert terrain.
Copper ore extraction by the Carlota mine is carried out using conventional methods typical for open-pit metals mines, i.e.
the ore is mined by blasting and then is transported by haulage trucks. The excavated material is subjected to a heap
leaching process using a sulphuric acid solution. The copper-enriched solution obtained after leaching is directed to the
extraction (SX) and electrowinning (EW) nodes to produce high-quality copper cathodes - the final product of the process.
4.2.6.1.1.1.2 Sudbury
The Sudbury Basin is located in central Ontario in Canada, approx. 400 km north of Toronto. KGHM has a number of assets
there, mining copper and nickel ore along with precious metals. Key assets include the McCreedy West underground mine,
currently operating from a collapse adit.
Mining is carried out using mining techniques that depend on the geometry of the deposit. It is mainly a mechanised
selective mining method with sublevels from bottom to top and with sublevel separation. To reduce depletion and increase
the value of the ore in areas with thin veins, conventional stockpile stockpiling of ore is also used. The total ore extracted
from the mines is processed at the Clarabelle plant in Sudbury, owned by Vale.
4.2.6.1.1.1.3 Robinson
Robinson Mine is located in White Pine County, Nevada, at an average elevation of 2,130m a.s.l. The mine comprises 3 large
pits: the currently mined Ruth, as well as Tripp-Veteran and Liberty, areas which are not currently being mined.
Mining is carried out by conventional open-pit methods and involves mining with explosives, loading and transporting the
ore to the processing plant. The ore is crushed and ground and then subjected to a flotation process. The resulting
concentrate is concentrated and filtered. The copper concentrate, with the appropriate moisture parameters, is then
transported to warehouses in the state of Nevada, from where it is shipped to its intended customers.
Waste management
The largest waste stream in the Group is mining waste, which is stored in dedicated mining waste disposal facilities.
KGHM Polska Miedź S.A.
The largest stream of mining waste of KGHM Polska Miedź S.A. comprises flotation tailings, which represent approximately
94% of the mining output, or approx. 28 million tonnes annually. This waste is created in the flotation process, in which the
main volume of waste rock extracted together with the ore is removed. This is non-hazardous and inert waste classified in
accordance with the Regulation of the Minister of Climate of 2 January 2020 on the catalogue of waste (Journal of Laws of
2020, item 10) under the code 01 03 81 - waste from the flotation enrichment of non-ferrous metal ores other than those
mentioned in 01 03 80. The tailings generated by KGHM Polska Miedź S.A. are stored at the Żelazny Most Tailings Storage
Facility.
4.2.6.1.1.1.4 Żelazny Most Tailings Storage Facility
The Tailings Plant Division in Rudna, within the structure of KGHM Polska Miedź S.A., operates in particular the Żelazny Most
Tailings Storage Facility together with the Southern Quarter. The Żelazny Most Tailings Storage Facility is located in the
Lower Silesian Voivodship (on the territory of three municipalities: Rudna, Polkowice i Grębocice), in a valley between the
Dalkowskie Hills in the upper catchment area of the Rudna River, which form a natural boundary on the west and south.
Together with the Southern Quarter, the facility covers an area of approximately 2 100 hectares.
The Żelazny Most Tailings Storage Facility together with the Southern Quarter is qualified as a project that may always have
a significant impact on the environment, listed in § 2(1)(48) of Regulation of the Council of Ministers of 10 September 2019
on projects that may have a significant impact on the environment (Journal of Laws of 2019, item 1839), i.e. category “A”
mining waste treatment facilities referred to in the Act on mining waste.
The Żelazny Most OUOW is a sublevel-superlevel facility consisting of two parts: the existing Main Facility and the new
Southern Quarter, surrounded by embankments (dams), where waste is deposited inside the canopy using the “wet”
method. The expansion of the Main Facility is carried out using the “inward” method (i.e. without the need to occupy new
land), using waste recovered from the flotation waste stream for dam superstructure and sealing the reservoir bottom. The
Southern Quarter dams are constructed using the “outward” (downstream) method.
KGHM INTERNATIONAL LTD.
KGHM INTERNATIONAL LTD.’s largest mining waste stream is the waste rock from the Robinson Mine of the Nevada Mining
Company, which is mined to access ore. Approximately 66 million tonnes of waste rock were extracted in 2024 and are
selectively stored in heaps. Currently, the fire rock is exported to the following locations: Keystone Waste Rock Disposal
Facility (WRDF), Kimbley/Wedge WRDF, Ruth East Backfill or Liberty North Backfill. Potential acid-forming material (PAG) is
processed exclusively inside the Keystone WRDF. The PAG material is placed in the centre of the WRDF and surrounded by
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at least 15 metres of Non-POTential Acid Generating (Non-PAG) material to minimise the potential for rainwater and oxygen
infiltration and generation of acidic leachate.
Another stream of mining waste generated at KGHM International is tailings from the flotation process at the Robinson
Mine. Approximately 14.4 million tonnes of tailings were generated in 2024 and are stored at the Giroux Mining Waste
Disposal Facility.
4.2.6.1.1.1.5 “Giroux” Wash Tailings Storage Facility
Waste from mining operations from the Robinson Mine, located approximately 11.3km west of Ely in White Pine County,
Nevada (USA), is deposited at the Giroux Wash Tailings Storage Facility. The facility was originally designed and permitted
as a valley reservoir up to an elevation of approximately 2079 m a.s.l. Since 2017, it has been successively raised to
approximately 2097 m a.s.l. after obtaining the relevant permits. Current plans envisage the second expansion of the dams
to an altitude of around 2116 m a.s.l. The landfill covers an area of approximately 728 ha and has the capacity to deposit
approximately 181 million tonnes of waste.
The Cycloned Main Embankment (CME) is constructed from flotation waste by separating coarse material using a battery
of hydrocyclones. It is a centreline firewall. The remaining perimeter dams are erected using the downstream method with
local material extracted from the area around the site. Before being deposited, the waste is compacted to a level of
approximately 50% (solids/water ratio) to recover the water needed for the flotation process.
Waste from metallurgical processes
The next stage of the core production line creating the second largest volume of waste is the pyrometallurgical process,
which produces approx. 1.1 million tonnes of smelter slag.
The third largest stream of waste from the Company’s activity is sludge from the Energetyka Sp. z o.o. effluents treatment
plants operating at the metallurgical facilities: approx. 70 000 t/year.
Other significant waste streams include dust and sludge from flue gas dust removal systems – up to 50,000 t/year.
The amount of waste generated in technological processes makes waste management one of the key issues associated
with copper production, with impacts that are not just environmental, but also economic, technical and organisational.
Waste recovery
Waste is generated as a side effect of almost every industrial activity. The copper industry also generates huge amounts of
post-industrial waste, since it requires multi-stage processing of ores to obtain useful final products, it also generates large
volumes of post-industrial waste.
Management of waste generated in domestic companies of KGHM Polska Miedź S.A. is carried out in accordance with the
principles set out in the Waste Act of 14 December 2012 (Journal of Laws of 2013, item 21, as amended), pursuant to which
all activities should be planned, designed and carried out in a way that prevents or minimises the volume of generated
waste. Waste, whose generation cannot be avoided, is first subject to recovery and, if that is impossible for technological,
economic or environmental reasons, it is disposed of. Waste is stored only if other means of disposal are not available.
In order to minimise the amount of waste generated, as recommended in the BAT conclusions, the production processes
carried out in the process installations have been designed and are implemented in such a way that the process residues
generated in them are managed as far as possible. The return of process residues to the production processes is an integral
part of the implemented technologies and is described in the developed and implemented process instructions.
Process residues returned to the process are an integral and valuable component of the feedstock, improving the efficiency
of the processes implemented and reducing production losses. Process residue swirls substitute in part for the raw
materials of natural origin used in the processes - metal-bearing raw materials, slag-bearing raw materials, fluxes and
others. Most of the process residues generated - slag, dust, sludge, scale, spillage, metal-saturated swages, worked anodes,
castings run-off, electrolyte refining, etc. - are managed by returning them to the process in whole or in part. Process
residues returned to production processes within a single plant, according to the assumptions of the implemented
technology, are not classified as waste, as they are in fact integral material flows occurring between individual process
nodes within the implemented technology.
The reduction of waste to landfill is achieved by managing residues from metallurgical processes in a manner consistent
with the requirements of best available techniques, in particular by:
− recovery of metals from dust and sludge generated in dust abatement systems. The dust is used, according to its
composition, as a feedstock in copper production or lead production facilities, the sludge from wet dedusting of
converter gases is sent for recovery in the lead production facility,
− recovery of copper from copper-rich slurry (recovery in electric furnaces at the Głogów Copper Smelter and Refinery),
− the transfer of de-milled slag for the production of construction aggregates,
− the transfer of de-greased granulated slag for the production of abrasive,
− the transfer of used sweepings for the production of copper concentrate,
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− the transfer of non-coppered lining to external customers for the production of refractory materials,
− total internal turnaround of all slags from converters and melting furnaces as feedstock for pyrometallurgical processes,
− the use of electrolyte withdrawn from electrorefining circuits for the production of copper sulphate and nickel sulphate,
and the use of de-copperised electrolyte for the preparation of the working electrolyte used in the production of
cathode copper,
− returning used anodes to pyrometallurgical copper production processes,
− the use of anode slime from the electrorefining process as a raw material for the production of precious metals,
− recovery of metals from sludge from the converter gas treatment plant at the lead production facility,
− selenium recovery from the recirculating water of a wet gas dedusting node in a precious metals plant,
− recovery of silver from spent electrolyte.
Activities aimed at preventing waste, reducing its quantity and its negative impact on the environment include, in particular:
− conducting production processes in accordance with the technological regime,
− the use of materials and resources of high quality standards and their rational use,
− maintaining machinery and equipment in a good state of repair, including the prevention of breakdowns and
malfunctions of equipment through constant supervision,
− monitoring the progress of ongoing processes, enabling a rapid response to be taken to prevent waste generation,
− storage of waste, taking into account its chemical composition and properties, in such a way as to protect the
environment from pollution.
The directions and methods of recovery of waste generated by the Company’s installations depend on its material
properties and environmental impact of the process.
Recovery of waste material consists of its use as a whole or in part in mining technologies as:
− construction or building material,
− material for reclamation and filling of post-mining voids,
− raw material for the production of abrasives.
The Żelazny Most Tailings Storage Facility, together with the Southern Quarter, is used for management of waste from the
flotation enrichment of copper ores with the code 01 03 81 Waste from the flotation enrichment of non-ferrous metal ores,
other than listed in 01 03 80, generated in three areas of the Ore Enrichment Plant Division in Polkowice, belonging to KGHM
Polska Miedź S.A. in Lubin. Such waste is used to build the dams of the subsequent levels and to seal the bottom of the
facility, while the remainder is disposed of in the landfilling process.
In 2024, the facility received 28 820 320.39 tonnes of code 01 03 81 waste, of which:
− 22 403 310.60 t was recovered through the R5 process (for the construction of the facility dams - 5 675 810,60 t and
sealing of its bottom - 16 727 500.00 t)
− 6 417 009.79 t was disposed of in the D5 landfill process.
Metal-bearing waste is subject to processes to recover and recycle the metals and metal compounds it contains.
The following post-processing waste produced by the Company is recovered as structural and building materials:
− shaft slag from the Legnica Copper Smelter and Refinery and poured slag from Głogów Copper Smelter and Refinery.
In 2024, aggregate production was based on: 454,202.90 thousand tonnes of poured slag, 110,226.76 thousand tonnes
of granulated slag for batching and 193,531.96 thousand tonnes of shaft slag,
− coarse-grained copper ore flotation tailings are used to build the embankments of the Żelazny Most Tailings Storage
Facility and the Southern Quarter (in 2024: (5 675 810.60);.
− fine-grained flotation tailings are used to seal the bottom of the Żelazny Most Tailings Storage Facility (in 2024: 16 727
500,00 t);
− granulated slag from the Głogów Copper Smelter and Refinery is used at the Żelazny Most TSF for the construction of
drainage layers in the waste mass and piers and embankments at the marina (in 2024: 56 616,842 t).
In some mines of KGHM Polska Miedź S.A., hydraulic backfill is used to fill mined voids (goafs). The main material used for
this purpose is sand, but also granulated slag from the Głogów Copper Smelter and Refinery (in 2024, the Rudna Mine used
nearly 5 896.62 tonnes of slag for this purpose). Also, granulated slag of the appropriate fraction after drying is an excellent
material for the production of abrasive materials used for blast cleaning of metal or concrete surfaces. In 2024, the Głogów
Copper Smelter and Refinery supplied 94 008.46 tonnes of slag for the production of abrasives.
The process of aggregate production based on the material supplied by KGHM’s smelters also permits a reduction of dust
and gas emissions that would be released during the traditional process of aggregate creation. Over the past 10 years,
KGHM Metraco S.A., a subsidiary of KGHM Polska Miedź S.A., has utilised approx. 10 million tonnes of slag, which means
that it was not necessary to obtain this amount of raw material from natural deposits, and at the same time such a huge
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waste volume did not have to be stored. The aggregate produced by the KGHM Group was used for the execution of projects
such as the construction of the S3, S5, S6 and S11 express roads.
Scrap
Copper is one of few materials that does not undergo degradation or lose its chemical or physical properties during the
recycling process.
In recent decades, there has been an increasing emphasis on sustainability, where metal recycling plays an important role.
The Circular Economy (CE) is one of the key elements in the society's transition to more sustainable modes of production
and consumption.
A high quality copper scrap processing unit was installed within the core production line of the Legnica Copper Smelter and
Refinery, which is the first stage for the Hybrid Smelter being designed in Legnica. Ultimately, it will be supplemented with
the Scrap Trading Base, where the feedstock will be prepared for remelting at the Legnica Copper Smelter and Refinery and
the Głogów Copper Smelter and Refinery. As part of the implementation of the first stage of the project, the copper scrap
processing technology with the use of a Revolving Casting-Refining (RCR) furnace was applied. Total anode copper
production at HM "Legnica" in 2024 was 143 387 thousand tonnes, of which 21 333 thousand tonnes in the WTR furnace.
In 2024, 83,400 tonnes of scrap (including 12,530 tonnes in the WTR furnace) were processed at the Legnica Copper Smelter
and Refinery, thus being recycled and not being considered waste that would require disposal by landfilling.
[E5-3] Targets related to the use of resources and circular economy
Goals related to the utilization of resources and the circular economy are set out in the Strategy of the KGHM Polska Miedź
S.A. Group to the year 2030 with an outlook to 2040. These include:
− Optimisation of mine production domestically and abroad ensuring long-term operational continuity,
− Development of metallurgy utilising efficient processing based on CE assumptions.
As part of the implementation of the CE concept, the Group aims to maximise the further use of production residues from
its own production lines in order to recover copper and associated metals from them, while limiting the harmful impact of
the Group's operations on the environment. One of the priorities of the CE is to reduce the mass of waste by using it as raw
materials.
Targets are monitored in the context of implementation of the Strategy of the KGHM Polska Miedź S.A. Group, while
progress on the implementation of the targets is published quarterly during presentation of the financial results of the
KGHM Polska Miedź S.A. Group. Information on the targets is presented more broadly in section 1.4 Strategy, plans and
objectives of the Management Board’s Report on the Activities of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A.
Group in 2024.
[E5-4] Input resources
As the KGHM Group is involved in the extraction and processing of valuable natural resources, the data presented below
refers to the processes of ore extraction, ore enrichment and smelting, resulting in the production of metals.
For KGHM Polska Miedź S.A., resource quantities were determined on the basis of production reports and purchase reports
for 2024. The quantitative data was determined by direct measurement. For units of measurement other than tonnes,
appropriate conversion factors have been applied. For technical materials, purchased auxiliary materials (broken down by
divisions: mines, concentrators, metallurgical plants and TSF) were included in this group. Wood used in mining and
metallurgical processes was included among biological materials.
In the case of the Group’s international companies, resource quantities refer to production at three mines: Robinson,
Sudbury and Carlota. Quantitative data was determined from production reports for 2024 through direct measurement.
Technical materials used in the mining process include explosives. Mines of KGHM International do not use recycled and
biological materials.
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Table 179. Input resources in the KGHM Polska Miedź S.A. Group in 2024
Item
Quantity [tonnes]
Ore mining
45,488,835
Waste rock extraction
70,520,203
Quantity of rock deposited in underground mines
5,286,453
Salt extraction
228,963
Concentrates for copper production in the KGHM Group
1,875,015
of which:
Own concentrates
1,775,782
Copper in concentrate
392,807
Silver in concentrate
1,294
Imported concentrates
123,924
Quantity of copper in imported concentrate
43,255
Quantity of silver in imported concentrate
12
Copper scrap
158,887
Copper quantity in scrap
150,406
Copper scrap %
34.49%
Technical materials
1,578,313
Biological materials
0.34%
[E5-5] Resources discharged
The Group mines and processes precious natural raw materials. The Group's main products include base metals such as
copper, silver, gold, lead, copper and molybdenum concentrates, substances such as sulphuric acid, nickel sulphate, copper
sulphate. The main products manufactured by the Group offer many application variants.
Copper
One of KGHM's main products is metallic copper in the form of cathodes and products obtained by processing cathodes.
The company processes the ore into concentrate in the first stage. The concentrate is then processed in subsequent
smelting processes into a basic copper product, i.e. copper cathodes with a minimum raw material content of 99.99% At
the next production stage, a portion of the cathodes produced (approximately 45%) is processed into the following copper
products: wire rod and wire.
Copper is one of few materials that does not undergo degradation or lose its chemical or physical properties during the
recycling process. Therefore, at the end of their life, copper products can undergo multiple recycling.
Precious metals
KGHM is one of the largest producers of metallic silver. The company produces around 1200 tonnes of this valuable metal
annually. Cathode silver with a content of more than 99.99 Ag (the so-called four nines) is produced in the form of bars
(gores) weighing 1,000 jewellery ounces (32.15 kg) and granules. This metal in the form of bars is registered under the brand
KGHM HG and has a registered certificate on the COMEX (New York Mercantile Exchange) as well as Good Delivery
certificates issued by the London Bullion Market Association. Silver is supplied in the form of grains to the jewellery and
metals industries, which produce alloys containing silver. Silver in the form of bars (ingots) is mainly purchased by financial
institutions.
Gold with a content of more than 99.95% is recovered from the gold-bearing slime produced during the electrorefining of
silver and sold as bars.
Lead
KGHM produces around 30 thousand tonnes of crude lead annually, which is produced at the Głogów Copper Smelter and
Refinery and then refined at the modern Lead Refining Plant at the Legnica Copper Smelter and Refinery, which has been
in operation since 2007. Refined lead as a marketable product has been registered on the London Metal Exchange since
2014 under the KGHM brand. The main use of refined lead is in the production of batteries and lead oxides.
Sulphuric acid
An important product resulting from the metallurgical production process is sulphuric acid. The production volume is
approximately 600 thousand tonnes per year. It is widely used in the fertiliser and chemical industries. Among other things,
it is used for the production of phosphate fertilisers, phosphoric acid and dyes, cellulose, batteries and explosives. Sulphuric
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acid is mainly sold locally to domestic and European customers, with surpluses exported to North and South America.
KGHM also has a sulphuric acid handling terminal located in Szczecin with a storage capacity of approximately 33,000
tonnes of acid.
Copper sulphate
Technical copper sulphate is a blue-coloured chemical compound that is produced at the Legnica smelter on the basis of
copper granules, and is used in the flotation of zinc ores, the production of fertilisers and other chemical compounds and
chemicals.
Nickel sulphate
Nickel sulphate produced by both the Legnica Copper Smelter and Refinery and the Głogów Copper Smelter and Refinery
is a greenish coloured chemical compound that requires further processing. Purification processes produce higher-
processed nickel compounds including plated nickel. It is used to produce nickel compounds such as nickel hydroxide,
nickel oxide, nickel sulphate hexahydrate or nickel sulphate hexahydrate, among others.
Selenium
Technical selenium containing min. 99.40 % of the selenium is produced at the Głogów smelter. After processing used in
glass, feed, pharmaceutical and cosmetic industry.
Robinson copper concentrate
Robinson copper concentrate is a product of the Robinson mine in the USA, part of the KGHM INTERNATIONAL LTD. Group,
containing about 20% of copper. Gold and silver are additionally present in the concentrate.
Robinson molybdenum concentrate
Molybdenum concentrate is another commercial product (apart from copper concentrate) produced by the Robinson mine
in the USA, part of the KGHM INTERNATIONAL LTD. Group. Production of molybdenum concentrate is derivative of the
process of copper concentrate production.
Polymetallic ore containing copper, nickel and TPM (precious metals – gold, platinum, palladium)
Ores containing copper, nickel and TPM are produced by the mines in the Sudbury Basin in Canada, part of the KGHM
INTERNATIONAL LTD. Group. The total ore extracted from the mines is processed at the Clarabelle plant in Sudbury, owned
by Vale.
By-products
The amendment to the Waste Act implemented the provisions of EU waste directives into Polish law. One of the more
significant changes was the by-product legislation.
By-products are substances or objects resulting from a production process whose original purpose is not to produce them.
Such materials, if the conditions set out in the Act are met, can be marketed and managed as by-products.
KGHM received positive decisions from the Marshal of the Lower Silesian Voivodship for recognition as a by-product:
− Pb concentrate from the Legnica smelter for the customer Głogów Copper Smelter and Refinery
− Diluted sulphuric acid from the Głogów Copper Smelter and Refinery and Legnica Copper Smelter and Refinery smelter
for the customer Concentrators
− Pb-Zn concentrate from an electric furnace at the Głogów Copper Smelter and Refinery for the customer Huta Cynku
Miasteczko Śląskie;
− Pb-Zn concentrate from an electric furnace at the Głogów Copper Smelter and Refinery for the customer Huta Budel in
the Netherlands
− Pb-Zn concentrate from an electric furnace at the Głogów Copper Smelter and Refinery for the customer Jean
Goldschmidt International, Belgium
− Slag from the electric furnace of the Głogów Copper Smelter and Refinery for the Żelazny Most Tailings Storage Facility,
Rudna Mine Division, and KGHM Metraco (for use in the production of aggregates).
Table 180. By-products transferred to recipients in 2024 at KGHM Polska Miedź S.A.
By-products
Value [tonnes]
Pb concentrate
16,988
Sulphuric acid diluted
25,403
Pb-Zn concentrate
1,722
Electric furnace slag
352,189
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The by-product concept described above, which is applied in the Group's domestic companies, results from EU and Polish
legislation. The US and Canadian regulations do not provide for such an arrangement in the management of post-
processing residues.
Waste
The Group implements the waste hierarchy, which aims to manage waste effectively and strives to reduce the waste
generated. Activities shall be planned, designed and carried out in a manner that prevents or minimises the generation of
waste. The waste generated in the Group is primarily subjected to a recovery process, and if this is not possible for
technological reasons, the waste is disposed of in accordance with environmental protection requirements. Waste that
could not be recovered is disposed of, and only waste that cannot be disposed of in any other way for technological reasons
is stored.
Information on quantitative data on waste was prepared on the basis of statements prepared by individual KGHM Group
companies based on waste records maintained in these companies. Obligations related to waste record-keeping and
reporting are carried out through the electronic register BDO (Database on Products and Packaging and Waste
Management).
Businesses that generate, transport or process waste keep electronic records in the BDO system. In BDO, companies
generate documentation related to waste management by site. Record sheets are produced for each waste code, which
contain information on waste generated, accepted, treated and transferred. Annual Reports on waste generation and waste
management are also prepared and submitted through BDO.
As defined by the ESRS standards:
− Recycling is the recovery by which waste is reprocessed into products, materials or substances that are used for their
original purpose or other purposes.
− Recovery, on the other hand, is understood as any process the principal result of which is that the waste serves a useful
purpose by replacing other materials which would otherwise have been used to fulfil a function, or by which waste is
prepared to fulfil such a function within a given facility or in the economy in general.
The key criteria for classifying a waste handling process as recycling are set out below:
− reprocessing takes place, i.e. the process involves the treatment, reprocessing of substances or materials already
extracted from the waste or waste substance/material (if the waste is homogeneous, e.g. remelting),
− the processing is final, there are no further processes to prepare the product (product/material/substance) for further
use,
− the product is a new product, material, substance,
− the finished product is the direct result of the process in question,
− the process does not apply to energy recovery and reprocessing into materials to be used as fuels or for earthworks.
Other recovery processes are any operation that meets the definition of recovery but does not meet specific recycling
requirements.
The most commonly used recovery processes at non-ferrous metal production facilities are R4 (Recycling or recovery of
metals and metal compounds) and R5 (Recycling or recovery of other inorganic materials). The scope of these processes
indicates that they include both recycling and other recovery processes.
The physical processing in the R5 process of shaft slags in aggregate production to produce a full-value product (aggregates)
meets the definition of recycling.
On the other hand, the treatment in the R4 process at copper and lead production facilities of waste gas dust and
intermediate slags to separate metals from them constitutes a different recovery process.
Another recovery process is also the use of tailings in the R5 process to form dams and seal the canopy of the Żelazny Most
Tailings Storage Facility, as recycling does not include reprocessing into materials to be used for earthworks.
The qualification of the waste treatment processes handled at the facilities into the appropriate recovery methods is
consistent with the records kept at BDO.
When calculating the total amount of non-recycled waste, waste sent for disposal and waste subjected to recovery
processes other than recycling were taken into account.
The peculiarities of the non-ferrous metal industry, including above all the relatively low metallic element content of the
ore, result in the generation of significant volumes of waste. The vast majority of industrial waste generated in the
production process undergoes recovery processes other than recycling. The largest waste stream in the KGHM Group is
represented by tailings which, as mentioned above, undergo other recovery processes. This has a major impact on the total
amount of non-recycled waste. For this reason, in addition to the indicator showing the amount of waste from its own
operations not recycled, an indicator showing the quantity and percentage of waste not disposed of (related, among other
things, to the use of tailings as a construction material at the Żelazny Most Tailings Storage Facility and the recovery of
metals in pyrometallurgical processes) has been added to the table below. The inclusion of the operations in question in
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the list below is important as it illustrates the scale of waste treatment by a process other than disposal. Other forms of
recovery than recycling should not be overlooked as they represent a key process for the copper industry to use waste as
raw materials, thus preventing it from being diverted to disposal, including landfill.
For foreign companies, in particular Robinson and Carlota mines, the waste classification system differs from the European
one. The US system is mainly based on Environmental Protection Agency (EPA) regulations and categorises waste according
to the Resource Conservation and Recovery Act (RCRA) code system. In addition, waste rock and tailings are not classified
as general waste - they are subject to special waste regulations under RCRA and are managed separately from municipal
or industrial waste streams. Information on quantitative data on waste was prepared on the basis of statements prepared
by individual international companies based on waste records maintained in these companies for the needs of internal
(state) and federal (EPA) reporting.
Table 181. Waste in the KGHM Polska Miedź S.A. Group in 2024
Item
Quantity
[tonnes]
Total waste generated (hazardous and non-hazardous waste) - total [t]
121 700 639
Total quantity of hazardous waste recovered - total [t]
68 221
of which:
− Preparation for re-use [t]
234
− Recycling [t]
16 026
− Other recovery processes [t]
51 962
Total quantity of non-hazardous waste recovered - total [t]
22 029 143
of which:
− Preparation for re-use [t]
3 471
− Recycling [t]
922 634
− Other recovery processes [t]
21 103 043
Total quantity of hazardous waste sent for disposal - total [t]
118 459
of which:
− Combustion [t]
222
− Storage [t]
118 081
− Other disposal processes [t]
155
Total quantity of non-hazardous waste sent for disposal - total [t]
99 675 866
of which:
− Combustion [t]
176
− Storage [t]
99 675 471
− Other disposal processes [t]
220
Total amount of waste not recycled [t]:
120 953 035
Total percentage value of waste not recycled [%]:
99.386
Total amount of hazardous waste generated - total [t]:
167 160
Total amount of waste not disposed of [t]:
22 097 365
Total percentage value of waste not disposed of [%]:
18.157
[E5-6] Anticipated financial effects resulting from impacts, risks and opportunities related to the use of resources
and circular economy
In accordance with ESRS 1 - Appendix C, the KGHM Polska Miedź S.A. Group omits the information set out in E5-6 in the
first year of Sustainability Reporting.
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4.3 INFORMATION ON SOCIAL ISSUES
4.3.1 [S1] Own staff resources
[S1-1] Policies related to own staff resources
Policies for managing the significant impacts, risks and opportunities associated with own workforce
KGHM Polska Miedź S.A. implements and monitors policies for managing own employee resources, focusing on identifying,
assessing and minimising significant impacts and risks, as well as exploiting opportunities related to human capital
management. The Group’s companies, acting in accordance with national law and international standards, recognises the
importance to the promotion and protection of human rights, the provision of decent working conditions and the
development of employees. Systematic risk analysis and proactive management of policies support building of a working
environment free of discrimination and unethical activities, respecting the principles of equality and diversity.
When determining policies within the KGHM Group, it is crucial to take into account the interests of different stakeholder
groups. Policies take into account interests of employees and their representatives, local communities, investors, customers
and regulators and public authorities. The Management Board is the body responsible for defining the objectives of the
policies to be adopted, enacting and supervising their implementation in the organisation.
Policies implemented in the KGHM Polska Miedź S.A. Group are made available both to those responsible for their
implementation and to potential stakeholders. The full texts of the key documents are published on the Group's website,
including in the ESG section on “Codes and Policies” (in Polish and English), allowing access to external stakeholders. As part
of internal communication, employees, in particular those responsible for implementing the provisions of the acts, are
required to familiarise themselves with the policies and internal documents and confirm this via the Intranet (employee
portal) in the dedicated "Normative Acts" section. For staff members in blue-collar positions (including in international
assets), the website is also available outside the office at: https://extranet.kghm.com/. Newly recruited persons are
introduced into the key policies during the onboarding process. For employees without an Internet access, policies are
available in a hard copy in secretariats of the companies and divisions or through those responsible for their
implementation.
The policies adopted to manage its significant impacts on its own employee resources, as well as the related significant
risks and opportunities in the KGHM Polska Miedź S.A. Group, do not exclude any group of employees, including in terms
of geographical areas. The provisions of the Code of Ethics, Human Rights Policy, Human Rights Declaration, Occupational
Health and Safety Policy also apply to stakeholders - employees in the value chain, local communities, business partners.
The key policies include:
− Code of Ethics of the KGHM Polska Miedź S.A. Group,
− Anti-Abuse Procedure in the KGHM Group,
− Human Rights Policy of KGHM Polska Miedź S.A. and KGHM Declaration on the Protection of the Human Rights,
− Occupational Health and Safety Policy,
− Collective Bargaining Agreement for Employees of KGHM Polska Miedź S.A. (ZUZP), together with the Work Regulations,
the Company Social Benefits Fund (ZFŚS).
Code of Ethics of the KGHM Polska Miedź S.A. Group
The Code of Ethics of the Group defines ethical principles applicable to all employees, promoting compliance with applicable
local laws, as well as those set by international institutions (such as the International Labour Organization (ILO) or the UN
Global Compact), industry standards and best practices. In accordance with the provisions of the Code of Ethics, the Group
is committed to conducting its operations in accordance with the UN Universal Declaration of Human Rights, creating a
culture, environment and workplace free of discrimination. No form of discrimination is tolerated, in particular due to
gender, race, age, origin, religion, disability, world view, sexual orientation, social status, marital status, political party and
trade union membership or the form of employment.
The Code of Ethics refers to three fundamental Ethical Standards: Company’s Good, Person’s Good, Stakeholder’s Good.
The Company’s Good standard covers: compliance with the law (compliance with applicable laws is maintained), zero
tolerance for corruption (zero tolerance for corruption is applied), conflict of interest (conflicts of interest are avoided),
information security (care for information security, protection of personal data), quality of products and services
(responsibility for the quality of our products and services), resource management (care for company assets, honest
management of entrusted property), environmental protection (responsibility for our impact on the environment).
The Person’s Good standard covers: safety (shared responsibility for our safety and that of the workplace), equal treatment,
human rights, diversity (a discrimination-free environment and workplace has been created at KGHM), abuse (abuse is not
tolerated at KGHM), employer-employee relations (creating high standards in employer-employee relations), teamwork
(cooperation is the basis for achieving success).
The Shareholder’s Good standard covers: shareholders and investors (the good practices of the Warsaw Stock Exchange
guide its relations with shareholders), external partners (relations with external partners are built on transparency, honesty,
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trust and professionalism), CSR - corporate social responsibility (commitment to global sustainability), participation in
national and international organisations (partnerships with numerous national and international organisations).
The Code of Ethics applies to all employees of the KGHM Group, regardless of the type of contract concluded and position
held. The Code includes information on the monitored (by the organisational unit responsible for ethics and the ethics
representative) complaint-handling mechanism, ensuring that employees have access to effective complaint reporting and
whistleblowing mechanisms supporting the protection of their rights (whistleblower platform and ethics representative).
The superior body responsible for the implementation of the Code of Ethics is the Management Board of KGHM Polska
Miedź S.A.
Anti-Abuse Procedure in the KGHM Group
The anti-abuse procedure promotes the compliance with the principles of equal treatment and respect for the dignity of
employees. It aims to prevent abuse and other forms of harassment in the workplace, in line with international standards
for the protection of workers' rights. The object of the procedure is to describe the catalogue of preventive measures aimed
at counteracting abuse, by introducing a prevention system and defining how to proceed in the event of abuse and defining
the duties and responsibilities incumbent on the Employer and Employees in this respect. The foregoing is aimed at building
and strengthening the organisational culture that fosters positive and effective relationships between employees.
The Anti-Abuse Procedure is the main document addressing the elimination of discrimination (including harassment), the
promotion of equal opportunities and other ways to enhance diversity and inclusion, while they are also addressed, among
others in the Code of Ethics, the Code of Conduct, the Human Rights Policy, the Diversity Declaration.
The Procedure applies to all employees of the KGHM Group, regardless of the type of contract concluded and position held.
The workplace manager
83
has the duty to counteract abuse by taking preventive measures to minimise the risk of abuse in
the working environment, in particular by promoting ethical attitudes and behaviour in line with the principles of social
coexistence in interpersonal relations and enforcing them on employees, disseminating knowledge about the phenomenon
of abuse, methods of preventing it and the consequences of its occurrence, providing employees with access to training on
the issue of abuse, estimating and monitoring the risk of abuse. The ultimate body responsible for the implementation of
the Code of Ethics is the Management Board of KGHM Polska Miedź S.A.
The Group does not have any separate obligations related to policies for the social inclusion of people from vulnerable
groups among its own workforce or dedicated measures for their benefit, other than the Anti-Abuse Procedure. The Group
does not apply separate procedures for implementing policies on the prevention, mitigation and follow-up of
discrimination, as well as on enhancing diversity and overall social inclusion.
Human Rights Policy in KGHM Polska Miedź S.A.
In accordance with the provisions of the adopted Human Rights Policy, in KGHM Polska Miedź S.A. we pledge to protect,
promote and implement human rights wherever we carry out our activities and towards all entities on which we have a
direct or indirect impact. The Company pledges to conduct our business in a manner consistent with the International
Charter of Human Rights, the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational
Enterprises, the UN Declaration on the Rights of Indigenous Peoples and the OECD Due Diligence Guidelines for Responsible
Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
The Human Rights Policy of KGHM Polska Miedź S.A. complies with the UN Guiding Principles on Business and Human
Rights. The Company accepts its responsibility to protect and respect human rights, committing itself to respecting them in
all aspects of its operations. It declares that it shall conduct its business in accordance with the International Charter on
Human Rights, the UN Guidelines and the OECD Guidelines for Multinational Enterprises. It also emphasises the importance
of respect for human rights by the entities it works with, treating this as an important factor in business relationships. The
company has also put in place mechanisms to report violations, which is in line with the UN recommendations on access
to remedy. The policy does not explicitly refer to the prohibition of human trafficking, but these issues are addressed in the
international instruments mentioned above. The KGHM Group’s policies are currently being adapted to the requirements
under the ESRS.
In the Policy adopted, the Company has identified and specified risks, including: KGHM Polska Miedź S.A.'s contribution to
human rights violations by entering into business relationships with contractors committing actual human rights violations,
eliminating all forms of illegal, forced or coerced labour and unauthorised child labour, in accordance with local regulations
in the context of KGHM's cooperation with external entities, the threat posed by particularly difficult working conditions for
employees of contractors, violations of principles of social coexistence and ethical standards with respect to human beings.
83
Workplace manager understood as the President of the Management Board of KGHM Polska Miedź S.A., the President of the
Management Board of companies in the KGHM Polska Miedź S.A. Group or a person holding appropriate proxy authority, and for the
Divisions of the Parent Entity – a Executive Director of KGHM Polska Miedź S.A. or a person holding appropriate proxy authority.
333
The Company declares in the policy that respect for human rights by cooperating entities is an important factor to be taken
into account when establishing mutual relationships. KGHM is driven by the principle of protecting the dignity of work,
which includes:
− care for fair pay, the right to rest and equal access to training,
− zero tolerance of all forms of violation of personal dignity and gender equality, such as discrimination, harassment,
abuse and other actions that violate the rules of social coexistence,
− combating all manifestations of modern forms of slavery, forced labour or torture,
− unconditional compliance with the prohibition on the employment of minors,
− protection of rights relating to personal dignity and the respect, promotion and protection of family and parental values.
The protection of human rights was recognised as strategically important by KGHM. To ensure that human rights are fully
protected and that the Policy is regularly updated, the Company conducts ongoing monitoring and analysis of its value
chain. In order to enable the application of appropriate remedial measures in the scope of impact on human rights, all
violations can be reported anonymously, by the company's own employees and in the value chain, through a publicly
accessible Whistleblower Platform, called "KGHM Ethics Line”.
In order to verify contractors, KGHM has implemented appropriate policies, such as the Procurement Policy, the Contracting
Policy, the Responsible Supply Chain Policy and the Anti-Corruption Policy. Special clauses in contracts or the so-called
Contractor's Charters used, in which the potential business partner declares respect for human rights in accordance with
the standards adopted at KGHM. In the event of breaches, the Company maintains a consistent dialogue with the
contractor, in line with its policy, seeking to mitigate and prevent similar situations in the future.
The Human Rights Policy has been developed in accordance with the corporate risk management methodology adopted
by the Company. It identifies and assesses the potential risks of human rights violation in KGHM's operations. At the same
time, measures have been implemented to reduce or mitigate the risks identified.
The policy has been adopted in the Parent Entity, however, it also affects employees of the Group companies and business
partners. Its text is available on the company's corporate website: KGHM human rights policy. The superior body
responsible for the implementation of the policy is the Management Board of KGHM Polska Miedź S.A. In the Canadian and
US assets of the KGHM Group, in addition to the KGHM Group Code of Ethics governing ethical and human rights issues,
including references to the prohibition of human trafficking, forced labour and child labour, the Canadian Human Rights
Code/Fighting Against Forced Labour and the Child Labour in Supply Chain Act, and in the USA - the Fair Labor Standards
Act apply.
Occupational Health and Safety Policy
KGHM Polska Miedź S.A. has a uniform Occupational Health and Safety Policy in place, in line with the high OHS standards
confirmed by the ISO 45001:2018 certificate, which apply both to own employees and to entities providing services on the
premises of the Company.
Occupational safety and health protection of employees is one of the core values in KGHM’s business, stemming from the
concern for maintaining high OSH standards and creating the friendliest working environment possible. The OSH Policy is
compliant with the adopted Strategy and the ethical principles accepted in the Company. While improving the Occupational
Health and Safety Management System - Requirements and Application Guidelines, the Company's management commits to:
− ensure safe and healthy working conditions, taking into account ergonomics, prevention of work-related injuries and
illnesses,
− improve continuously the occupational safety and health measures;
− meet the requirements of the applicable law while respecting the ethical principles applicable in the Company;
− identify, monitor and eliminate hazards and mitigate OSH risks, as well as seize opportunities in this regard;
− guarantee the participation of workers and/or their representatives in decision-making processes within the
occupational safety and health management system,
− use employee health and safety initiatives and ideas,
− foster a sense of personal responsibility among all employees for the performance of their work in a manner that is
safe and causes no hazards to health, and provide training.
All employees and other persons on the Company’s premises are required to comply with the applicable regulations,
accepted rules, and requirements. At the same time, the Company’s Management Board and executives at various levels
strive to ensure work safety for everyone at the Company’s plants. The superior body responsible for the implementation
of the policy is the Management Board of KGHM Polska Miedź S.A. In the event of changes to the laws on OEL and MAC
limit values, the Group’s companies will take reasonable steps to comply with the regulations. The Group is open to the
possibility of securing external support for H&S innovation and has capacity in selected dedicated H&S R&D centres capable
of diagnosing and adapting to change. The text of the policy is available on the company's corporate website: Integrated
Management System.
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The OHS Policy is implemented individually in Group’s companies, including international companies. All policies
(procedures) in the KGHM Group's Canadian assets comply with the Ontario Occupational Health and Safety Act (OHSA), the
Occupational Health and Safety Act (for British Columbia) and the relevant Ontario and British Columbia regulations, such as
Mining Regulations 854, Construction Project Regulation 213. In addition, injury reporting takes place in accordance with the
ICMM (International Council on Mining and Metals) Standard, which sets out international guidelines for accident and safety
reporting in the mining sector. In the USA, American mines and KGHM INTERNATIONAL LTD. Group’s companies manage
occupational health and safety through the Employee Handbook and the Mine Safety and Health Administration standards
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promoting safety in mining operations, which must comply with all policies.
Company Collective Bargaining Agreement for Employees of KGHM Polska Miedź S.A., together with the Work
Regulations and the Company Social Benefits Fund
The Collective Labour Agreement for the Employees of KGHM Polska Miedź S.A. ZUZP) was concluded on 14 March 2000.
The ZUZP defines:
− the conditions to which the content of the employment relationship should conform, in particular: working time, annual
and additional leave, remuneration rules, protection of working conditions, employment-related benefits and the rules
for granting and implementing them,
− benefits for former employees, pensioners and their family members,
− mutual obligations of the parties to the Collective Labour Agreement;
The ZUZP is concluded for the employees of the Head Office and the Divisions included in KGHM Polska Miedź S.A.
The Collective Labour Agreement does not cover:
− young workers employed for the purpose of apprenticeship or vocational training,
− workers employed abroad,
− members of the Company Management Board,
− directors, deputy directors and chief accountants of the Divisions.
The provisions of the ZUZP resulted from negotiations between the Management Board of KGHM Polska Miedź S.A. and
the trade unions active in the Company, which represent the interests of the employees. The parties, recognising the
importance of collective agreements in the legal system, sought to regulate employee rights in a way that took into account
the needs of the employees and the specific characteristics of the Company, and to create the principles of cooperation
while preserving their independence and autonomy. Negotiations were conducted with respect for the interests of both
parties.
ZUZPs are also in force in the largest Polish subsidiaries of KGHM Polska Miedź S.A. (with more than 300 employees) and
in three smaller entities: WPEC in Legnica S.A., KGHM Cuprum Sp. z o.o. - CBR and BIPROMET S.A.
The Work Regulations in KGHM Polska Miedź S.A. define the organisation and order in the work process, the rights and
obligations of both the employer and employees, in accordance with national and international standards on working
conditions and safety. These documents formulate the modalities and rules of working time accounting, granting leave and
specifying the date and method of payment of wages. Moreover, they contain detailed provisions on health and safety at
work, and describe accepted reward and recognition practices and procedures for applying penalties for breaches of work
order and discipline.
A Company Social Benefits Fund operates in KGHM Polska Miedź S.A. (hereinafter: ZFŚS). The principles and conditions for
use of services and benefits financed from the ZFŚS and the principles for the allocation of funds for particular purposes
and types of social activities are defined by the employer in the regulations, drawn up in agreement with the company trade
union organisations operating in a given Division.
The benefits of the ZFŚS cover employees and former employees - pensioners and their successors. Their family members
also use the benefits. Pensioners and retired former employees are persons eligible to use the ZFŚS resources without any
restrictions - pursuant to the Act of 4 March 1994 on the Company Social Benefits Fund.
The ZFŚS also applies to the Polish operating subsidiaries in the KGHM Group (excluding the two smallest entities: Polska
Grupa Uzdrowisk sp. z o. o. and NITROERG SERWIS sp. z o.o.). The Management Board is the superior body responsible for
the implementation of the provisions of the ZUZP, together with the Work Regulations, including the ZFŚS.
Canadian and US labour market standards and regulations also allow for collective bargaining. In Canada, they are regulated
at the federal level through the Canada Labour Code and at the provincial level (Ontario - Labour Relations Act, British
Columbia - Labour Relations Code) and constitute written agreements between trade unions and employers. They refer to
the terms and conditions of employment, such as wage and pay rises, working time and overtime, health and pension
benefits, holiday leave and redundancy conditions, protection against unfair dismissal, health and safety standards and
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safety procedures. In the entities of FNX Mining Company Inc. & KGHM Ajax the collective agreement covers Ontario
unionized employees only.
US regulations concerning collective bargaining agreements are based on the National Labor Relations Act (NLRA), which
protects workers' rights to organise and negotiate terms and conditions of employment. In Robinson Nevada Mining
Company (RNMC), a mine owned by KGHM INTERNATIONAL LTD. the collective bargaining agreement does not apply. The
company's basic labour standards are defined in the Fair Labor Standards Act (FLSA), which defines the provisions concerning
minimum wage, overtime and protection from child labour. Additional protection for employees is provided by the Family
and Medical Leave Act (FMLA), which governs the right to medical and family leave, and the Americans with Disabilities Act
(ADA), which guarantees equal opportunity and accessibility in the workplace for people with disabilities. In the State of
Nevada, the terms of wages, hours and benefits are also set out in the Nevada Revised Statutes for Compensation, Wages, and
Hours. In entities such as RNMC, the above regulations are applied through internal policies, e.g. RNMC Employee Handbook
and employee support programs.
[S1-2] Procedures of cooperation with own staff resources and staff representatives on issues of impacts
KGHM Polska Miedź S.A. provides employees with the opportunity to influence decisions and actions to manage the actual
and potential impacts on them and on the organisation. Employees can participate in decision-making processes through
their daily involvement, the exchange of experience in specialised project teams and the activities of employee
representatives. Employees' opinions are taken into account through an open organisational culture, a platform for
anonymous whistleblowing and regular consultation with staff representatives, including trade unions who negotiate
working conditions and monitor the OHS issues.
KGHM Polska Miedź S.A. and its subsidiaries do not have a formalised, uniform, general procedure for engaging their own
workforce. The aforementioned issues are regulated in the codes of conduct of these companies, the Code of Ethics of the
KGHM Group and internal policies and procedures, including the application procedures, training policies or company
collective bargaining agreements (ZUZP).
Involvement of KGHM employees in decision-making processes and impact management
The Group provides a unique opportunity for people who want to gain access to cutting-edge technology and solutions.
KGHM Polska Miedź S.A. offers the opportunity to work in project teams, giving employees the possibility to share
knowledge and experience within the company's structures. At the same time, employees also have an impact on the
company through their representatives. Workers' representatives act on behalf of the workforce, negotiating working
conditions, ensuring health and safety at work and representing the interests of workers in their contacts with the employer.
The cooperation aims to obtain opinions and conclusions on the impacts on own employees (collecting opinions, queries,
analysing them and providing answers and putting them into practice if accepted).
Employees of the KGHM Group have a possibility to anonymously report any irregularity in terms of material, actual and
potential, positive or negative impacts that affect or may affect them. The notifications are submitted via the generally
available online Whistleblower Platform. In selected KGHM Group companies, employee satisfaction surveys are also
performed in various aspects through the completion of anonymous questionnaires, in which the employee has the
opportunity to express his or her own opinion and influence change.
Examples of employee engagement
Depending on the size of the company in the KGHM Group, the personal impact of an employee and his or her
representatives on the organisation can be divided into two types: day-to-day - involving direct actions and involvement in
daily duties, and structural - involving measures at the organisational level that have a long-term impact on the company.
Table 182. Forms of employee engagement and social dialogue in the KGHM Polska Miedź S.A. Group
Dialogue with trade union
organisations, including
wage policy development
(example of INOVA sp. z
o.o.)
Trade union organisations are involved in the improvement of health and safety conditions and other
employee issues, including through the participation of employees and/or their representatives in
decision-making processes within the health and safety management system and by using employee
initiatives and ideas on health and safety.
Trade union dialogue is conducted on an ongoing basis to ensure cooperation and resolving of relevant
issues.
The key moment for the involvement of trade union organisations in the shaping of wage policy is the
determination of the average monthly wage increment indicator, resulting from the Company Collective
Agreement, which should start no later than on 1 February each year. The parties to the Collective
Agreement should conclude an agreement that takes into account the company's financial standing and
capabilities and the rate of wage increases in the national economy. In the absence of an agreement by
15 March, the rate of increase of the average wage shall be determined by the employer by 31 March by
way of an order.
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Employee development,
including the training
procedure
(example of INOVA sp. z
o.o.)
In order to ensure that employees have an impact on their own development, the company provides
tools for employees to self-report their development needs. The training procedure in place provides
for: annual diagnosis of training needs, development of annual training plans, evaluation of the training
process and results. The company aims to improve the professional qualifications of its employees by
partial funding of schools, university and postgraduate studies.
In addition, employees are provided with a possibility to self-report their development needs using the
appraisal sheet during annual appraisal interviews, as well as on an ongoing basis through supervisors
holding complete information about the employee and knowledge of competence gaps.
In KGHM Polska Miedź S.A., further employee engagement programs have been and are being implemented on a
continuous and uninterrupted basis. The following HR projects are in progress: the "Competent in the Industry" program,
the "Digital Future of Copper" program, the digitalisation of HR processes, the educational program on neurodiversity,
employee benefit psychological support, the InvestCUp development program, the "Copper Leaders" postgraduate
program, the "Giants of KGHM" Leader Academy, the adaptation program for newly hired employees, career path
management and recruitment, the succession and replacement plan. In addition, in the Head Office and in Divisions of
KGHM Polska Miedź S.A., the "Copper Heart" employee volunteer service operates, which engages in cyclical activities (e.g.
support in the organisation of the Piast Race - twice a year) and ad hoc assistance.
Table 183. Examples of projects and training that courses engaging employees in the implementation of their tasks by
enhancing expert competence:
Digitalisation of HR processes -
facilitating employee self-service in
HR and payroll
As part of the Digitalisation of HR processes, the efficiency of operations was increased by
introducing improvements aimed at speeding up and facilitating HR and social processes, as
well as enhancing the employer's image and communication with job candidates in
recruitment processes.
Leadership study - a programme to
improve management skills
In 2024, a programme was launched preceded by a pilot study responding to the needs of
lower and middle managers to improve leadership competence. Raising awareness and skills
in the context of team management is a response to the engagement survey previously
conducted in the Company. Nearly 200 people were trained in 2024.
„RÓWNI W
(NEURO)RÓŻNORODNOŚCI”
With an important emphasis on building an inclusive organisational culture, the company
continued to develop employees in the context of increasing awareness of neurodiversity. In
2024, the classroom training course "A manager in a world of neurodiversity - strategies for
effective management of neuroatypical talent" was held, attended by 162 people from the
Company's metallurgical divisions. An online webinar - 'The neurodiverse world of a child'
dedicated to all willing employees was also held.
“Competent in the Mining and
Metallurgy Industry”
Since 2018, the Company has been actively supporting education in key professions for the
region and its business. The aim of the program is the close cooperation with vocational
schools that educate future employees in areas of expertise relevant to KGHM. The program
is a response to changing trends in the labour market, including the increasing role of women
in the industry, and the Company's demand for qualified technical staff.
Almost eight thousand students have already been covered by the patronage under the
program. The project covers 10 schools from such towns as: Legnica, Bolesławiec, Lubin,
Chocianów, Polkowice, Głogów and Wschowa.
"Digital Future of Copper"
The educational project for 250 students from 8 secondary school establishments in the
Copper Basin and Lubuskie Voivodeship, coordinated by the Central Information Processing
Centre. The aim of the program is the comprehensive development of students in the area of
digital competence, integrating theory and practice through structured classes, internships,
professional visits, academic conferences and seminars. The project focuses on acquiring
practical skills and creating a platform for networking with industry professionals, supporting
the individual development of young talent.
Additional measures to influence the level of engagement of in-house employees include the implementation of projects
that educate employees in areas relevant not only in terms of their role as an employee, but as a parent, life partner, co-
worker. Caring holistically for the well-being of employees Implemented involved, among others: a series of webinars
related to mental and physical health, health-promoting educational activities and an employee benefit in the form of free
psychological consultations.
Employee engagement is also the issue related to the perception of the Company as an employer brand. KGHM undertakes
a number of activities in the area of employee branding, including through the promotion of the employer’s brand among
potential employees - graduates of technical schools from the Copper Basin.
Responsibility for the implementation and impact of engagement in the company
Responsibility for cooperation with employees in the Group rests with direct supervisors, senior managers and the
Management Board. This accountability is crucial as it affects work performance, employee engagement and the overall
atmosphere at a workplace. For information on the responsibility for issues related to dialogue with employees and their
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health and safety at the management board level, see section GOV-1 The role of administrative, management and
supervisory bodies.
The company's internal regulations specify the policies and procedures concerning the cooperation with employees.
Supervisors are obliged to comply with these regulations, which ensures consistency and transparency in the management
of teams. This ensures that employees are aware of their rights and obligations and that their opinions and needs are taken
into account when decisions are made.
Assessing the effectiveness of own employee engagement
The company has conducted employee engagement surveys for the previous three years. The results of the surveys showed
very consistent trends in identifying the level of both engagement and demotivation factors. KGHM Polska Miedź S.A.
implements projects aimed at strengthening positive areas and eliminating negative ones. Given the diagnosed trends in
the third 2023 survey, no evaluation of the 2024 engagement of own employees was conducted, while actions to improve
engagement are carried out based on the confirmed diagnosis of previous years. The topic of employee engagement
surveys is described more broadly in disclosure.
Implementation of global framework agreements
Due to the international and broad scope of its operations, cultural differences and the specific nature of the industries in
which it operates, the KGHM Group has long conducted a variety of human rights protection activities, such as:
counteracting discrimination, ensuring safety at work, ensuring respect among employees and acting with respect for
women's rights and equal pay, caring for the environment and conducting its activities with respect for the rights of
indigenous peoples - on the basis of functioning normative acts (including: the Code of Ethics and the Human Rights Policy).
Work is currently pending to ensure consistency and comprehensiveness of these activities.
The Company declares to conduct its business in a manner consistent with the International Charter of Human Rights, the
UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, the UN
Declaration on the Rights of Indigenous Peoples and the OECD Due Diligence Guidelines for Responsible Supply Chains of
Minerals from Conflict-Affected and High-Risk Areas. Respect for human rights by entities cooperating with the Company is
treated as an important factor to be taken into account when establishing mutual relationships. Any human rights violations
can be reported through the anonymous Whistleblower Platform. Despite the fact that the Group operates in accordance
with these guidelines, as at the date of the report there was no signed agreement in force with employee representatives
regarding the respect for human rights.
[S1-3] Processes for remediating the effects of negative influences and channels for raising concerns through own
staff resources
Rules for processing notifications and available reporting channels
Internal reports of violations of employee rights are dealt within the proceedings of the Ethics Committee, which operates
on the basis of the Ethics Committee Regulations individual companies of the Group. The Committees are authorised to
present the outcome of the proceedings to the Employer and, if the irregularities are confirmed, to recommend corrective
and remedial action. It is up to the Employer to decide on the extent and manner of implementation of the
recommendations issued by the committee. Corrective and/or remedial measures may include, as appropriate, redress
where it is revealed that the company has contributed to a material adverse impact on employees.
A list of channels for whistleblowing is included in the Procedure for Receiving Internal Reports of Violations of Law and
Follow-up. The procedure is available to employees of KGHM Polska Miedź S.A. via the internal system of normative acts.
In addition, the Whistleblower Platform, "KGHM Ethics Line" is made available on the corporate website of KGHM Polska
Miedź S.A., accessible to both employees and third parties, including contractors and customers, in four languages - Polish,
English, Spanish and Russian. Access to the platform is also provided from the level of the Intranet - KGHM employee portal.
The Platform enables anonymous reporting of irregularities and serves as an alternative channel for other forms of contact
defined in the Procedure – telephone lines, e-mail boxes and mailing addresses.
Procedure and methods of notification
Notifications can be submitted via the dedicated: website "KGHM Ethics Line", e-mail correspondence sent to:
antykorupcja@kghm.com or liniaetyki@kghm.com, written correspondence sent to: Department of Corporate Risk
Management and Compliance (hereinafter referred to as: ZR Department) - KGHM Polska Miedź S.A., ul. M. Skłodowskiej-
Curie 48, 59-301 Lubin, a hotline: +48 76 74 78 282 (direct contact with an employee of the ZR Department) or a recording
telephone line at +48 76 74 80 777 (contact via a recording telephone line without participation of an employee of the ZR
Department). To ensure full confidentiality, the envelope should bear the annotation: "Internal notification - personally to
the ZR". An oral notification can be made during a face to face meeting at the ZR Department. A request for such a meeting
should be submitted via the email addresses or telephone numbers provided. The meeting shall take place at a date agreed
with the person submitting the notification, no later than 14 days from the date of receipt of the request in this regard.
Whistleblowing channels have been set up to guarantee the anonymity and impartiality of each whistleblower (irrespective
of the place of employment), if necessary. from these channels can be used by employees of the Parent Company as well
as all employees of Group companies. A notification procedure has been established by KGHM Polska Miedź S.A. by
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Resolution of the Management Board of KGHM Polska Miedź S.A. of 30 October 2024 regarding acceptance for application
of the "Procedure for receiving internal notifications of violations of laws and taking follow-up actions in the KGHM Polska
Miedź S.A. Group" and applies to all subsidiaries of the Parent Company.
The Procedure for Receiving Internal Reports of Violations of Law and Follow-up, adopted in 2024 in the KGHM Group, in
accordance with the requirements of the Act on the Protection of Whistleblowers (Journal of Laws 2024, item 928), replaced
the previous internal regulation in this respect. Its purpose is to implement the requirements of the law and standards set
out in the internal legislation in the scope of creation of internal whistleblowing channels and to define the rules and
procedures for the submission of whistleblowing reports obtained in a work-related context. The procedure also aims to
define the process for clarifying reports at the follow-up stage as well as to indicate the scope of protection for
whistleblowers. In the company, units and individuals have been authorised to implement the process of handling the
reports throughout the entire life cycle of a case, starting with the receipt of the notification, its registration, qualification
and follow-up. In matters related to employee issues qualified as ethical notifications regarding breaches of the Code of
Ethics of the KGHM Polska Miedź S.A. Group, the Code of Conduct in KGHM Polska Miedź S.A., the Human Rights Policy in
KGHM Polska Miedź S.A. and the Responsible Supply Chain Policy in the KGHM Polska Miedź S.A. Group, matters are
referred for clarification within the proceedings of the Ethics Committees established in each Division and subsidiary of
KGHM.
Internal notification procedure under Resolution No. 487/XI/2024 of the Management Board of KGHM Polska Miedź S.A. of
30 October 2024 was adopted throughout the KGHM Group. It introduced the requirement that notifications should be
submitted through the designated channels and received and recorded by the authorised KGHM unit. In accordance with
the applicable Organisational Regulations of KGHM Polska Miedź S.A., responsibility for supervising the central system for
the registration and processing of internal notifications of Whistleblowers in the Group has been assigned to the ZR
Department. The availability of the aforementioned channels (KGHM Ethics Line, telephone lines, e-mail boxes) is provided
as part of the IT services rendered by the KGHM Data Processing Division.
Information on the channels is provided to employees as part of regular ethics and anti-corruption training. Information in
this respect is provided to employees by the Ethics and Anti-Corruption Representatives appointed in each Division and
Company of KGHM.
Way of monitoring the notifications and ensuring the effectiveness of reporting channels
All internal notifications, including issues of labour law violation, are recorded in the central notification register. The
notification register makes it possible to monitor a case from the moment it is registered until the follow-up activities are
completed. The register is maintained in the eSignalist application, which is also used to manage the follow-up actions
triggered by an accepted internal notification.
The application can only be eligible employees who have been authorised to perform activities in the request handling
process. The process of clarifying the notifications is monitored by the Human Resources Department, in accordance with
its responsibilities arising from the Organisational Regulations of KGHM PM SA and the Procedure for Receiving Internal
Notifications of Violations of Law and Follow-up. Information on the implementation of the notification handling process is
subject to periodic reporting.
Information on the implementation of the notification handling process is subject to periodic reporting. The statistical data
related to the notifications are collated and subject to presentation as part of the annual reporting. According to the analysis
conducted since 2018, i.e. since the adoption of the internal regulation on the acceptance of reports submitted by
Whistleblowers, KGHM has observed a constant upward trend (averaged value), which demonstrates the confidence of
employees in the implemented solutions. Employees are subject to mandatory ethics and anti-corruption training. The
knowledge they gain comprises the issue of reporting and processing of internal notifications. Information on the internal
notification procedure is also provided to candidates involved in the recruitment process via the eRecruitment application.
Cyclical audits are also carried out, e.g. SZDA internal audits (ISO37001), which verify knowledge concerning the internal
notification process.
Assessing whistleblower awareness, trust and protection in the processes of notification and resolving concerns
In accordance with the Procedure, an unconditional ban on retaliation against a whistleblower (both internal and external)
and public disclosure is in force in the Group. The terms and scope of protection result from the national regulations in
force in this respect. A person who considers that he or she has experienced retaliation has the possibility to submit a
report in this respect to the unit indicated in the procedure (ZR Department) authorised to monitor the compliance with
the obligation to protect whistleblowers in the Group.
The Group does not collect information on confidence in structures or processes as a means of raising its concerns or needs
and resolving or addressing them. Employees of the companies are required to familiarise themselves with the companies'
normative acts, undergo appropriate training and an "onboarding" process, which provides the information addressed in
this section.
Due to the IT tools implemented in the KGHM Group for handling notifications, i.e. the "KGHM Ethics Line" application
allowing for safe, including anonymous reporting, and the "eSygnalista" application for managing follow-up activities, KGHM
ensures a high standard of information security, including confidentiality and protection of personal data in the process of
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handling notifications of whistleblowers. A person submitting a notification through the online form available on the Ethics
Line platform has a possibility to monitor his or her case and to contact the persons handling the case through the
confidential account, even if he or she has chosen to make an anonymous report.
In accordance with the internal regulations, the composition of the investigation team must ensure the impartiality and
independence of the investigation, and consequently the members of the team who are related to any of the parties to the
case through, inter alia, remaining in a superior-subordinate relationship, are excluded from the case and the composition
of the team is supplemented accordingly.
[S1-4] Addressing the significant impacts on own staff resources and applying approaches to manage material risks
and opportunities related to own staff resources and the effectiveness of these actions
The KGHM Group conducts its business activities in the spirit of social responsibility. It attaches importance to the
monitoring and management of labour issues and focuses on real measures raising labour standards. Based on a risk
analysis and the identification of key opportunities, specific initiatives are implemented to influence employment conditions
and team development.
Due to the nature of their operations, KGHM Polska Miedź S.A. and key Group companies in the integrated value chain
prioritise activities to ensure safe working conditions, stable employment, work-life balance and open dialogue with
employees. The Group emphasises the importance of equal treatment and equal opportunities for all employees through,
among others, access to development, gaining professional qualifications or learning foreign languages. The Group’s
companies provide their own employees with an attractive offer of fringe benefits and additional social benefits. Caring for
the working environment, the Group has introduced clear rules for dealing with suspected violence and harassment in the
workplace, and has provided channels for reporting violations and mechanisms for taking corrective measures (more in
section [S1-3] Processes for remediating the effects of negative influences and channels for raising concerns through own
staff resources).
These issues will be included in the update of the Strategy of the KGHM Group the operationalisation of which, including
the definition of measurable objectives and the estimation of the necessary financial resources, will take place in 2025. The
Strategy stipulates key activities and objectives in three time horizons, covering both the Group's own operations and its
impact on the value chain, geographical areas and stakeholder groups. At the same time, the Strategy sets out mechanisms
for monitoring progress and reporting the effects of implemented initiatives, both in quantitative and qualitative terms.
The Company has analysed the significant impacts on its own workforce and the associated risks and opportunities. In
2024, companies of the KGHM Polska Miedź S.A. Group were taking a number of actions to mitigate significant negative
effects and enhance significant positive impacts on own employees. The Group is working to adapt its operations to meet
the disclosure requirements required by the ESRS. The targets indicated in the report do not meet all the requirements
under the MDR-A.
Risks
The materiality test identified one material risk related to working conditions, while no material corporate risk was identified
in the area of equal treatment and equal opportunities for all, in accordance with the criteria adopted.
Measures taken – ensuring stable jobs and employment security, social protection and employee benefits
The Group places great importance on ensuring stable jobs, providing a sense of employment security, which translates
into low employee turnover and no collective redundancies. Consequently, the organisation is perceived by stakeholders
as a responsible employer, offering attractive and stable employment conditions to employees.
KGHM Polska Miedź S.A. supports its employees by offering various forms of material and social assistance financed from
the Company Social Benefits Fund (ZFŚS) and additional non-wage (fringe) benefits.
The ZFŚS, within Polish Group’s companies, is intended, among other things, to subsidise holidays for children and young
people, cultural and educational activities, sports and recreational activities, and payment for children's stay in pre-school
facilities and nurseries. The ZFŚS regulations make it possible to provide non-refundable financial assistance in special life
situations, material support for Christmas, tangible assistance in the form of prepaid cards and repayable assistance for
housing purposes.
KGHM also provides financial support based on the provisions of the ZUZP, including holiday benefits, cash equivalents for
school expenses and holiday travel, as well as annual preventive and curative holidays. In addition to benefits from the
Company Social Benefits Fund, employees and their family members are able to take advantage of subscription for medical
care on preferential terms provided by the company of the "Miedziowe Centrum Zdrowia" S.A. Group.
Employees of KGHM Polska Miedź S.A. participate in the Employee Pension Scheme. The Scheme is organised in the form
of employee contributions to investment funds. The basic contribution funded by the employer amounts to 7% of the
remuneration. Employees performing work in the territory of the Republic of Poland or in the territory of another country
as part of posting by the employer are eligible to participate in the scheme if they are under 70 years of age, have been
employed for no less than 3 months and submit a duly completed declaration of participation.
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The measures taken, such as benefits from ZFŚS, ZUZP and PPE, provide employees with social support, employment
stability and a sense of security, which is linked to the Employer's expected results, such as low turnover and high employee
loyalty.
Measures taken under the ZUZP, ZFŚS and EPP are implemented on an ongoing and indefinite basis and cover all own
employees (subject to the provisions in the paragraph above).
Measures taken – extensive methods of social dialogue (emphasis on dialogue with employees), cooperation with
trade unions and works councils, functioning of collective agreements, social protection and benefits for
employees
Many trade unions that play an important role in representing the interests of employees operate in the KGHM Group. The
organisation recognises great importance of dialogue and cooperation with trade union representatives. In addition,
employee councils operate in the Polish Group’s companies, providing another channel of communication between
employees and the Management Board. The largest companies of the KGHM Group have collective bargaining agreements
in place that regulate the terms and conditions of employment, ensuring a balance between the interests of the employer
and employees (see more on ZUZP in section [S1-1] Policies related to own staff resources).
In 2021-2023, an engagement survey was conducted among KGHM Polska Miedź S.A. employees. In cooperation with
researchers from the University of Warsaw, a qualitative survey was conducted at the first stage among a representative
group of employees to diagnose engagement factors in KGHM. At the next stage, a quantitative survey was carried out to
determine the level of employee engagement. Based on the findings, areas with a positive impact on engagement and
areas for improvement were defined. Based on an earlier diagnosis resulting from a three-year survey, activities were
continued in 2024 to address the reported areas requiring support, including the development of managerial competence
and psychological support for employees and family members. The interruption in the cyclical engagement surveys
conducted among employees of KGHM Polska Miedź S.A. is dictated by the lack of significant new factors affecting the
working environment and the time needed to introduce noticeable changes in the organisation. At present, it has not been
decided whether and to what extent this type of survey will be carried out.
Dialogue with employees is also conducted in the area of planning employee training. The construction of training plans
and the associated budget is carried out using an online tool, where - through managers - the development needs of
employees are reported, taking into account personal and organisational needs. Planning of the training takes place in the
context of complementing the professional qualifications and competence of the workforce to meet the needs of the
organisation, also in relation to the broader competences of the future.
Measures taken – support for employees and work-life balance
Companies of the KGHM Polska Miedź S.A. Group implemented remote and hybrid working options where feasible and in
compliance with operational requirements, bearing in mind the work-life balance of employees. KGHM Polska Miedź S.A.,
as a production enterprise operating in a continuous work system, does not have a possibility to apply flexible working
hours to all of its activities. Obviously, the possibilities offered by the existing legislation to create a working environment
that promotes the integration of work and family life and makes working hours more flexible (e.g. occasional remote
working, the possibility to start work at preferred, convenient times for the employee) are currently applied. In addition,
the companies carry out a number of initiatives that support the personal lives of employees (educational campaigns for
fathers, the “Wonderful Parents” program, benefits for employees, e.g. subsidies for school starter kits, refinancing holidays
for employees' children).
Measures taken – comprehensive programs to support employees’ physical and mental health
Group companies carry out a range of activities related to supporting the physical and mental health of their employees.
Health promotion programs are implemented on several levels:
− Provision of healthcare. KGHM Polska Miedź S.A. provides employees with access to subscription medical care at the
"Miedziowe Centrum Zdrowia" S.A., including specialist consultations and laboratory tests. Three-week rehabilitation
holidays are also organised for employees in need. The Company supports research and diagnostic programs ,
promotes blood donation and finances the modernisation of medical facilities, including those outside the KGHM
Group. In addition, prevention and health trips for children and young people, rehabilitation and sports activities and
monitoring examinations are funded.
− Employees of KGHM Polska Miedź S.A. in 2024 were able to benefit from the employee benefit Mental Care -
psychological care. 660 people benefited from the program.
− Promotion of physical and mental health. KGHM Polska Miedź S.A. actively supports sport and health-oriented initiatives.
In 2024, KGHM Polska Miedź S.A. co-organised sporting events such as the Cross Straceńców, the Mine Lamp Run and
the St. Barbara's Run. Employees and their families were given the opportunity to participate in the KGHM Running
Academy and free skiing lessons for children. In addition, sports communities are developed on the Intranet, employee
initiatives related to cycling and running are being supported and health-oriented activities, including blood donation,
are promoted.
− Health education. In 2024, KGHM Polska Miedź S.A. conducted educational campaigns on preventive health care,
including prostate examinations, hydration, breast self-examination and autism-related issues. Physical and mental
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health webinars were organised, available to all employees, and educational material was made available on the
intranet. Internal communication channels promoted employees' sporting achievements, competitions were organised
and guides to physical activity, such as mountain hiking, were published.
Measures taken – possibilities to develop skills/competences
The KGHM Group pursues a consistent policy of developing the competence of its employees. Detailed information on
training and skills development metrics can be found in section [S1-13] Training and skills development metrics which
shows the percentage of employees participating in regular performance reviews and career development (by gender) and
the average number of training hours per employee in the Group.
Examples of development programs that support employees’ career development and their commitment to the work
performed:
− Leadership Studies. In 2024, the program initiated by a pilot project dedicated to managers from the Head Office and
Divisions of KGHM Polska Miedź S.A. was continued. Development of key leadership competence has a direct impact
on employee effectiveness, translates into organisational climate and business results of the Company.
− “EQUAL IN (NEURO)DIVERSITY” - the company continued to develop employees in the context of increasing awareness
of neurodiversity, placing essential emphasis on building an inclusive organisational culture. In 2024, the classroom
training course "A manager in a world of neurodiversity - strategies for effective management of neuroatypical talent"
was held, attended by 162 people from the Company's metallurgical divisions. An online webinar - 'The neurodiverse
world of a child' dedicated to all willing employees was also held..
Measures taken - dissatisfaction with overtime and shift work, work-related stress and the impact on employees'
private lives, lack of adequate consideration of employees' opinions and needs
In view of the difficult working conditions (e.g. work in the mining plant operation) and taking into account the results of
the employee engagement survey, the Company launched the benefit for employees: "Psychological support for KGHM
Polska Miedź S.A. employees" Psychological support is a benefit dedicated to all employees of KGHM Polska Miedź S.A. and
their relatives, and includes: psychological assistance in the form of one-to-one sessions, couples' and family therapy,
parenting consultations and supervision for managers. In 2024, 660 people benefited from the program. The company will
in future carry out an analysis to track and evaluate the effectiveness of the measures described above.
The companies of the KGHM Group conduct a number of cyclical pro-health activities covering both physical and mental
health - as part of pro-health activities in 2024 educational campaigns were conducted via Intranet, employee initiatives
related to health promotion were supported through subsidies and promotion (the "ZG Run" group of runners, cyclists,
etc.). The company organised the “Pink October” and “Movember” campaigns, blood collections in cooperation with the
RCKiK in Wrocław, regional sports events (e.g. Bieg Piastów, Kolej na Bieg, KGHM Cup) and offered financial support to
sports clubs. Another initiative that deserves highlighting is the CARE SOLUTIONS educational project. As part of the project
webinars on employee mental and physical health were provided. Training dedicated to KGHM employees of all divisions
and their families with no limit of recipients. Seven 60-minute webinars were offered with a possibility of replaying them
subsequently on the YouTube channel.
Measures taken – fatal and/or serious accidents at a workplace, occupational diseases
Occupational diseases in the mining and metallurgical industry pose a serious threat to the health of workers, due to the
specific working conditions and exposure to a variety of harmful factors. For many years, KGHM Polska Miedź S.A. has been
pursuing the long-term vision of "Safe human among the elements - Zero accidents due to personal and technical causes,
zero occupational diseases among our employees and contractors". The Company has high occupational safety and health
standards confirmed by a ISO 45001:2018 certificate
85
that apply equally to its employees and the employees of other
service providers operating on the premises of KGHM Polska Miedź S.A.
All work stations have identified threats. The Company has assessed the professional risk and updates it on an ongoing
basis. All employees are introduced to the risk assessment for their workplaces. Working environments are continually
monitored and periodic reviews and potential threat assessments are conducted, as well as reviews of equipment and
required technical checks and approvals. Employees undergo systematic training and continually enhance their
qualifications. The company has procedures in place for identifying incidents and mitigating hazardous situations. The
company promptly implements new legal requirements and regulations in the area of occupational health and safety. It
also actively participates in the work of agendas of various entities with the aim of development of best available practices
and behaviours in the area of occupational health and safety in the mining and processing industry.
A current assessment of occupational safety condition is performed at weekly meetings of the Vice President of the
Management Board (Production) and at monthly meetings of the Management Board with the management of all the
Divisions. The company also organises regular meetings with the mining supervisory authorities and representatives of the
85
Certified OHS Management Systems based on ISO 45001 are also held by KGHM Group companies: Pebeka S.A., KGHM ZANAM S.A., INOVA
sp. z o.o., KGHM METRACO S.A. and WPEC w Legnicy S.A.
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National Labour Inspectorate, which are attended by social labour inspectors representing employees from individual
Divisions. At least once a year, work safety issues are presented to the Occupational Safety Council in KGHM Polska Miedź
S.A., established in the Company. The Council is comprised of representatives of the Company's top management with the
Social party, i.e. the trade unions active in KGHM Polska Miedź S.A. and the Company Social Labour Inspectors in the
divisions of KGHM Polska Miedź S.A.
Measures taken – gender pay gap
One of the main priorities of KGHM Polska Miedź S.A. is to create a working environment free of all forms of discrimination.
The policies adopted, among others, the Code of Ethics of the KGHM Polska Miedź S.A. Group, as well as day-to-day
management, apply high standards which result in employees being assessed on the basis of their performance and not
on the basis of, for example, gender, age, nationality or ethnic origin. The Company monitors the gender pay gap by
analysing the pay gap between men and women and the reasons of the differences that have occurred. It is crucial to apply
clear and accessible remuneration criteria .
Measures taken – discrimination against people with disabilities at a workplace
The Group has not identified any discriminatory practices against people with disabilities in the workplace. However, due
to the scale of operations and the KGHM Group's role as one of the key employers in the region, it was recognised significant
to present an approach to the identified potential negative impact of discrimination.
The percentage of people with disabilities employed in the KGHM Group is low and amounts to 1.65%. The low
representation of this group of employees results from the specific nature of work in the mining and processing industry
and legal restrictions (in particular, mining and geological law and OSH regulations) on the employment of people with
disabilities in positions in the core business. Nevertheless, this topic receives particular attention in the context of respecting
human rights and ensuring equal opportunities in the labour market. The Company conducts analyses in this area in order
to increase the employment of people with disabilities in those positions that are accessible to this group of potential
employees.
Measures taken – inadequate prevention of workplace mobbing and violence and their psychological effects on
employees, situations of workplace discrimination and abuse
Incidents of discrimination and abuse can have serious psychological consequences for employees, which emphasises the
need for effective prevention and a rapid response in this area. The KGHM Polska Miedź S.A. Group, due to the large scale
of its workforce, recognises the permanent need for preventive action in the area of abuse and violence in the workplace.
Discrimination and abuse issues are monitored by the Whistleblower Platform - which is available to the company's own
employees, workers in the value chain and communities affected by the company operations - and the Ethics Committee,
and in addition, Polkowice-Sieroszowice mine has established a team of mediators to support employees in conflict
situations. The Anti-Abuse Procedure commits the management boards of the companies in the Group to promote ethical
attitudes and behaviours in line with the principles of social coexistence and to enforce them in interpersonal relations, to
disseminate knowledge about the problem of abuse, methods of preventing it and the consequences of its occurrence, to
provide employees with access to training on issues related to abuse, and to estimate and monitor the risk of its occurrence.
For a more extensive commentary on the Procedure for Accepting Internal Reports of Violations of Law and Follow-up, see
disclosure section [S1-3] Processes for remediating the effects of negative influences and channels for raising concerns
through own staff resources.
When analysing the employment structure in the KGHM Polska Miedź S.A. Group, it should be noted that, besides the
production area, the representation of both genders is very similar. However, a significant percentage of the Company's
workforce is its technical staff, and there are serious problems related to recruiting women into positions in this area - the
proportion of girls and young women who are educated in STEM subjects is still low. This means that there are no female
employees with the required technical qualifications on the labour market who could be employed by the Company. In
addition - occupational health and safety regulations exclude a number of jobs that can be performed by women in mining
or smelting operations and prevent increasing the representation of women in technical positions.
Measures taken – low representation of vulnerable groups at risk of exclusion
− “Competent in the Mining and Metallurgy Industry. KGHM - a key partner in vocational training.”
As part of the KGHM Polska Miedź S.A. Program, since 2018 KGHM Polska Miedź S.A. has been supporting education in
the professions most relevant to the region, as well as those of key importance to the Company. Patronage classes are
attended by both boys and girls. In 2024, the Company employed 200 graduates covered by the Program. As part of
the program, promotional campaigns are undertaken addressed to girls to present career opportunities in technical
professions related to the mining and metallurgical industry.
− Advisory team for employment of women in underground positions
In addition to the previously mentioned activities, the KGHM Group responds to the needs of employees on an ongoing
basis, respecting the right to equal treatment in the workplace. An advisory team for employment of women in
underground positions was established in 2024, with representatives from Head Office (HR) and the Mining Divisions
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(HR, chief engineers, etc.). The team's work will result in a list of underground positions that, taking into account the
strict provisions of occupational health and safety regulations, can be occupied by women (report: Q2 2025).
− Team of in-house mediators
A team of internal mediators - the additional channel to monitor, report and respond to conflict situations in the
workplace - has been established at the Polkowice-Sieroszowice mine.
− Follow-up and replacement plan
In 2023, the KGHM Group established a project team for the creation and formal implementation of the succession and
replacement plans for KGHM Polska Miedź S.A. The rules for the creation and operation of the succession and
replacement plan for key positions covered all Divisions of the Company. This document will be reviewed and updated
in 2025. The aim of the procedure is to review key competences from the point of view of maintaining production
continuity and strategic processes. By setting out objective criteria related to promotion/replacement in job positions,
the succession and replacement plan will allow for transparent, competence-based staffing decisions to counteract
stereotypes about women in technical positions. The Succession and Replacement Plan in place is designed to diagnose
the key competence areas required for the continuity of the Company's operations and to identify the development
needs of employees, which are supplemented by the training budget. The plan supports the development of staff
through the improvement of competence and skills and the acquisition of necessary qualifications, which contributes
to strengthening the organisation's potential.
− "Equal in (neuro)diversity"
In addition to women, neuroatypical people represent another social group that may be excluded from the labour
market. In 2024, the KGHM Group continued the "EQUAL IN (NEURO)DIVERSITY" program. This project was aimed at
building awareness of the challenges related to neurodiversity. The training was dedicated to the management teams
of the Smelter Divisions of KGHM Polska Miedź S.A. In addition, a webinar on "The neurodiverse world of a child" was
held, available to all employees of KGHM Polska Miedź S.A.
Time perspective of implemented initiatives
The policies and regulations introduced for application in the KGHM Polska Miedź S.A. Group are in force indefinitely and
act as a determinant of activities aimed at ensuring an attractive and safe working environment. Activities are implemented
on an ongoing basis. Following the adoption of the Company's business strategy update, schedules for specific human
capital management initiatives, objectives and activities will be developed as part of the process of operationalising the key
strategic directions.
Preventing and mitigating the negative impact of business practices on employee resources
A number of regulations have been implemented in the KGHM Polska Miedź S.A. Group to mitigate the negative impact on
its own employee resources and to ensure compliance with ethical and human rights protection principles. Key documents
include the Procurement Policy, the Contracting Policy, the Responsible Supply Chain Policy and the Anti-Corruption Policy
and the Code of Ethics including the Codes of Conduct, which further support the elimination of the risk of conflict of
interest.
The Company places great emphasis on building employee awareness in these areas through e-learning courses,
publication of policies and communication on the KGHM Portal (Intranet). In addition, the KGHM Polska Miedź S.A. Group
has Regulations of the Ethics Committee in place and the Whistleblower Platform to monitor and respond to cases of
harassment, mistreatment and other irregularities in the workplace.
Strategy of the KGHM Polska Miedź S.A. Group
Due to the ongoing work on updating the business strategy of the KGHM Polska Miedź S.A. Group in 2024, followed by its
operationalisation and measurement, it is not possible for the Company to provide the full, reliable information required
by the following disclosures regarding its own workforce:
− Disclosure of the nature of current and future financial and other resources allocated to the action plan (Capex and
Opex)
− Explaining the link between current financial resources and key amounts presented in the financial statements
− Disclosure of information on whether and how action has been taken to provide or enable redress in relation to the
actual material impact
− Description of the manner of tracking and evaluation of the effectiveness of activities and initiatives in achieving
outcomes for own workforce
− Disclosure of resources allocated for the management of significant impacts
− Information on measures taken to mitigate the negative impact of the transition to a greener and climate-neutral
economy for employees
Measures taken – a possibility of securing external support for OHS innovation, high capacity of the Group and selected
dedicated OHS R&D centres capable of diagnosing and adapting to change.
The Group identifies significant opportunities related to the management of its own staff resources, which can contribute
to optimising operating costs and increasing organisational efficiency. In particular, the Group perceives an opportunity to
use external financial support for innovation in the area of health and safety, which can improve safety standards and
344
process efficiency. Moreover, an increased commitment to raising public funds for the Group's transformation may be an
important part of the strategy to optimise operating costs.
The Group also recognises the key role of cooperation with specialised research and development (R&D) centres in the field
of health and safety. A long-term plan to work with reference bodies can allow the organisation to adapt more effectively
to regulatory and technological changes, while potentially improving safety at work.
The KGHM Group identifies the potential to implement long-term succession and career adaptation programs as a key
opportunity in the area of human resources management. Building an effective and inclusive organisational culture that
supports the development of employee competences and the implementation of programs targeting new strategic skills
are important elements in strengthening the Group's human capital.
In the context of managing significant opportunities related to employee resources, the Company plans to operationalise
these initiatives as part of the Group's corporate strategy update. This process involves the allocation of appropriate
resources and the implementation of dedicated measures aimed at optimising operational costs by better matching
competences to the current and future needs of the organisation.
Detailed action plans and the resources allocated to implement these initiatives will be defined in the next stages of
implementation of the Group's strategy, in line with the ESRS 2 MDR-A requirements for managing significant opportunities
in the area of sustainable development.
[S1-5] Goals related to managing significant negative impacts, enhancing positive impacts and managing significant
risks and opportunities
Workforce management is the key element of any organisation's strategy, and in the case of KGHM this is of particular
importance. The goals set in this area focus on identifying and managing the significant impacts, risks and opportunities
associated with the workforce. The Group’s companies continuously undertake measures aimed to reduce negative impacts
on the workforce by:
− Implementing health and prevention programs to reduce sickness absence and improve the overall health status of
KGHM Polska Miedź S.A. employees.
− Providing regular occupational health and safety training to minimise accidents at work.
− In addition to their motivational function, extensive access to employee benefits and social care has a significant impact
on the health and well-being of employees.
− Increasing positive impacts on the workforce:
− Providing training and development programs, including subsidised studies, to support the ongoing professional
development of employees.
− Organising integration events and building community at the workplace to increase employee satisfaction and
engagement.
− Management of material risks and significant opportunities:
− Implementation of talent and career management programs, including succession plans, to ensure continuity and
growth of the organisation.
− Monitoring of remuneration indicators, including the wage gap, to ensure wage equity and equal opportunities.
The objectives outlined above do not meet all the requirements of the ESRS. The Group is working on alignment of its
activities to bring its reporting processes in line with MDR-A, MDR-T and MDR-M requirements in future reporting periods.
[S1-6] Characteristics of the entity’s employees
Employees of the KGHM Group constitute a group of key stakeholders and are the Company's most valuable asset. The
Company provides work based on respect for diversity and competence, as employees play a significant role in the
development of all areas of the business model. The KGHM's development is supported by the specialised and expert
knowledge of its employees in individual fields. The Group employs people with the highest potential who jointly build the
success of the entire organisation. The KGHM Group exercises due diligence in human capital management processes,
adhering to both Polish law, the EU law and the international law in respect of international companies.
Table 184. Total number of employees broken down by gender in the KGHM Polska Miedź S.A. Group
Item
Number of employees (headcount)
86
Men
Women
Total
KGHM Polska Miedź S.A. Group
28,799
6,229
35,028
86
Number of employees (headcount) as at the last day of the year, excluding members of the Management Board employed under civil
law contracts - Contracts for the provision of management services
345
The vast majority of the employees of the KGHM Polska Miedź S.A. Group are employed in Poland - 31,884 people, which
represents 91% of the total employment level.
In 2024, the total number of employees in the KGHM Polska Miedź S.A. Group amounted to 35,028, while the average
headcount ratio amounted to 35,028.
Table 185. Total number of employees broken down by type of employment (full-time or part-time) and by gender in the
KGHM Polska Miedź S.A. Group
Item
Number of employees (headcount)
87
full-time
part-time
men
women
men
women
KGHM Polska Miedź S.A. Group
28,755
6,142
44
87
Total
34,897
131
Table 186. Total number of employee resignations broken down by gender in the KGHM Polska Miedź S.A.
2024
Number of employees
(headcount)
88
Number of resignations
of employees.
Turnover ratio*
men
28,799
2,443
8.5%
women
6,229
522
8.4%
Total
35,028
2,967
8.5%
*The turnover ratio is calculated as the number of employee departures divided by the total number of employees and then multiplied by 100 to
obtain a percentage. The figure includes employees who changed employment within the KGHM Group companies.
Table 187. Number of permanent and temporary employees, total and broken down by gender, in the KGHM Polska
Miedź S.A. Group (S1-6 point 50b)
2024
Number of permanent employees
Number of temporary employees
men
women
men
women
KGHM Polska Miedź S.A. Group
25,611
5,477
3,188
752
Total:
35,028
[S1-7] Characteristics of non-employees forming the entity's own staff resources
In accordance with Appendix C of ESRS 1, the KGHM Polska Miedź S.A. Group uses the option to omit reporting of all data
points included in this disclosure requirement in the first year of preparing the sustainability statement.
[S1-8] Scope of collective bargaining and social dialogue
The KGHM Polska Miedź S.A. Group fully respects the rights of employees to associate in employee organisations and trade
unions as well as to conduct collective bargaining both within and outside the EEA.
In 2024, 31,418 employees (89.7%) in the KGHM Polska Miedź S.A. Capital Group were covered by collective bargaining
agreements. The percentage of employees covered by collective agreements in the EEA area is 94.3%. The collective
bargaining agreements are in force in the largest companies of the KGHM Polska Miedź S.A. Group.
With few exceptions, trade unions operate in the Group's companies. In 2024, the companies held discussions with the
trade unions on wage issues, bonus rules, employment and working conditions and social issues as well as the amount of
the contribution for the Employee Pension Scheme.
In the international companies of the KGHM INTERNATIONAL LTD. Group, the interests of the employees of FNX Mining
Company Inc. are represented by the trade union of United Steelworkers Local 2020, which associates employees of this
company in the Sudbury Basin in Canada.
87
Number of employees (headcount) as at the last day of the year, excluding members of the Management Board employed under civil
law contracts - Contracts for the provision of management services
88
Number of employees (headcount) as at the last day of the year, excluding members of the Management Board employed under civil
law contracts - Contracts for the provision of management services
346
In DMC-brand companies, only the employees of the company operating in Chile (DMC Mining Services Chile SpA) are
represented by trade unions. The company maintains good relations with the trade unions and adheres to the provisions
of the collective agreements concluded.
In 2024, 1340 employees were covered by collective agreements in the KGHM Polska Miedź S.A. Group’s international
companies, with a unionization rate of 55% of employees at FNX Mining Company Inc. and 93.22% of Chilean employees at
DMC.
The Group’s employee representatives are elected in elections held in all subsidiaries, both domestic and foreign. As a
result, all the group's employees are included in the representation, ensuring a 100% representation rate.
[S1-9] Diversity metrics
In accordance with ESRS requirements, the KGHM Polska Miedź S.A. Group has presented information on the gender
structure of top management, using a definition that comprises positions at the first and second level below administrative
and supervisory bodies.
Table 188. Gender distribution by number and percentage in the top management in the KGHM Polska Miedź S.A. Group.
2024
Group
Position category
gender
number
percentage
Management Board
men
48
90.6%
women
5
9.4%
Senior management
men
163
72.4%
women
62
27.6%
Management staff
men
1 116
68.2%
women
521
31.8%
Table 189. Age structure of employees in the KGHM Polska Miedź S.A. Group.
2024
Group
Age group
number
percentage
<30
30-50
>50
4,413
22,593
8,022
12.6%
64.5%
22.9%
[S1-10] Adequate wage
All employees of the KGHM Polska Miedź S.A. Group receive adequate remuneration as defined by the ESRS S1-10 standard,
which means that there are no cases of remuneration below the minimum wage in force in each of the countries where
the Group operates.
[S1-11] Social protection
The Group has both social protection systems in place in accordance with the Labour Code and within the framework of
public programs , as well as additional social programs in selected KGHM Group’s Companies to protect employees against
loss of income due to serious life events.
Employees working in the Group's domestic and international companies under an employment contract are covered by
social protection against the loss of income due to illness, unemployment, accident at work, parental leave and retirement,
in accordance with the applicable regulations arising from the Labour Code and international labour and social protection
legislation.
Moreover, selected Group companies offer additional social programs such as group life insurance, subscription health
care, an employee pension scheme and benefits from the company social benefits fund.
Table 190. Basic social protection regulations and tools in countries of the KGHM Group’s operation
Country
Basic social protection provisions and tools
Poland
− Labour Code (pension, disability, sickness, accident insurance) mostly)
− Company Social Benefits Fund - operates in most domestic companies (provides a range of benefits that act as
non-wage employee motivation factors, providing non-refundable financial assistance in special life situations,
material support during holidays, material assistance in the form of prepaid cards and refundable housing
assistance)
− Company Collective Labour Agreement operates in a part of domestic companies (holiday benefits, cash
equivalents for school expenses and holiday travel, as well as annual preventive and curative holidays).
− Employee Pension Scheme (in the form of employee contributions to investment funds).
Chile
− FONASA (public health system)
− ISAPRE (private health system)
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[S1-12] People with disabilities
The KGHM Polska Miedź S.A. Group creates an accessible and supportive working environment for people with disabilities
by adapting the infrastructure and IT systems to their needs and by using modern technology to facilitate their daily work.
The company ensures equality in employment by offering equal opportunities for professional development where this
work is feasible. Through training and education, KGHM is raising awareness and acceptance of diversity.
In the Group's domestic companies, the percentage of own employees with disabilities as at 31 December 2024 amounted
to 1.65% of employees.
In the international companies of the KGHM Polska Miedź S.A. Group, the confidentiality of information on the disability of
employees is regulated by a number of various legal acts. In addition, employees are not required to share information
concerning their disability unless it affects the performance of their obligations. Accordingly, it is not possible to provide
the percentage of persons with disabilities in international companies.
[S1-13] Training and skills development metrics
Employees of the KGHM Polska Miedź S.A. Group are provided with training and skills development in the context of
continuous professional development in order to enhance employees' skills and facilitate their continuous ability to be
employed.
Employees are assessed on an ongoing basis in terms of their performance, which results from the bonus regulations of
the Head Office and the Divisions. The Management Board and the top management staff are subject to assessment in
terms of performance of the management goals.
The KGHM Polska Miedź S.A. Group does not have uniform principles in place for Periodic Employee Appraisal; individual
Group companies have their own internal regulations in this respect. In 2024, the percentage of men in the KGHM Polska
Miedź S.A. Group who participated in regular reviews of performance and career development was 14.9%, while the
percentage of women was 35.7% (the total percentage of persons evaluated was 18.6%).
Table 191. S1-13 - Average number of training hours by gender [2024]
Training programs in the KGHM Group are tailored to the organisation's business objectives. The basis for the planning of
training and the calculation of the necessary resources is the periodically collected information on the development needs
of employees.
The KGHM Polska Miedź S.A. Group does not have a defined common Training Policy. Due to the international scope of
activities, cultural differences and the specific nature of the industries in which the KGHM Polska Miedź S.A. Group operates,
each of the companies conducts a number of activities related to employee training, adapted to the profile of activity.
In 2024, development activities in the KGHM Group focused on maintaining and improving human capital and effective
management of intellectual capital.
89
Data for the Group does not include KGHM INTERNATIONAL LTD, Uzdrowisko Świeradów-Czerniawa Sp. z o.o. - PGU Group and
Walcownia Metali Nieżelaznych "ŁABĘDY S.A." - the companies do not keep statistics according to such criteria
− AFP scheme (pension scheme),
− Act 16.744 (accident insurance, occupational diseases)
USA
− Social Security Act, Federal Unemployment Tax Act (benefit schemes, unemployment insurance)
− Arizona: Workers' Compensation Law (workers' compensation), Fair Wages and Healthy Families Act (minimum
wage and workers' rights to paid sick leave), Earned Paid Sick Time (sick leave)
− Nevada: NRS Chapter 612 - Unemployment Compensation, Employer Handbook (internal document containing,
among others, information on unemployment benefits)
− Utah: Utah Employment Security Act (unemployment insurance), Internal Revenue Service (regulates pension
plans)
Canada
− Bill 148 - a plan for fair Workplaces and Better Jobs (paid leave for emergencies),
− Employment Standards Act, 2000 (sick and parental leave),
− Employment Insurance Maternity and Parental Benefits (maternity and parental benefits)
Item
Average number of hours
89
Average per employee
21
Men
23
Women
11
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[S1-14] Occupational health and safety metrics
In the first year of sustainability reporting, the KGHM Polska Miedź S.A. Group uses the option to omit publication of the
rate of reportable work-related accidents and in respect of non-employees, in accordance with Appendix C of ESRS 1.
Table 192. Basic occupational health and safety metrics
Description of indicator
Indicator
Item
Percentage of employees covered by the occupational health and safety management system
S1-14 point 88 a
99.9%
Number of fatalities due to work-related injuries and work-related ill health
S1-14 point 88b
5
Number of reportable work-related accidents
S1-14 point 88c
362
Number of cases of reportable work-related ill health, subject to legal restrictions on data
collection
S1-14 point 88d
38
Number of days lost due to work-related injuries and fatalities due to work-related accidents, due
to work-related ill-health and fatalities due to ill-health
S1-14 point 88e
20,635
* based on legal requirements or recognised standards or guidelines
The number of days covers the full period in the reporting year. The indicators have not been validated by any external body other than the assurance
provider.
[S1-15] Work and life balance metrics
In the KGHM Polska Miedź S.A. Group, all employees, with the exception indicated in the second paragraph, are entitled to
family leave. As defined by the ESRS, these include leave and benefits such as maternity leave, paternity leave, parental
leave, carer's leave, including included parental leave, leave related to caring for a child under 14 years of age for 16 hours
or 2 days, and childcare allowance and family care allowance.
The only reservation in this respect is the situation in US-based companies, where, under the Family and Medical Leave Act
(FMLA), the right to take unpaid leave for specific family or medical reasons, protected from dismissal, is acquired after
working for 12 months and a minimum of 1,250 hours. In addition, US-based companies have introduced an in-house Paid
Parental Leave program to support employees in the period following the birth of a child or adoption. Employees become
eligible to benefit from this scheme after working for the company for six months.
Statistics on the percentage of employees using these rights, including a breakdown by gender, are shown in the table
below.
Table 193. Work and life balance metrics
Percentage of employees authorised to take leave for family reasons
99.8%
Percentage of eligible employees who took leave for family reasons, including:
33.5%
− men
32.0%
− women
40.6%
[S1-16] Remuneration metrics (pay gap and total remuneration)
As part of the activities of KGHM Polska Miedź S.A., an important aspect of human resources management is the monitoring
and reporting of wage indicators, including the pay gap and total remuneration.
Pay gap
The gender pay gap is described as the difference in the average wage level between female and male workers. The Gender
Pay Gap indicator - GPG - is used to calculate the difference.
Table 194. Pay gap, KGHM Polska Miedź S.A. Group
Type of remuneration
Gender pay gap - GPG
Average hourly remuneration
Basic*
20.1%
Total**
30.2%
* Basic salary: the salary paid on a monthly/weekly basis including, among others: basic salary, bonuses and other allowances (e.g. length-of-service
allowance, coal allowance, shift allowance, injury benefits, function allowance - no overtime pay.
** Total remuneration: the sum of basic salary and other remuneration components (for Domestic Companies, remuneration components included
in the remuneration according to the methodology of Statistics Poland), e.g.: annual awards, bonuses and quarterly awards, jubilee awards, overtime
pay.
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Analysis of the resulting gap shows that the Group structure has the greatest impact on the wage gap to the detriment of
women. Employees of the the Group’s companies work in different industries, different market conditions and are subject
to different wage regulations at national and international level. Due to their organisational diversity as indicated above,
employees of the Companies constitute separate and diverse categories of employees.
Moreover, the noticeable difference between the average annual and hourly remuneration results from the use of reduced
working hours in the mining and production Divisions, due to the presence of working conditions particularly burdensome
or particularly harmful to health. Employees, mainly men, working under these conditions and working in reduced hours
are entitled to be paid as if they were working an eight-hour day.
An analysis of the components included in basic and total remuneration shows that the pay gap to the detriment of women
is most affected by pay components related to working conditions, mainly linked to the workplace (underground) and
working systems.
Total remuneration
The ratio showing the annual total remuneration of the highest earner to the median total annual remuneration of all
employees (excluding that highest earner).
In KGHM Polska Miedź S.A., in 2024, the ratio reached 13.1, meaning that the highest-paid employee earned nearly 13.1
times the median annual salary of all other employees.
[S1-17] Incidents, complaints and serious impacts on adherence to human rights
In KGHM Polska Miedź S.A., internal procedures have been in place since 2018 for receiving, registering and processing
reports covering, inter alia, labour law and human rights violations. Applications are registered in a central register.
Subsidiaries are required to implement these procedures within their structures. Most companies have already brought
their internal regulations into line with current legislation, while some remain in the process of implementation.
The statistical data are extracted by analysing the data collected in the aforementioned Register based on selected criteria,
such as the subject of the filing, the subject of the filing, the date of the filing, etc. For S1-17 disclosures, data from the
aforementioned Register were used, taking into account internal filings made in 2024 by Company employees, including
anonymous filings. These included: bullying, harassment, discrimination, unequal treatment, violations of labour and
human rights, violations of rules of social coexistence and violations of personal rights.
Additional information is obtained from quarterly corporate risk reports, consolidated at Head Office level. Risk reports
contain data on key incidents affecting the level of risk.
In addition, the Group companies implemented Procedures for acceptance of internal notifications of violations of law and
taking follow-up actions in the KGHM Polska Miedź S.A. Group, as well as anti-abuse procedures.
In the reporting period, 11 reports were registered in the KGHM Polska Miedź S.A. Group, in which whistleblowers indicated,
among other things, the possibility of abuse. The total number of all whistleblower reports registered with the Group in
2024 was 79.
The total amount of fines, penalties and compensation for damages resulting from cases of discrimination amounted to
PLN 104,500. The amount means discrimination damages, concluded by the District Court Judgement of 29 December 2023
(with the Court of Appeal dismissing the appeal on 28 May 2024). The amount was awarded in 2024, however, the case
related to earlier reporting periods.
During the reporting period, there were no serious human rights violations (e.g. forced labour, human trafficking, child
labour) and incidents involving own labour or serious human rights violations (e.g. forced labour, human trafficking, child
labour) and incidents in the Group involving own labour in violation of the UN Guiding Principles on Business and Human
Rights or the OECD Guidelines for Multinational Enterprises.
The total amount of fines, penalties and damages for serious human rights violations and incidents related to own labour
was PLN 250,000. The amount is the compensation and damages for abuse adjudicated by the judgement of 2 October
2024 of the Regional Court (PLN 50,000 as compensation and PLN 200,000 as damages). The amount was awarded in 2024,
however, the case related to earlier reporting periods.
4.3.2 [S2] Workers in the value chain
In the materiality analysis of the KGHM Polska Miedź S.A. Group's impacts on workers in the value chain, the indirect impact
of the Group's companies on the employees of its suppliers, in particular on their employers' respect for the labour and
human rights of this group of stakeholders, was considered material.
The table below shows the significant impacts, risks and opportunities in relation to ESRS topic S2 - Workers in the value
chain. Detailed information concerning the significant IROs are presented in section [SBM-3] Significant impacts, risks and
opportunities and their links with the strategy and business model. The Group expects suppliers to behave ethically in their
dealings with their employees, but the interests and opinions of stakeholders such as the employees of the Group's
suppliers have not yet influenced the Group's business model or strategy.
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KGHM Polska Miedź S.A. Group, in accordance with the transitional provisions of the ESRS, discloses value chain information
in the first reporting year to the extent of available internal data and publicly available sources (for more information, see
section [SBM-1] Strategy, business model and value chain), limiting the analysis of the characteristics of those performing
work in the value chain of upstream and downstream entities that are or may be materially influenced by the entity,
including influences related to the entity's own operations and value chain, including through its products or services, and
business relationships. Basic information on the main groups of suppliers and customers, key in the Group's business
model and value chain, is included in the section [SBM-1] Strategy, business model and value chain.
[S2-1] Policies related to workers in the value chain
There is no dedicated policy related to workers in the value chain in the KGHM Polska Miedź S.A. Group which would
comprehensively include identified impacts, risks or opportunities under the ESRS S2. Such issues are reflected in other
documents implemented in KGHM Polska Miedź S.A., as well as in Group’s companies that transpose selected policies or
procedures from the Parent Entity. The KGHM Group’s policies are currently being adapted to the requirements arising
from the new sustainability reporting standards.
KGHM Polska Miedź S.A. adheres to the highest ethical, social and environmental standards in its operations, operating in
accordance with international guidelines such as the UN principles, the OECD Guidelines and the United Nations Global
Compact initiative. These commitments are rooted in the Procurement Policy and the Contractor Charter, which is a key
document that sets out the standards for working with external parties and demonstrates a commitment to those doing
the work in the value chain. The Contractor's Charter clearly defines the principles of cooperation, requiring all suppliers
and partners to comply with international standards in the scope of human rights, working conditions and business ethics.
These principles include the elimination of all forms of forced labour, slavery and child labour. The organisation identifies
and monitors high-risk business relationships in accordance with OECD Guidelines and the Joint Due Diligence Standard
for Copper, Lead, Molybdenum, Nickel and Zinc as part of The Copper Mark initiative or the Responsible Minerals Initiative.
The Copper Mark certificate is used by the Group's metallurgical plants. The Copper Mark, as part of its cyclical external
audits, assesses the due diligence procedures in place at KGHM Polska Miedź S.A., confirming full compliance of activities
and policies for responsible mineral supply chains with the recommendations of the OECD Guidelines, including those
relating to human rights.
The Contractor's Charter applies to all business partners of KGHM Polska Miedź S.A., regardless of the region in which they
operate. Supporting responsible raw material sourcing initiatives from conflict-affected areas (conflict minerals) is one of
the key elements of the Contractor's Charter. At the same time, the lack of a formal code of conduct for suppliers and
detailed data on cases of violations by sub-suppliers (tier 2) indicates room for further development in monitoring and
reporting on the compliance with the guidelines.
The Company declares full transparency in its operations by making its Responsible Supply Chain Policy available on its
website, allowing potential stakeholders to familiarise themselves with the rules applicable in the Group. The companies of
the KGHM Polska Miedź S.A. Group do not tolerate violation of human rights, including forced labour or human trafficking,
and in the event of identifying a significant risk of serious abuse, they immediately take action, such as suspending or
terminating the cooperation with the responsible party. The Company emphasises its commitment to human rights, labour
standards, environmental protection and counteracting corruption, as expressed in its Human Rights Policy.
The Group's international assets do not have policies in place for the topic concerned. Companies, on the other hand, are
obliged to comply with the laws in their areas of operation. Canadian examples include: Fighting Against Forced Labour, Child
Labour in Supply Chain Act and the Canadian Human Rights Code.
The Group has not recorded any instances of non-compliance with the UN Guiding Principles on Business and Human
Rights, the ILO Declaration on Fundamental Principles and Rights at Work or the OECD Guidelines for Multinational
Enterprises among employees of cooperating entities.
[S2-2] Processes of collaboration with workers in the value chain in the scope of impacts
The Group does not have dedicated regulations that provide for a possibility for workers in the value chain to actively
participate in the decision-making process regarding the management of actual and potential impacts in the supply chain.
Similarly, there are no regulations in place to provide for the representation of workers in the supply chain through their
representatives or credible proxies or procedures describing the stage, types or frequency of involvement.
In the absence of a dedicated process, no person or unit with operational responsibility for engagement processes has
been identified, nor have the methods, indicators or tool used to assess the effectiveness of engagement with workers in
the value chain been implemented.
[S2-3] Processes for remedying the effects of negative impacts and channels for raising concerns through workers
in the value chain
The general approach and process for providing or contributing to redress where the company has determined that there
is a material negative impact on workers in the value chain corresponds to the process for remedying the impact of negative
impacts on the company's own employee resources as described in section [S1-3] Processes for remediating the effects of
negative influences and channels for raising concerns through own staff resources.
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If the follow-up measures taken by the Company as a result of the report confirm a significant negative impact on workers
in the value chain, adequate corrective and remedial action will be taken, including compensation where justified.
The ways in which workers in the value chain raise concerns or needs directly with the Company and request a solution are
the same as for the Company's own employee resources and are described in section [S1] Own staff resources.
The procedure for internal whistleblowing and taking follow-up measures includes reports from so-called “job seekers”.
Within the meaning of the procedure, a Job Seeker is a person employed by an Entity of the KGHM Group based on an
employment contract and/or civil law contract or other legal relationship (e.g. appointment); regardless of their position in
the organisational hierarchy, a person recruited by an Entity of the KGHM Group, as well as a person employed by a
Subcontractor of one of the above entities.
The KGHM Polska Miedź S.A. Group provides a Whistleblower Platform containing an internal notification form and a list of
other channels to enable the submission of the notification. The solution is accessible to workers in the value chain from
the corporate website level. Other channels - email boxes and telephone lines - are also generally available. The
Whistleblower’s platform is available in four languages: Polish, English, Spanish and Russian. Information on processes that
support or require the availability of channels, as well as issues relating to the monitoring of requests and the evaluation
of their effectiveness, is further described in section [S1-3] Processes for remediating the effects of negative influences and
channels for raising concerns through own staff resources.
KGHM Polska Miedź S.A. undertakes measures to identify, assess and manage negative impacts on workers in the value
chain. These actions include regular supplier audits and assessments, employee training and education, as well as the
implementation of standards and procedures to promote safe and decent working conditions.
At the stage of the purchasing process, contractors are provided with the KGHM Polska Miedź S.A. Group's key corporate
documents, such as the Code of Ethics, the Anti-Corruption Policy, containing information on the internal reporting
procedure and available channels. The Company does not conduct any surveys or analyse the effectiveness of these
mechanisms among value chain employees, nor does it assess their awareness or level of confidence in the whistleblowing
procedures and their ability to resolve violations (publicly available Whistleblower Platform).
Information on the Internal Whistleblowing Procedure is provided to individuals who are not engaged in business activities
in the event of an application to enter into a civil law contract with KGHM Polska Miedź S.A. In accordance with the
Company's procedures, the reason for the commencement of the process related to the conclusion of the aforementioned
agreement is the submission of a declaration by the candidate that he/she has received information on the internal
whistleblowing procedure.
Information in the above scope is included in section [S1-3] Processes for remediating the effects of negative influences
and channels for raising concerns through own staff resources, similar to the description of the principles of protection
against retaliation, respect for the right to privacy and data protection rights for persons using whistleblowing channels.
The Ethics Line and the way it operates in relation to workers in the value chain is universal across the KGHM Group,
including international assets. Companies, either directly - on their websites or indirectly - by referring to the Parent Entity's
resources, provide access to information about the Parent Entity. Moreover, the Code of Ethics of the KGHM Polska Miedź
S.A. Group and the codes of conduct based on the Code of Conduct of KGHM Polska Miedź S.A. are implemented and
applied - relating, inter alia, to the issue of compliance with human rights. The contractor is obliged to become familiar with
the aforementioned documents and to apply them. In addition, at the bidding stage, bidders are required to submit a
declaration of compliance with the principles of human rights and labour standards, ethics and business operations
referred to as the “Contractor's Charter”.
[S2-4] Addressing the significant impacts on workers in the value chain and applying approaches to manage
material risks and using opportunities related to workers in the value chain and the effectiveness of these actions
Actions aimed at suppliers' employees working on the premises of KGHM Polska Miedź S.A. Group divisions
The Parent Entity and selected Group companies implement practices in their operations relating to working conditions
and systems to protect the health and prevent accidents with regard to the work of suppliers' employees. Measures are
taken to monitor the implemented practices and activities. In the selection of suppliers and purchasing processes,
contractors are required to sign and comply with the provisions of the Contractor’s Charter, including the adherence to
basic human and employee rights.
KGHM Polska Miedź S.A. implements advanced safety systems in mines, such as gas monitoring and automatic ventilation
systems, to prevent accidents and protect the health of employees. The effect of these procedures is to counteract potential
negative health and safety impacts for both its own employees and those of contractors performing work on the Company's
sites. It also prevents materialisation of the risk of accidents in the workplace and the associated consequences for
employees and the Company. On the other hand, the starting point for defining appropriate and necessary measures in
response to actual or potential negative impacts (as well as risks) includes, among others, the regulations on occupational
health and safety, traffic management and specialised fire protection at underground mines. Group does not carry out
additional activities beyond those mentioned to prevent significant negative impacts or additional activities with the main
purpose to ensure positive impacts.
352
Value chain employees have an access to documents such as policies, codes of ethics or codes of conduct and information
on how to report violations, including ethics lines. No serious human rights issues or incidents related to the upstream or
downstream value chain were reported during the reporting period.
The Company provides occupational health and safety (OHS) training for third-party employees. During the training,
employees are informed about safety and health risks while working on the Company's premises. They receive all the
necessary information on health and safety, fire protection and environmental protection. Trainees confirm their
attendance with their signature.
Training takes place in various forms, depending on the Company's division. According to Polish regulations, basic OHS
training for their employees is carried out by their employers (subcontractors). The Company requires subcontractors to
have a valid certificate of OHS training. The rules of cooperation with third parties are governed by the internal procedure
in this scope.
According to the procedure, contractors are obliged to inform the OHS Services immediately of any occupational accidents
and near misses on the premises of KGHM Polska Miedź S.A. Other potential negative impacts such as unethical behaviour
that violates the dignity and rights of employees, including employees in the value chain, can be reported through the
Whistleblower Platform. The company continuously monitors and periodically reports data on occupational accidents that
have occurred on its premises and incidents of unethical practices reported through the whistleblowing channel.
In the event of a hazard arising from the characteristics of work in the mining industry, workers in the value chain are
subject to potential assistance of rescuers from the Mining and Metallurgical Rescue Unit. The company also takes steps to
enable corrective measures, including analysing the causes of incidents, updating safety procedures and reviewing training
programs for third-party employees. In the event of the occurrence of actual significant impacts, monitoring of the
implemented corrective actions is carried out, which allows for their effective assessment and adaptation to future risks in
accordance with ISO 45001 and the occupational health and safety management system implemented at KGHM Polska
Miedź S.A.
The KGHM Polska Miedź S.A. Group undertakes a number of measures to raise OHS standards among subcontractors,
including:
− implementing incentive and control procedures (e.g. sobriety checks)
− exchanging experience with contractors,
− organising periodic meetings to discuss OHS issues, with the participation of the National Labour Inspectorate (PIP) and
the State Mining Authority (PUG),
− holding joint meetings to promote safe behaviour,
− providing information and prevention material.
In addition, publicly available tools for reporting ethics, human rights, incidents and other negative impacts on value chain
practitioners, including their monitoring and anti-retaliation procedures, are further written about in section [S1-3]
Processes for remediating the effects of negative influences and channels for raising concerns through own staff resources
and section S2-3 Processes for remedying the effects of negative impacts and channels for raising concerns through
workers in the value chain.
The KGHM Polska Miedź S.A. Group, as part of its dual materiality study, identified the risk of non-compliance with legal
regulations and human rights rules and procedures adopted at KGHM Polska Miedź S.A. in relation to workers in the value
chain.
The analysis revealed a significant opportunity represented by the availability of highly skilled specialists from global
corporations making large investments. The opportunity to collaborate with and benefit from the resources of international
companies fosters the acquisition of knowledge, the exchange of experience and the implementation of best practices in
modern management methods. This cooperation facilitates the transfer of know-how, which can contribute to the
implementation of innovative solutions and increased operational efficiency. An important aspect of this is also the
development of the skills of the Group's employees and managers.
The fulfilment of this opportunity is in line with the Group's strategic development directions, particularly in the areas of
optimising operations and developing the potential of domestic and foreign companies. Striving to improve operational
processes, enhance staff skills and adapt to a changing market environment can promote long-term sustainability and
increase company value. At the same time, an emphasis on innovation, the development of new technologies and
knowledge sharing will allow the implementation of modern technological solutions, the digitalisation of processes and
potential cooperation with the R&D centres of business partners.
The identification and successful exploitation of this opportunity can directly translate into the Group's financial
performance, supporting revenue retention or growth and enhancing the company's ability to adapt in a dynamic market
environment. At the same time, they can help to stabilise operating costs, reducing the risk of their growth.
Currently, no direct resources have been allocated to manage the significant impacts on workers in the value chain. This is
due to several factors: the impacts are indirect (e.g. through the employment of suppliers), there are no tools and
procedures to effectively verify working conditions, and the methods used to cover people in the value chain are parallel to
353
those applied to the Companies' employees. Moreover, no activities other than those related to working conditions were
carried out, due to the fact that most of the identified impacts are potential in nature and because the Company does not
have such a far-reaching actual impact on the behaviour of its contractors, both in terms of positive and negative impacts.
The controls in place are limited to a Contractor's Charter in which value chain entities declare their compliance with the
KGHM Polska Miedź S.A. Group's requirements.
[S2-5] Objectives related to managing significant negative impacts, enhancing positive impacts and managing
material risks and significant opportunities
The Parent Entity and KGHM Polska Miedź S.A. Group companies have not defined targets for managing significant negative
impacts, enhancing positive impacts and managing significant risks and opportunities.
4.3.3 [S3] Affected communities
Detailed information on the impacts, risks and opportunities in relation to affected communities is provided in section
[SBM-3] Significant impacts, risks and opportunities and their links with the strategy and business model.
[S3-1] Policies related to affected communities
There are no policies in place in the Group that would directly address the management of significant impacts, risks and
opportunities related to affected communities.
Nevertheless, the Group’s companies maintain constant dialogue with local governments and communities located in areas
where KGHM’s activities may have an impact. This dialogue also relates to the protection of human rights, which is included
in the provisions of the Human Rights Policy and in the Code of Ethics of the KGHM Polska Miedź S.A. Group.
The reduction of all risks to the local community resulting from the Company’s activities is a priority (including the reduction
of the risk of compromising the right to health through consistent implementation of the Climate Policy and the
Environmental Policy).
The Human Rights Policy, the Climate Policy, the Environmental Policy and the Responsible Supply Chain Policy and the
Code of Ethics adopted in KGHM Polska Miedź S.A. and in the KGHM Group, among others, define the principles and
standards of responsible action also towards local communities.
The Group has not recorded any cases of non-compliance with the UN Guiding Principles on Business and Human Rights,
the ILO Declaration on Fundamental Principles and Rights at Work or the OECD Guidelines for Multinational Enterprises
involving affected communities.
In its Human Rights Policy which is reflected in the approach of KGHM Polska Miedź S.A. to local communities, KGHM Polska
Miedź S.A. is committed to conducting its business in a manner consistent with the International Bill of Human Rights, the
UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, the UN
Declaration on the Rights of Indigenous Peoples and the OECD Due Diligence Guidelines for Responsible Supply Chains of
Minerals from Conflict-Affected and High-Risk Areas. In addition, the Responsible Supply Chain Policy of KGHM Polska Miedź
S.A, also indirectly addressing community issues, is based on criteria consistent with the OECD Due Dilligence Guidance for
Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the LBMA Responsible Gold Guidance
and the LBMA Responsible Silver Guidance and with the criteria within the Joint Due Diligence Standard for Copper, Lead,
Nickel and Zinc implemented at KGHM's Smelter Divisions as part of the industry The Copper Mark Standard.
Selected Group companies introduce, among others, ISO standards, the provisions of which partly address the issue
concerned. With regard to foreign assets, no policies have been established concerning contact with local communities. In
the case of the Victoria Project and the temporarily closed Podolsky Mine (in care & maintenance status), agreements (IBAs -
Impact and Benefit Agreements) have been signed with Indigenous Peoples, providing a framework for cooperation. The
documents are classified.
No specific measures have been separated within the Group to ensure or enable the application of a remedy in the scope
of impact on compliance with human rights. Any identified negative impacts related to the compliance with human work
for the Group's operations were classified as potential.
354
[S3-2] Cooperation processes in the scope of impacts with affected communities
Local communities are key stakeholders of the Group; their voice is taken into account, among others, when launching new
investments. Companies of the KGHM Polska Miedź S.A. Group pay particular attention to maintaining the License to Operate
in the areas in which it runs its business. Group companies have not, however, implemented an overall process for working
with affected communities.
Formal responsibility for cooperation rests with the Management Boards of the Group’s companies, while operational
matters are coordinated by the relevant units. In the Parent Entity, a Department for Cooperation with Local Government
has been established reporting to the Vice President for Development. This department, in cooperation with the
Communication Division, is responsible for coordinating the dialogue between the Group and the community.
In direct cooperation with local government units - representatives of the community - from the Copper Basin (LGOM) area,
agreements are signed annually, which specify the scope of joint activities, objectives, responsibilities of the parties and
expected results, laying the foundation for further relations and implementation of joint projects.
In 2024, the local governments of the Copper Basin once again received financial support from KGHM Polska Miedź S.A.
KGHM has provided 14 local governments in the Copper Basin with funds as part of the Company's broad CSR program
and socially responsible business activities for local people.
The transfer of funds takes place annually, as part of good cooperation between KGHM Polska Miedź S.A. and the local
government units in areas where the Company operates. To ensure that the financial support meets the needs of the local
community, the Company accompanies the local authorities in their investment in health promotion initiatives, healthy
lifestyles and pro-social activities in the municipalities. In 2024, 14 meetings were held between representatives of KGHM
Polska Miedź S.A. with municipality authorities. A key issue was to analyse the needs of the municipalities in the context of
determining the extent of the support provided by the Company. Social dialogue in this area is essential for the cooperation
to contribute to the further development of the cities and municipalities of the Copper Basin.
Local Government Units take measures, among others, to protect the life and health of present and future generations, the
development and integration of the local community in the fields of culture, science and sport. The funds were used for,
among others, preventive health checks, the development of playgrounds and sports fields, the construction of a brine
graduation tower, cultural events or the modernisation of village halls.
The beneficiaries included the municipalities of Gaworzyce, Głogów, Grębocice, Jerzmanowa, Kotla, Lubin, Pęcław,
Przemków, Radwanice, Rudna, Żukowice and the cities of Głogów, Legnica and Polkowice.
Examples of supported activities included:
− examinations and consultations at the Endocrinology Clinic in Głogów;
− health prevention programs , in addition to trips to the swimming pool for primary school pupils and 6-year-olds,
organisation of health holidays for children and young people from Jerzmanowa;
− development of playgrounds and sports fields, retrofitting of village halls and community centres in the Kotla
municipality;
− construction of a brine graduation tower in a historic park in the municipality of Radwanice;
− continuation of the “Healthy Legnica” program;
− chess training, additional sports activities for pupils in Lubin;
− concerts, workshops, thematic events in the municipalities of Grębocice, Polkowice, Rudna and Żukowice.
Moreover, selected Group Companies organised cooperation with schools in the field of practical vocational training and
cooperation with Labour Offices was carried out. Moreover, the support was continued through patronage of vocational
classes in technical schools.
The effectiveness of the activities undertaken is measured by monitoring the achievement of the budget targets set for this
type of interaction. Moreover, Local Government Units are required to submit reports on the expenditure of funds acquired
from external entities. The Group does not have additional other procedures and tools to monitor the effectiveness of its
operations.
No direct steps have been taken at KGHM Polska Miedź S.A to gain insight into the perspectives of affected communities
who may be particularly vulnerable or who may be marginalised. The Group declares full respect for human rights, including
the rights of indigenous peoples, in all areas of its operations. The aforementioned projects in selected international assets
have signed an IBA agreement formalising the terms of cooperation between the company and indigenous peoples.
As part of its approach to stakeholder engagement, KGHM Polska Miedź S.A. takes into account the principles of equal
treatment and ensures that its activities do not violate the fundamental rights or interests of any social group. For areas
355
inhabited by indigenous peoples, the Group companies maintain dialogue based on respect, transparency and compliance
with international standards.
In most Group companies, due to their profile and scale of operations, the perspectives of affected communities were not
taken into account in terms of their impact on decisions or actions aimed at managing actual and/or potential impacts.
Selected Group companies (KGHM Metraco S.A., "Miedziowe Centrum Zdrowia" S.A., NITROERG S.A.) given the context of
their organisations, identify stakeholders and their expectations. Where necessary, stakeholders were consulted, which
translated into the identification of their perspectives, concerns and expectations. Moreover, public consultations were held
when environmental decisions were obtained and/or general plans/MPZP were amended, as part of which interested
parties were able to submit relevant comments.
Adequate housing conditions
Housing conditions can be shaped by various factors, including noise and odours, which result from the operational
activities and investment plans of KGHM Polska Miedź S.A. and the Group’s companies. In an effort to minimise potential
negative impacts, the Company applies appropriate processes to assess and manage the impact of its activities on the
environment.
Operational activities and implementation of investments may involve the generation of noise. The company conducts a
systematic environmental impact assessment, including an analysis of noise levels in the context of the applicable
standards. Noise models and measurements are used to verify compliance and identify possible sources of nuisance. The
company also consults the public in cases where there may be a significant impact on the environment. Nevertheless, there
are occasional signals from the local community indicating subjective feelings about noise nuisance.
In some locations, especially near the metallurgical plants, unpleasant odours can occur, especially under specific weather
conditions. As part of the environmental impact assessment, the chemical composition of the emissions and the potential
extent of the spread of odours are analysed. The company applies solutions to minimise their nuisance. Where necessary,
public consultations are organised to assess the scale of the problem and develop possible remedial action.
When no action is required for a specific area, the Company does not implement additional processes, which is noted in
the environmental impact reports.
Impact on land
Mining activities can affect local land and community-owned buildings. Key aspects of this impact include:
− Mining and post-mining damage - As a result of mining activities, damages affecting private individuals' buildings,
municipal and national roads may occur.
− Remedying measures - Under the circumstances where the Company's mining activities lead to damage of
infrastructure, the Company takes specific remedial action. Each case is analysed in detail to confirm its relationship
with the business conducted.
− Damage reporting process - The Company has a clearly defined process in place for reporting damages resulting from
mining activities. This procedure allows for effective handling of the notifications and taking appropriate remedial
actions.
The Group implements preventive measures in line with mining legislation. It minimises the impact of mining on the
environment, such as bump prevention, technical inspections and monitoring of infrastructure and optimisation of mining.
Prevention activities also include staff training in security and emergency response, the development of emergency
procedures and cooperation with local services, as well as investment in modern security technologies.
In addition, reclamation of post-mining areas is being carried out, restoring their utilitarian and ecological functions as a
result of the obligations imposed by the geological and mining law.
The Group works with local authorities and communities to reduce the long-term impacts of mining activities. As part of
this cooperation, decisions are made to adapt mining plans to local conditions and to support infrastructure investments
in areas affected by mining activities.
Impact on health
Selected Group companies carry out activities that have a positive impact on the health of local communities, including
health prevention (organisation of preventive programs , subsidised diagnostic tests in cooperation with municipalities,
promotion of healthy lifestyles and physical activity) and medical infrastructure.
KGHM Group manages spas, hospitals and clinics, which allows it to support local communities directly in the scope of
healthcare and rehabilitation.
356
Company's impact on social life, development of local communities and the environment
KGHM Polska Miedź S.A. perceives itself as an integral element of the local communities, which is manifested in its
involvement in municipality activities and its support for socio-economic development and environmental protection.
The company actively engages in activities that support social capital by organising and supporting cultural, sporting and
educational events, collaborating with local schools, universities and educational institutions and supporting community
initiatives. It influences the development of local communities through the payment of taxes to local and national budgets
and the offer of employment. The Company is a significant employer in the region, creating stable jobs and supporting the
local economy. The Company's impact on local nature and ecological activities occurs through its environmental campaigns
and environmental education and awareness campaigns promoting nature conservation.
Arsenic emissions
KGHM Polska Miedź S.A. emits arsenic in connection with its smelting activities, as described in more detail in section E2
Pollution, but the impact of these emissions on health and the environment is assessed as potential, not actual, and the
risk of negative impacts from arsenic emissions is low.
The arsenic content in the air is monitored by the Chief Inspectorate for Environmental Protection as part of the State
Environmental Monitoring. For arsenic, a target level of 6 ng/m
3
as an annual average concentration has been set in
accordance with Directive 2008/50/EC of 21 May 2008 on air quality and cleaner air. A target level is the concentration of a
substance to be attained within a given period of time by means of economically justified technical and technological
measures (the level is set with the aim of avoiding, preventing or reducing harmful effects of the substance on human
health or the environment as a whole). It is a fact that in previous years the content of arsenic in the air significantly
exceeded the designated target level, however, the BATAs program launched between 2017 and 2023 significantly reduced
arsenic emissions into the air from the metallurgical production of KGHM Polska Miedź S.A. which resulted in a reduction
in the level of average annual arsenic concentrations in the Lower Silesian Province.
In response to the needs of local communities and potential questions related to arsenic emissions, the Company has
opened two diagnostic outpatient clinics in Legnica and Głogów, specialising in assessing the health of local residents.
In addition, in 2018, surveys of Głogów residents and a comparison group of 200 people - residents of Łódź - were carried
out on environmental exposure to arsenic. In the surveys carried out, an equal percentage of exceedances of the reference
values was recorded for the populations of Głogów and Łódź. The speciation analysis confirmed that the majority of the
total arsenic pool is organic arsenic, i.e. from sources other than industrial processes. The main sources of organic arsenic
in the body are the products consumed: rice, rice products, other cereal products, fish and seafood.
Prior, free and informed consent, self-determination and cultural rights
Companies of the KGHM INTERNATIONAL LTD. Group may potentially have a negative impact on indigenous communities,
especially if they do not provide opportunities for voluntary, informed consent for the projects implemented. The right to
self-determination and the protection of cultural heritage require special attention to avoid social conflicts and violation of
rights.
The Ajax project (Canada, British Columbia) is currently at the planning and analysis stage. The measures taken to date do
not indicate an imminent risk of violation of indigenous peoples' rights, including the right to self-determination and the
protection of cultural heritage. The likelihood of such violations is low due to the prevention implemented (compliance with
environmental permits and reporting to regulators) and the principles of cooperation with local communities - an element
of the project is to conduct a dialogue between KGHM INTERNATIONAL LTD. representatives and representatives of
indigenous peoples.
Under the Victoria project (Canada, Ontario) meetings with Indigenous Peoples' representatives are organised that resulted
in the Impact and Benefit Agreement, a document containing the key findings on the environmental, cultural and economic
impacts of the Company's operations and the benefits the community will receive in return for the consent to the
operations. The agreement also describes issues such as the mechanisms of project management and potential
compensation for damages. Currently, meetings and discussions take place to conclude cooperation agreements for the
production phase of the project. All progress in talks, doubts raised and explanations given are continuously monitored
and registered. As a result of respecting the traditions of indigenous peoples and cultural heritage, the company assesses
the risk to cultural rights as low.
The likelihood of impact of the aforementioned projects and potential severity of the Company’s impact on smaller thematic
units such as freedom of expression, freedom of assembly, influence on human rights defenders, adequate food or water
and sanitation were assessed as low (no impact of the Company on these issues) and were therefore not described in the
Report.
The negative impacts on affected communities identified by the double materiality analysis are potential. In the case of
their materialisation, the Group will carry out an analysis of the causes of the situation and, if warranted, take appropriate
management action and implement corrective or preventive measures to mitigate the risk of the negative impact recurring.
357
[S3-3] Processes to remedy negative impacts and channels for raising concerns by affected communities
KGHM Polska Miedź S.A. keeps constant dialogue with local communities with the aim to work towards improving their
living conditions. The needs of the community were verbalised in a series of meetings organised by the Department of
Cooperation with the Local Government. The activities are mainly targeted at coordinating the arrangements with the Local
Authorities and local communities, enabling the implementation of investments and the fulfilment of the provisions of the
Company Strategy. The Company takes steps to compensate local communities for the impact it exerts on the environment.
In 2024, meetings were held with the Mayors, Governors of Municipalities and Presidents of the Copper Basin during which
issues of importance to both the Local Government Units and the Company were discussed. By participating in the
development of the regions, the company supports investment in infrastructure (water supply systems, wastewater
treatment plants, urban monitoring, improvement of communications, health care) and social issues, including involvement
in the organisation of events for employees and residents and charitable events. Residents have the opportunity to
communicate directly with the Company through various communication channels (social media, traditional and email
exchanges, open days, meetings, phone calls) and the publicly available "Ethics Line" whistleblowing tool (more in section
[S1-3] Processes for remediating the effects of negative influences and channels for raising concerns through own staff
resources).
Moreover, residents have the opportunity to report their concerns about impacts individually, e.g.: the impact of mining
operations via the “For residents” tab on the company's corporate website, where the procedures for, among others,
reporting mining damage directly to the affecting entities are explained and made available. KGHM Polska Miedź S.A.
undertakes preventive actions to mitigate the effects of mining on the surface of the area and its development and is liable
for mining damage that could not have been prevented.
The activities undertaken include:
− covering the costs of building safeguards in structures erected in mining areas exposed to the damaging effects of
deformation and mining shocks,
− retrofitting of buildings that are not resistant to the harmful effects of the planned mining operations,
− covering the cost of drainage in areas exposed to waterlogging and flooding as a result of mining impact,
− repairing facilities damaged by the effects of mining operations or reimbursement of the costs of such repairs.
− implementation of the BATAs Program and the launch of diagnostic clinics in Legnica and Głogów,
− compliance with legal requirements regarding noise emissions.
The Group’s companies, due to their business profile, mostly do not have defined processes for providing remedies where
significant negative impacts on society are identified. Where appropriate, remedial action is taken to restore the desired
status.
KGHM Polska Miedź S.A. provides information on its website on how to report irregularities (publicly available
Whistleblower Platform). The Company does not conduct any surveys or analyse the effectiveness of these mechanisms
among value chain employees, nor does it assess their awareness or level of confidence in the whistleblowing procedures
and their ability to resolve problems.
Whistleblowing channels have been established so as to guarantee their accessibility, anonymity of the whistleblower, if
necessary. Irregularities can be reported through one of the following confidential channels:
− dedicated Line of Ethics platform;
− e-mail correspondence sent to the following dedicated e-mail addresses: antykorupcja@kghm.com or
liniaetyki@kghm.com;
− a dedicated helpline +48 76 747 8282 (direct contact with an employee of the Enterprise Risk and Compliance
Management Department);
− recording telephone line +48 76 74 80 777 (contact via recording telephone line without participation of a member of
the Enterprise Risk and Compliance Management Department);
− written correspondence sent to:
Department of Corporate Risk Management and Compliance
KGHM Polska Miedź S.A.
ul. M. Skłodowskiej-Curie 48
59-301 Lubin
− In order to ensure full confidentiality of the submitted Notification, the envelope should contain a note: "Internal
notification - personally to the ZR";
− a verbal Notification during a face-to-face meeting in the the Enterprise Risk and Compliance Management Department.
A request for such a meeting should be submitted via the email addresses or telephone numbers provided. The meeting
shall take place at a date agreed with the person submitting the Notification, no later than 14 days from the date of
receipt of the request in this regard.
358
− if the Notification relates to a Member of the Management Board of KGHM Polska Miedź S.A. or persons designated as
responsible for accepting the Notifications and members of the Verification Team, the Notification should be submitted
immediately to the Supervisory Board of KGHM Polska Miedź S.A. for further processing;
− in the case of notifications outside Poland:
Table 195. Notification channels for international assets of the KGHM Polska Miedź S.A. Group
Country
Phone
e-mail
North America and Canada
+1 866 921 6714
kghm@integritycounts.ca
Chile
+56 123 0020 3914
kghm@integritycounts.ca
China
+86 186 1639 3022
antykorupcja@kghm.com
Russia
+48 76 747 8282
antykorupcja@kghm.com
Information on the implementation of the notification handling process is subject to periodic reporting. The statistical data
related to the notifications are collated and subject to presentation as part of the annual reporting. According to the analysis
conducted since 2018, i.e. since the adoption of the internal regulation on the acceptance of reports submitted by
Whistleblowers, KGHM has observed a constant upward trend (averaged value), which may demonstrate the confidence of
employees in the implemented solutions. For more information on the Whistleblower platform, including how to protect
against retaliation, see section [S1-3] Processes for remediating the effects of negative influences and channels for raising
concerns through own staff resources.
[S3-4] Addressing the significant impacts on affected communities and applying approaches to manage material
risks and opportunities related to these communities and the effectiveness of these actions
In 2024, KGHM Polska Miedź S.A. undertook a number of family-friendly initiatives targeting employees and the local
community. Due to the adaptation of activity descriptions to ESRS requirements, not all MDR-A requirements have been
included.
− KGHM Academy
As part of the KGHM Academy initiated in 2024, 44 prevention programs were carried out, including: Treasure
Archipelago (“Archipelag Skarbów”), School for Parents and Guardians, Leader100 and the original program of the
KGHM NGO Academy – Prevention Zone. The beneficiaries of these activities were 2,700 people, including pupils, their
parents and carers, as well as teachers. The Company also subsidised NGO training as part of the fourth edition of the
Copper Beasin NGO Academy. Thus, cooperation with institutions responsible forfamily foster care in the region was
deepened, and a number of activities promoting foster parenthood were carried out as part of the social campaign
Mie(dź) Rodzinę (Have a Family), i.e.: organising rallies for foster families, subsidising programs to improve the
parenting skillsof carers, occasional gifts on the occasion of children's day, St. Nicholas' Day for wards, etc.
− Have a Family and KGHM Family Zones
As part of its social campaign, Have a Family, the Company actively promoted and supported foster parenting in the
region. One of the key events of the campaign was the Foster Families Rally, which took place at the Jakuszycka Glade. As
part of the event, Family Zones were organised, where specially prepared stands encouraged family activities, offering
a variety of attractions and workshops.
− Cultivating mining and metallurgical traditions and culture
Traditions are an important element of the identity of KGHM Polska Miedź S.A. and the Copper Belt community,
involving all Group companies and the people of the region. A ceremony is organised on the anniversary of the discovery
of the copper deposits to pay tribute to the region's industrial heritage and the people who contributed to the
development of copper mining. The 50th anniversary of Rudna mine and the 45th anniversary of Cedynina Copper
Smelter and Refinery were also celebrated in 2024. The anniversaries involved the organisation of numerous events
and cultural gatherings in the cities of the Copper Belt, which were attended by both current and former employees
who were part of the community.
An integral element of the traditions of KGHM Polska Miedź S.A. are Barbórka and Metallurgist's Day - the most
important industry holidays which are celebrated each year with the involvement of all Group companies. Their
celebrations emphasise the importance of community, continuity of tradition and respect for the hard work of miners
and smelters, the foundation of KGHM's operations.
− Cooperation with Local Government Units (described in section S3-3 Processes to remedy negative impacts and
channels for raising concerns by affected communities).
− How important industry traditions are in Polish Copper is evidenced by the inclusion of smelting traditions on the
National List of Intangible Cultural Heritage in 2024. KGHM Polska Miedź S.A. has become one of the depositories of
this project.
Due to the fact that the vast majority of Group companies do not have a significant impact on communities, they did not
define action plans and consequently did not define capital expenditures (CAPEX) or operating costs (OPEX). Ad hoc support
includes donations and sponsorship activities, which, after analysis and decisions by the sponsorship committees, are
awarded according to requests made by representatives of the local communities.
359
Employee volunteer program
The Copper Heart (“Miedziane Serce”) employee volunteer program has been operating in KGHM Polska Miedź S.A. since
2014.
Volunteer activities at KGHM Polska Miedź S.A. in 2024
In 2024, 107 volunteering initiatives were carried out, involving 797 volunteers, devoting more than 3,747 hours to their
preparation and implementation.
Key activities:
Support for communities in crisis situations - Assistance for flood victims:
− Collections were organised in each division of the Company, providing cleaning products, water and cleaning tools.
− Three groups of volunteers went directly to the site of the disaster, where they helped with clean-up, delivering
donations and restoring access to the power grid.
− Employees have been involved in flood protection in large numbers, both in their localities and those at risk of flooding
in the region.
Original projects by the Concentrators Division volunteers,
− KGHM in a funny way (KGHM na Wesoło), KGHM for Children (KGHM Dzieciom) or In the Footsteps of Jan Wyżykowski
(Śladami Jasia Wyżykowskiego)– popular initiatives carried out in kindergartens and schools.
− Volunteers also look after the wards of a school and educational centre in Lubin, organising, among others, the Second
Special Integration Sports Olympiad.
Supporting people with disabilities:
− Extensive modernisation of the garden of the training house in Przemkowo, enabling people with disabilities to use the
green area.
− Organising games and sports competitions for hundreds of disabled participants.
Support for sports initiatives:
− Constant participation in events such as: Piastów Summer Run (Letni Bieg Piastów), Run in W Hour (Bieg w Godzinę W),
KGHM Cup tournament, Chojnów Municipality Cross (Cross Gminy Chojnów), Wild Run in Wrocław.
− Volunteers are involved in organising events and providing animation.
Help for animals:
− Support for ward cats by providing new kennels, food and sterilisation in cooperation with the Jagodzianki Foundation.
Additional activities:
−
− Development of volunteers' skills, such as project management and teamwork, through a variety of initiatives.
Volunteer activities at KGHM in 2024 reflect employees' commitment to building social ties and supporting local
communities, highlighting the importance of the Company's social responsibility KGHM Polska Miedź S.A. undertakes a
range of activities to prevent, mitigate and remedy significant negative impacts on affected communities. In the framework
of signed cooperation agreements with local government units (LGUs), the Company financially supports local initiatives in
the field of health promotion, healthy lifestyles and pro-social activities.
The Company takes steps to provide redress in relation to actual significant impacts on communities. The transfer of funds
takes place on an annual basis and LGUs are obliged to submit reports on spending of the funds transferred for the
investments and tasks for which they have received funds.
KGHM Polska Miedź S.A. reviews reports submitted by LGUs, but does not have additional, other procedures and tools to
monitor the effectiveness of activities.
Social dialogue and cooperation with local authorities are key to ensuring that the initiatives undertaken meet the real
needs of the community.
The processes allowing to determine what action is needed and appropriate include regular meetings with municipality
representatives and the analysis of their needs. Cooperation with the LGUs enables KGHM Polska Miedź S.A. to tailor its
financial support to the specific requirements of local communities, which contributes to their development and improves
the quality of life of the Copper Basin inhabitants.
Due to the fact that the vast majority of Group’s companies do not generate significant impacts on the community, they did
not define action plans. Ad hoc forms include the donations granted or sponsorship activities. They are awarded and
monitored on an ongoing basis, in line with requests submitted by local communities.
360
The Group’s companies located in Canada manage historic mining sites to mitigate their impacts on the environment and
affected communities. These activities include data collection, modelling, risk assessment and implementation of mitigation
and monitoring plans. The Company remains environmentally compliant, meets regulatory requirements for facilities’
closure plans and fulfils its obligations under Impact and Benefit Agreements with indigenous communities.
The above-mentioned activities are provided for in the companies' budgets. Safeguarding of remediation required by
permits and annual budgets support environmental and remediation expenditure.
The Company takes additional measures to ensure positive impacts on affected communities, including through the
implementation of IBA agreements with indigenous peoples. Their effectiveness is monitored and evaluated in terms of
delivering measurable benefits to communities.
Risk management and the exploitation of potential opportunities in relations with communities is based on responsible
planning and monitoring of the effectiveness of activities. The Company ensures that its practices do not cause or contribute
to material adverse impacts through the management and mitigation processes in place. All activities are implemented on
the basis of dedicated human resources and annual budgets. Currently, no serious human rights issues or incidents related
to communities affected by activity of the KGHM Polska Miedź S.A. Group have been recorded.
[S3-5] Goals related to managing significant negative impacts, enhancing positive impacts and managing significant
risks and opportunities
The Company's goal is to minimise the impact of its activities both socially and materially by carrying out activities in the
areas of culture, health promotion, sports, ecology and science. The scope of these activities has been defined as social and
material, with a measurable target of the number of initiatives implemented, with a baseline of no less than 10 in 2024.
These targets are in line with the Company's business strategy, which also defines milestones and intermediate targets.
The KGHM Polska Miedź S.A. Group is in the process of aligning targets with ESRS disclosure requirements. Hence, not all
MDR-T requirements are described.
These assumptions are not linked to any specific policy or science-based environmental issues. The methodology for their
implementation and monitoring has not been defined in detail. However, the target-setting process is based on regular
dialogue with local communities, while information on actions taken and results is communicated through press releases.
Currently, no separate data is available on changes in metrics, assumptions or performance against targets.
The Company consistently engages in activities that support the development of local communities, taking into account
their needs and expectations, as an integral part of its strategy.
The Group’s companies, including international companies, have not defined targets for managing significant negative
impacts, enhancing positive impacts and managing significant risks and opportunities.
4.3.4 [S4] Consumers and end users
Within the KGHM Polska Miedź S.A. Group, only a small group of companies has been identified for which contact with
consumers and end-users is of key importance, where significant impacts have been identified. This group includes:
„Miedziowe Centrum Zdrowia” S.A. ("MCZ" S.A.) and spa companies belonging to Polska Grupa Uzdrowisk sp. z o.o. (PGU):
Uzdrowiska Kłodzkie S.A. - PGU Group, Uzdrowisko Cieplice Sp. z o.o. - PGU Group, Uzdrowisko Połczyn Grupa PGU S.A. and
Uzdrowisko Świeradów-Czerniawa Sp. z o.o. - PGU Group.
Table 196. Characteristics of selected KGHM Group companies and their consumers and end-users
Name of entity and country of
establishment
Activities
Characteristics of consumers or end-users
Uzdrowiska Kłodzkie S.A. -
PGU Group (Poland)
Provisions of services in the area of spa-
healing, sanatorium, preventative
medicine, rehabilitation, biological
renewal, recreation based on natural
healing materials and bioclimatic
conditions
Clients and patients receiving curative and
rehabilitation therapies within the framework of
the National Health Fund and private patients
Uzdrowisko Połczyn Grupa PGU S.A.
(Poland)
Uzdrowisko Cieplice sp. z o.o. -
PGU Group (Poland)
Uzdrowisko Świeradów Czerniawa
sp. z o.o. -
PGU Group (Poland)
„MIEDZIOWE CENTRUM ZDROWIA”
S.A.(“MCZ” S.A.) (Poland)
Hospital services; medical practice;
activities related to protecting human
health; occupational medicine
Individual patients, including employees of
KGHM Group companies under AOM*, local
community; private and under NFZ
361
Name of entity and country of
establishment
Activities
Characteristics of consumers or end-users
None of the aforementioned entities offer products that are intrinsically harmful to humans or increase the risk of chronic diseases.
The services provided by the aforementioned KGHM Group companies do not have a real negative impact on the right to privacy, data
protection, freedom of expression or non-discrimination. Patients, clients and consumers are not put at risk by not having access to
accurate and accessible information about services and products. The companies listed do not pursue aggressive marketing and sales
strategies to vulnerable groups such as children or the financially disadvantaged.
*Medical care subscription
In the analysis of the materiality of the impact of the KGHM Polska Miedź S.A. Group on consumers and end-users, the
potential impact of the aforementioned Group companies on the privacy and security of this group of stakeholders was
considered significant. For an explanation of the overall approach adopted by the Group to identify and manage any
significant actual and potential impacts on consumers or end-users related to the entity's products or services, see [IRO-1]
Description of the process to identify and assess significant impacts, risks and opportunities. Detailed information
concerning the significant IROs are presented in section [SBM-3] Significant impacts, risks and opportunities and their links
with the strategy and business model.
The KGHM Polska Miedź S.A. Group has not identified any links between the interests, views and rights of consumers or
end-users and the Group's strategy and business model in the context of the ESRS 2 SBM-2 requirements. The KGHM Polska
Miedź S.A. Group has also not identified a link between significant risks and opportunities arising from impacts on
consumers or end-users and the entity's strategy and business model. These impacts do not derive from, shape or
contribute to the Group's strategy or business model (e.g. the regulatory context of GDPR).
[S4-1] Policies related to consumers and end users
„Miedziowe Centrum Zdrowia” S.A.
"Miedziowe Centrum Zdrowia" S.A., in order to manage the potential negative impact of the loss of sensitive personal data,
has implemented procedures related to Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April
2016 on the protection of natural persons in relation to the processing of personal data and on the free movement of such
data and repealing Directive 95/46/EC (hereinafter in subsection: GDPR).
Detailed information on the grounds and principles for the processing of personal data, monitoring and the rights of data
subjects is provided on the website www.mcz.pl under "GDPR". As standard, the company's website also includes contact
information for the designated Data Protection Officer (DPO) and deputy DPO, as well as information clauses for: (1)
patients, (2) applicants for employment and (3) contractors, including employees of contractors. An appropriate contact
form is provided in the event of a suspected data breach. Violations can also be reported to the DPO via email at iod@mcz.pl.
By design, the provisions of the RODO Regulation apply to and take into account the interests of all consumers and end-
users and do not exclude any group, including in terms of geographical areas. The provisions of the GDPR also apply to
other stakeholders - in the value chain, local communities, business partners.
The functioning of the Integrated Management System at “MCZ” S.A. plays a key role in managing the company's real,
positive impact on patients' health. Its compliance with PN-EN ISO 9001:2015-10, PN-EN ISO 14001:2015-09 and PN-ISO
45001:2018-06 is regularly verified through recertification audits, confirming the company's high standard of quality,
environmental and occupational health and safety management.
MCZ S.A. has a Group-wide Code of Ethics (see section [S1-1] Policies related to own staff resources for information on the
document), but no separate human rights policy has been adopted.
The company has not recorded any cases of non-compliance with the UN Guiding Principles on Business and Human Rights,
the ILO Declaration on Fundamental Principles and Rights at Work or the OECD Guidelines for Multinational Enterprises
referring to consumers or end users.
The issues governing relationships of this kind are set out, inter alia, in the provisions of the Act of 6 November 2008 on
Patients' Rights and Patients' Ombudsman (consolidated text, Journal of Laws 2024, item 581). Compliance with the patient's
rights defined in this law is the responsibility of the public authorities with jurisdiction over health care, the National Health
Fund, health care providers, medical practitioners and other persons involved in the provision of health care services.
The Patients’ Ombudsman collaborates with healthcare providers on an ongoing basis to monitor the compliance with
patient rights. Patients can familiarise themselves with their statutory rights via the website of "Miedziowe Centrum
Zdrowia" S.A., where an extract from the applicable legislation is provided.
The Management Board is the body responsible for defining the objectives of policies, regulations and procedures, adopting
and overseeing their implementation in the organisation.
PGU companies
The companies belonging to Polska Grupa Uzdrowisk sp. z o.o., due to the nature of their activities and services provided,
conduct all their activities in accordance with the health care industry regulations in force in Poland and the guidelines of
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the National Health Fund. The policies implemented in the companies are consistent with those adopted throughout the
KGHM Group.
In order to manage the identified negative impact, i.e. the potential loss of sensitive personal data of visitors and customers,
the companies have in place, compliant with the GDPR, a General Information Clause concerning the processing of personal
data together with a Privacy Policy, which sets out the principles for the processing and protection of personal data of
persons who have provided Polska Grupa Uzdrowisk sp. z o.o. their data, including persons using the services, contractors
and their employees, users, in connection with their use of the services offered by the internet service (website) of Polska
Grupa Uzdrowisk sp. z o.o. and newsletter subscribers. The clause indicates the controller of the personal data, the purpose
of the processing, the processing rights and the retention period. The information clauses are made available on the
companies' websites and cover all consumers or end-users of PGU companies.
The tools for managing the real positive impact of PGU companies on the health of patients and visitors are the internal
standards of service and care (including the certified ISO 9001 quality management system at Uzdrowisko Kłodzkie S.A. -
PGU Group) and ongoing patient satisfaction surveys. Stakeholder interactions, conducted through meetings, surveys and
dialogue, form the basis for developing and updating company-specific procedures. Where deficiencies are reported by
consumers or end-users, prompt corrective action is taken to restore the desired standard of services provided. In addition,
third-party activities, such as certification and auditing bodies, enable the identification of areas for improvement in product
or service quality.
Direct relationships with end-users are built during patients' stays in spas. Patients can submit their comments, opinions
and suggestions in writing, e.g. through complaints or surveys. Dedicated feedback applications are also available in
selected cases.
The PGU companies have not implemented a formalised human rights policy and associated obligations relevant to
consumers and end-users. However, these issues are addressed in documents adopted by the PGU companies and in force
at the KGHM Group level, such as the Code of Ethics and the Anti-Corruption Policy (both documents are described in
section [S1-1] Policies related to own staff resources). The Companies do not have secured measures or remedial
mechanisms in the scope of human rights impacts other than the KGHM Group’s “Line of Ethics”.
All policies, regulations and internal acts are implemented by the Management Boards of the companies, in accordance
with the corporate governance rules applicable in the KGHM Group.
The company has not recorded any cases of non-compliance with the UN Guiding Principles on Business and Human Rights,
the International Labour Organisation Declaration on Fundamental Principles and Rights at Work or the OECD Guidelines
for Multinational Enterprises referring to consumers or end users.
[S4-2] Cooperation processes in the scope of impacts with consumers and end users
„Miedziowe Centrum Zdrowia” S.A.
In "Miedziowe Centrum Zdrowia" S.A., the patient satisfaction survey is an effective tool to support the process of
continuous quality improvement in healthcare. The systematic and reliable collection of patient feedback enables a rapid
response to their current needs. The satisfaction survey is implemented on a continuous basis and questionnaires are
made available to patients of the company's various business units. The surveys are anonymous, allowing for direct
interaction with patients and their legitimate representatives. Once a year, a summary analysis of the satisfaction survey
results is carried out with the aim of drawing conclusions and introducing possible remedial measures.
Detailed customer satisfaction survey data for 2024 is under development - the results are discussed during the cyclical
Integrated Management System Reviews, which usually take place in May/June each year) The analysis of the opinions given
regarding catering in hospital "MCZ" S.A. in Lubin was at a satisfactory level, however, it was rated much lower than the
other areas of the entity's operation, which is why it was one of the main determinants of the implementation of a pilot
program in the company in the field of nutrition education and improvement of the quality of nutrition in hospitals entitled
“A good meal in hospital”.
Over the years, it has been observed that the active participation of patients in the survey results in them being more
involved in the treatment process itself (the fact that the vast majority of respondents form the 60+ group may be of
significance), which in some way also translates into building trust in the healthcare provider.
Through the implementation of the Integrated Management System, the company is continuously improving the processes
implemented. This has a direct effect on the ongoing evaluation by patients using the services as well as the opinions of
objective experts. As part of the latest edition of the newspaper "Rzeczpospolita's" national ranking of hospitals, called
"Safe Hospital", which was created in cooperation with the Healthcare Quality Monitoring Centre, the "MCZ" S.A. hospital in
Lubin won second place among Lower Silesian hospitals. In addition, in the national comparison, the entity was ranked
second in the 'Level II Hospital Network' category.
In July 2022. The Minister of Health awarded a certificate to "Miedziowe Centrum Zdrowia" S.A. in Lubin, which confirms
that "MCZ" S.A. meets accreditation standards for hospital treatment (certificate no. 2022/44 valid until 26.07.2025).
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It is the responsibility of the company's Management Board to ensure that the engagement in the satisfaction survey
process is implemented and that the results are used in the company's activities.
Due to the nature of its business, the company ensures that its services are available to all stakeholders, regardless of their
circumstances. No specific action has been taken to gain detailed insight into the needs of consumers and end users who
may be particularly vulnerable or marginalised. The exception to this is the "Standard for the Protection of Minors at the
Miedziowe Centrum Zdrowia S.A. in Lubin", which has been introduced, which sets out the principles for the protection of
children to ensure a safe and friendly environment for them. This document sets out procedures for identifying and
addressing risks, including suspected abuse of minors, and sets out the principles for intervention and support planning
and the responsibilities of staff in protecting them.
The activities of 'MCZ' S.A. are highly formalised. The hospital and outpatient clinics are governed by health care legislation,
ISO standards, a Code of Ethics, an anti-corruption policy and a number of institutions that support patients' rights and
regulate their stay on hospital premises, including treatment, so the company does not see the need to draw up a general
procedure (process) for working with consumers and end-users such as patients.
PGU companies
In the spa companies, patients can submit comments via paper surveys, a dedicated app or by submitting complaints
verbally or in writing. In Uzdrowiska Kłodzkie S.A. – Grupa PGU, the procedure is in place for dealing with complaints . In
addition, there are anti-corruption clauses in contracts with contractors, which indicate dedicated reporting channels where
appropriate. In addition to patients, the companies have direct contacts with the Social Insurance Institution (ZUS) and the
National Health Fund (NFZ).
Contact with patients takes place at every stage of their stay in the spas. The conditions of stay and the rules of treatment
are defined and controlled by the National Health Service before and during the signing of the contract. A similar procedure
applies in the case for stays organised by ZUS as part of tenders. Accordingly, the interaction with individual clients is
therefore continuous, starting from the moment of application and continuing until the end of the stay.
The operational responsibility for ensuring the implementation of spa guests engagement and the impact of the results of
their feedback on the business rests with the management boards of individual companies. The effectiveness of
interactions with consumers and end-users is overseen by the treatment and commercial divisions.
The effectiveness of these interactions is measured by indicators such as the results of satisfaction surveys, contract
volumes with the NFZ, the number and subject of complaints (both in surveys and through other communication channels),
the number of returning customers and the value of sales.
The perspective of consumers and end-users, including vulnerable or marginalised people, is explored through the analysis
of satisfaction surveys, information obtained through a dedicated app and the monitoring of online communication
channels. Consumers can also report their comments and complaints to the company's employees and, in the case of
treatment financed by the NFZ and ZUS, also directly to these institutions. The companies have not implemented a formal
overall process for engaging with consumers or end-users. Their spa operations are strictly formalised and they also base
their values, including their approach to working with their patients, on the Code of Ethics and the Anti-Corruption Policy
of the KGHM Polska Miedź S.A. Group.
[S4-3] Processes to remedy negative impacts and channels for raising concerns by consumers and end users
In the KGHM Polska Miedź S.A. Group, there is one common mechanism for reporting and processing complaints for all
companies. This is the publicly accessible Whistleblower Platform called “Linia etyki” [The Line of Ethics]. A detailed
description of the operation of the channel for reporting concerns and irregularities, together with the procedure and
internal regulations against and prohibiting retaliatory practices, is provided in section [S1-3] Processes for remediating the
effects of negative influences and channels for raising concerns through own staff resources and section [S4-1] Policies
related to consumers and end users. In addition, companies with direct business relationships with consumers and end-
users have their additional channels for reporting complaints posted on their websites.
„Miedziowe Centrum Zdrowia” S.A.
Within the company, the person responsible for day-to-day communication with patients and handling of requests is the
Representative for Patients’ Rights. Information about this role, including contact details, is available on the facility's website.
In addition, there are information boards in the company's individual units and organisational units containing basic contact
details and information on the Representative.
Patients are offered standard forms of contact, such as a personal visit, telephone contact, mail correspondence and e-
mails. In addition, a dedicated contact form is available on the company's website allowing for the submission of comments
and requests.
PGU companies
Contact with consumers and end users is ongoing. These include face-to-face interviews with employees, telephone
contacts and email communication. In Uzdrowiska Kłodzkie S.A. - Grupa PGU, a helpline and an online notification channel
has been made available for submission of complaints or comments concerning products.
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In the company Uzdrowiska Kłodzkie S.A. - Grupa PGU, as part of the implemented ISO 9001 standard, a procedure is in
place to regulate handling of complaints and claims. Complaints are considered by designated suitably qualified persons,
complaint registers are maintained and procedures provide for requesting and implementing remedial action for legitimate
complaints.
However, no direct formal evaluation process has been implemented to determine whether consumers and end-users are
aware of the opportunity to express their concerns or needs and to what extent these are addressed. Despite the absence
of this process, companies have a Code of Ethics and an anti-abuse procedure in place that provides protection against
retaliation for those who make comments. Any negative comment addressed to the companies is taken as an opportunity
to improve the standard of services provided. There has never been a situation where a consumer or end user has suffered
consequences for raising their needs or concerns.
[S4-4] Addressing the significant impacts on consumers and end users and applying approaches to manage material
risks and opportunities related to consumers and end users and the effectiveness of these actions
"Miedziowe Centrum Zdrowia" S.A. and the spa companies belonging to Polska Grupa Uzdrowisk sp. z o.o. make the utmost
effort to secure the personal data of consumers and end users in the best possible way. Data management and processing
have been adapted to the provisions of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April
2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of
such data, and repealing Directive 95/46/EC (GDPR).
Companies prioritise IT security, protecting data from loss, misuse, unauthorised access and disclosure. The companies
have appointed Data Protection Officers and the implemented GDPR and privacy policies include a description of actions
for managing this potential impact.
The companies monitor regulatory developments and any potential GDPR-related incidents on an ongoing basis and
without a defined closed timeline, ensuring a high level of regulatory compliance. There have been no cases of leakage of
personal data from entities owned by the above companies in recent years. In addition, neither "Miedziowe Centrum
Zdrowia" S.A. nor the spa companies belonging to Polska Grupa Uzdrowisk sp. z o.o. have reported any serious human
rights issues or incidents related to their consumers or end-users.
The possible loss of sensitive medical data of patients or clients from the "MCZ" S.A. facilities and spa companies belonging
to the PGU could lead to serious legal and reputational consequences. A violation of data protection legislation in such a
case would result in imposing financial penalties and a loss of trust of both patients and the general public. With the GDPR
regulations implemented and cyber security solutions in place, including the protection of hospital and spa IT systems, the
Group assesses the risk of an incident as low.
The real positive impact on the health of patients and spa patients concerns 'MCZ' S.A. and the PGU-owned spas.
„Miedziowe Centrum Zdrowia” S.A.
The company's activities focus on the comprehensive and highly specialised provision of healthcare needs for the people
of the Copper Belt region. Mission accomplishment: "Your health is our business. A satisfied patient is our best
advertisement." is based on advanced diagnostic and treatment procedures, with a concomitant emphasis on effective
management of human and technical resources.
The priority is to take action to ensure a high standard of medical services, effectively manage significant corporate risks
and take advantage of opportunities to improve the quality of services. For information on cooperation on the impact on
consumers and end-users, see section S4-2 Cooperation processes in the scope of impacts with consumers and end users.
The plans for 'MCZ' S.A.'s activities taking into account the positive impact on patients' health are based on the existing and
expanded range of services provided, while maintaining their high quality. Key activities in this area include:
− Ensuring the sustainability of health services in the Copper Belt region, based on comprehensiveness, breadth and high
quality of services provided.
− Implementing the financial management strategy to ensure that funds are available for the development and efficient
operation of 'MCZ' S.A.
− Maintaining the financial stability of 'MCZ' S.A. as a key priority in both the short and long term.
− Systematic monitoring and analysis of patients' needs in the region, taking into account their expectations.
− Active attracting of patients by expanding the range of services provided by highly qualified medical staff.
− Expanding the range of services in the post-paid, outpatient and inpatient businesses while aiming to diversify revenue
streams.
− Optimisation of the terms of contracts concluded with the National Health Fund in order to effectively manage
resources and provide health services.
− Increasing the revenue generated from primary care and specialised outpatient treatment, relating to the National
Health Fund.
− Seeking to increase the productivity of the assets held.
− Modernisation of medical and technical infrastructure to bring it up to current standards and norms.
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− Cooperation with scientific and research units to verify the application of modern technologies in the treatment and
diagnostic process.
− Implementation of projects/activities for the benefit of stakeholders in accordance with the CSR strategy adopted by
KGHM Polska Miedź S.A..
− Maintaining accreditation certificate for further years of operation.
In particular, as regards Occupational Medicine, there are plans to expand the scope of periodic examinations for selected
occupational groups. The new proposals include diagnostics for cancer and exposure to harmful substances, including stool
testing for occult blood by FIT, low-dose computed tomography of the lungs (NDTK) with 'Calcium Score' assessment,
determination of total arsenic concentrations, speciation testing of arsenic and its metabolites and analysis of urinary
cadmium and nickel levels, mammography.
Particular emphasis has been placed on the implementation of the FIT testing program, which aims to increase the
availability of diagnostics, improve the reporting of screening tests and increase their effectiveness. The initiative is in line
with the National Cancer Strategy 2020-2030 and is an important element of colorectal cancer prevention.
There are also plans to introduce a compulsory FIT test for people over 45, repeated every three years. It is estimated that
the use of this method will reduce the number of indications for colonoscopy threefold, which could significantly contribute
to reducing queues for this examination. FIT currently remains the most effective method of colorectal cancer prevention,
making it a key tool in health prevention strategies.
PGU companies
As part of their activities, PGU companies are continually developing accommodation, treatment and food facilities, and
expanding the range of treatment services and products, including, among others, treatment of the musculoskeletal and
visual organs, balneological treatment, the possibility of purchasing mud, brine. These activities are carried out on a
continuous basis, with care taken to gradually introduce new services. The activities of the PGU companies focus on hiring
and systematically training staff, with the appropriate education and the right to practise their profession.
As part of quality management, Uzdrowiska Kłodzkie S.A. - Grupa PGU implemented appropriate procedures for dealing
with adverse events, as well as procedures for corrective or improvement actions. Each case of non-compliance is analysed
on an individual basis, and actions to eliminate irregularities are documented and verified for their effectiveness.
In order to reduce the risks arising from influences and dependencies on consumers and end users, companies regularly
review and update their procedures, implement new, more efficient solutions, and provide training for employees.
Improving service standards for consumers and end-users is done through regular staff training and upgrading and
refurbishing facilities. The investments implemented are aimed at improving the quality of services provided and attracting
new commercial customers.
"Miedziowe Centrum Zdrowia" S.A. and the spa companies belonging to Polska Grupa Uzdrowisk sp. z o.o. have not
specified the resources allocated to the management of their material impacts due to the need to protect information of a
strategic and confidential nature. At the same time, companies ensure the transparency of their material impact
management activities by publishing information that allows stakeholders to qualitatively assess the effectiveness of the
management actions taken, without the risk of breaching the confidentiality of individual companies.
[S4-5] Goals related to managing significant negative impacts, enhancing positive impacts and managing significant
risks and opportunities
The materiality analysis showed two areas of impact: the potential loss of sensitive personal data and the actual positive
impact on the health status of patients and patients at selected Group companies, with no identified significant risks or
opportunities related to consumers and end-users. None of the five companies have set targets for managing significant
negative impacts or increasing positive impacts. The companies did not formally engage with consumers, end-users or their
representatives in setting targets, monitoring their achievement or identifying improvements, and activities in these areas
are based on ongoing analysis of the situation and adapting existing procedures to circumstances and regulatory
requirements. As part of the ongoing update of the KGHM Polska Miedź S.A. Group's strategy and its planned
operationalisation, it is envisaged that this approach may be reviewed.
4.4 BUSINESS CONDUCT
4.4.1 [G1] Business conduct
[G1-1] Business conduct policies and corporate culture
No direct business conduct policy has been defined in the Group. Consequently, it is not possible to identify specific actions
and targets. Existing documents only partially cover the issues covered by such a policy, but they have not been drafted in
such a way as to set clear objectives, measures or timetables for the actions required by the Standard. Consequently, their
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designation would be unjustified and inconsistent with the actual state of management of this area in the Company. On
the other hand, there are a number of documents whose scopes partly cover the issue in question.
The Group has implemented the Anti-Corruption Management System in accordance with ISO 37001. Its scope of operation
covers both KGHM Polska Miedź S.A., the supervised organisations of KGHM Polska Miedź S.A. (subsidiaries) and
cooperating business partners. Supervisory measures in the area of corruption risk were determined on the basis of the
risk assessment carried out for the individual entities of the Group.
The key regulations in force in the Company and implemented within the Group are approved by decisions of the
Management Board of KGHM Polska Miedź S.A. Documents developed for the KGHM Group, at the stage of their
preparation, are submitted to the appropriate advisory body (the Council of the KGHM Group), whose opinion may be taken
into account in the final decisions of the Management Board of KGHM Polska Miedź S.A. On the basis of the normative act,
the Management Board of KGHM Polska Miedź S.A. orders all or selected Management Boards of Companies to implement
the policy/procedure/other type of normative act into their structure in a form that takes into account the characteristics
of the companies concerned.
The Company has a systematic approach to the formation and development of its corporate culture, based on its defined
values, mission and applicable standards. These are underpinned by formal documents such as the Code of Conduct and
the Code of Ethics, which define standards of behaviour towards employees, business partners and stakeholders and set
the direction for the organisation.
Periodic reviews of the codes are carried out as part of ensuring the validity and relevance of the applicable rules.
Organisational culture is promoted through consistent communication of values and ethics to a wide range of stakeholders,
including employees, contractors and supply chain participants. The company's values are communicated through various
channels, such as the website, onboarding materials, industry events, training and daily business practices. An important
role in promoting corporate culture is played by employees who, through their attitudes and the way they interact with
stakeholders, help to perpetuate it.
The Company's mechanisms for assessing and updating its corporate culture documents enable them to adapt to the
changing business environment and applicable regulations and standards. These reviews take into account both the
internal needs of the organisation and external requirements from international standards. The Company monitors and
assesses the risk of violations of accepted ethical standards, including the risk of corruption, responds to incidents and
implements adequate adaptation measures to mitigate the risk. It conducts quarterly internal audits of processes for
compliance with accepted standards and norms.
Table 197. Key policies and procedures with respect to business conduct functioning in the KGHM Polska Miedź S.A.
Group.
Anti-corruption policy
Establishes basic principles and standards to ensure compliance with the applicable anti-corruption
regulations and voluntary anti-corruption commitments in the jurisdictions in which the KGHM Group
operates. The Group applies a zero tolerance policy towards corruption and bribery. The Policy contains a
declaration of full commitment by the senior management to activities related to the maintenance and
continuous improvement of the implemented Anti-corruption Management System compliant with the
requirements of the PN-ISO 37001 standard.
Procurement Policy
The aim of the Procurement Policy is to establish the overarching principles that should be followed by all
participants of the procurement process in the KGHM Polska Miedź S.A. Group, as well as the general
regulations of this process. The Policy sets forth supervisory measures mitigating the risk of irregularities
in the procurement process.
Responsible Supply
Chain Policy
Its purpose is to ensure that only responsible suppliers are selected and to ensure that goods and services
purchased by the KGHM Group do not contribute to the financing of terrorism. Moreover, it aims to ensure
that goods and services are produced or provided with respect for fundamental human rights, labour
standards, environmental protection and in accordance with anti-corruption principles.
Competition law policy
The aim is to create a functional framework for the system that will ensure compliance with competition
law and will be applicable in all countries in which the KGHM Group operates. Accordingly, the KGHM Group
undertakes to conduct its competitive activities in the markets in a manner consistent with applicable laws
and ethical principles, and to prevent, prevent and detect violations in accordance with the relevant legal
regulations.
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Table 198. Regulations related to the Anti-corruption Management System (SZDA) in place in KGHM Polska Miedź S.A.
KGHM/ ZSZ/ SZDA/P-10
Corruption risk
management
The aim of the procedure is to ensure that the performance of all the business processes in the KGHM
Group complies with the adopted Anticorruption Policy and to ensure that Corruption Risk Management
is a continuous process which guarantees an adequate level of monitoring and improvement of the
efficacy of the adopted means of supervision. The procedure sets out the Corruption Risk Management
framework to effectively address all corruption risks.
Significant elements of the procedure include:
− Defining the responsibility and powers in the entire scope of Corruption Risk Management,
− Linking the Anti-Corruption Action Management System to Corruption Risk Management,
− Performing the corruption risk assessment in processes
− Conducting due diligence of candidates and staff
− Defining the rules for introducing means of supervising the anti-corruption area
− Raising awareness and implementation of anti-corruption training for employees
KGHM/ ZSZ/ SZDA/P-11
Handling activities of
corruptive nature
The aim of the procedure is to ensure compliance of activities and processes performed by persons
working for or on behalf of entities from the KGHM Group with the adopted Anticorruption Policy. These
regulations apply to all employees and representatives of KGHM Group entities and are a key element in
maintaining high ethical standards and compliance with applicable anti-corruption laws.
Significant elements of the procedure include:
− Basic anti-corruption principles, including the prohibition of all corruption behaviour
− Rules of conduct in contacts with public officers, counterparties and other stakeholders,
− Handling conflicts of interest to ensure transparency and avoid situations that may lead to
corruption
− Dealing with business gifts, setting out the rules for accepting and giving gifts in an ethical and anti-
corruption context
− Principles for dealing with situations of corruption, including cases of attempted undue advantage
− Consequences of non-compliance with principles of anti-corruption procedure
KGHM/ZSZ/SZDA/P-12
Management of
corruption risk
management related to
supervised organisations
and business partners
The aim of the procedure is to ensure that within the Corruption Risk Management referring to obtained
risk assessment results means of supervision will be applied to give an effective response to threats facing
the Supervised Organisations and Business Partners.
The procedure also aims to ensure the implementation of the Anti-Corruption Policy in Supervised
Organisations and to define the regulations that must be implemented and applied by these
organisations. In addition, it includes rules for managing the risks associated with Business Partners.
Significant elements of the procedure include:
− Assessment of the corruption risks faced by KGHM Supervised Organisations
− Supervisory measures referring to corruption risk pertaining to the Supervised KGHM Organisations,
− Verification of compliance and effectiveness of supervisory measures applied by the Supervised
KGHM Organisations,
− Internal audits of the Management System for Anti-Corruption Activities (SZDA) carried out in the
Supervised Organisations of KGHM
− Internal audits of implemented and applied systems and/or solutions regarding corruption risk
management in the Supervised KGHM Organisations performed by KGHM Polska Miedź S.A.,
− Review of the compliance and effectiveness of Corruption Risk Management / AMS,
− Due diligence analysis with reference to business partners,
− Standard supervisory measures with reference to business partners,
− Procedure in the event of donations and sponsorship.
Issues of business conduct and corporate culture are also included in external regulations that have been implemented at
KGHM Polska Miedź S.A., such as The Copper Mark certificate obtained by the smelters of KGHM, as well as ISO standards
in the areas of environmental, energy, business continuity, anti-corruption, health and safety and information security
management.
In addition, there is an internal document in the Group called "Resolution on the obligations of KGHM Group companies
with respect to the verification of external counterparties", which puts into operation the Verification Procedure in
purchasing, sales and investment processes.
Candidates applying for work in the KGHM Group are acquainted with the contents of the Code of Ethics and Anti-
Corruption Policy at the recruitment stage via the eRekrutacja portal. Every new employee is required to be familiar with
the contents of the key Policies and undergoes mandatory training, which they acknowledge by making a declaration.
Employees also participate in regular training (every 3 years) on ethics and anti-corruption.
In addition, the Company introduces anti-corruption clauses in its contracts with Business Partners, whereby it provides
them with a Code of Ethics and an Anti-Corruption Policy, obliging them to familiarise themselves with its content and
comply with the provisions contained therein.
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The Company's key policies, such as, the Responsible Supply Chain Policy, the Anti-Corruption Policy and the Code of Ethics,
are available on the corporate website and intranet, as well as distributed and made available in physical form in all Group
business units.
The KGHM Group's Responsible Supply Chain Policy addresses the key impacts, risks and opportunities associated with
managing the supply chain in an ethical and sustainable manner. The document introduces clear rules and standards of
behaviour, eliminating the lack of transparency of rules and unacceptable behaviour among office workers and employees
on the move. All employees in the Group are required to comply with ethical standards, which contributes to standardising
rules of conduct and reducing unethical practices.
The policy also sets out expectations of contractors, indicating that suppliers must respect human rights, anti-corruption
and care for the environment. Failure to comply with these requirements results in an organisation's exclusion from the
supply chain. The document also partly addresses expectations of the social environment, by emphasising the importance
of relations with local communities and the protection of indigenous peoples' rights.
One of the main risks that the policy seeks to minimise is the failure to adhere to established principles and standards of
ethical conduct within the Group. To prevent this, the Group has implemented a supply chain management system that
includes audits, risk assessment and mechanisms for identifying non-compliance. The transparency and effectiveness of
the policy is reinforced by a risk-based approach to vetting suppliers and taking corrective action when breaches are
detected.
The KGHM Group's Responsible Supply Chain Policy plays a key role in managing important sustainability issues, focusing
on ensuring the highest standards of business ethics, respect for human rights, environmental protection and anti-
corruption. The company stresses that the selection of responsible suppliers is fundamental to running a sustainable
business and expects all business partners to adhere to the same standards.
The policy addresses the main risks and impacts, eliminating potential risks associated with unethical supply chain
practices. It includes, among other things, a ban on cooperation with entities involved in forced labour, corruption, money
laundering, environmental degradation and other human rights violations. The controls and cooperation rules in place are
designed to exclude organisations from the supply chain that act in a manner contrary to international standards of
business responsibility.
The main objectives of the policy include ensuring that the Group's operations and its contractors comply with ESG
standards, protect natural resources and local communities and minimise the negative environmental impact of mining
and smelting activities. The policy also seeks to eliminate suppliers who do not comply with ethical standards and to ensure
transparency throughout the supply chain.
The process of monitoring policy implementation is based on five key stages:
− Establishing a supply chain management system that includes management structures, communication mechanisms
and control systems.
− Identification and assessment of risks by analysing suppliers' compliance with accepted standards.
− Development of a strategy to respond to identified risks, including corrective actions and monitoring mechanisms.
− Conducting independent, external audits to assess the effectiveness of the policies implemented.
− Reporting of supply chain test results to ensure transparency and compliance with regulatory requirements.
The scope of the policy covers all the Group's activities, including all its suppliers and contractors. There are no exemptions
in the document and its assumptions apply at all levels of the organisation and throughout the value chain - both upstream
and downstream. The policy also addresses specific stakeholder groups, covering employees, suppliers, customers and
local communities that may be affected by the Group's activities.
The implementation of the policy is formally the responsibility of KGHM's Management Board, which controls compliance
with responsible supply chain standards and makes decisions on the acceptance or exclusion of counterparties.
The policy refers to international standards and initiatives, including:
− OECD Guidelines for a Responsible Mineral Supply Chain,
− LBMA guidelines for responsible sourcing of gold and silver,
− Joint Due Diligence standard for copper and lead sourcing.
It is generally available to all stakeholders, including employees, suppliers and business partners. The Group provides
communication channels for comments on the supply chain and the document can be obtained, among other things, by
contacting by e-mail at dedicated addresses for the various supply areas.
The Anti-Corruption Policy of the KGHM Group is a key element in ensuring transparency and ethical management of the
organisation, responding to potential influences, risks and opportunities associated with anti-corruption activities. The
document clearly defines the rules of conduct, eliminating the lack of clarity in rules and unacceptable behaviour by
employees. The policy also clarifies expectations of counterparties, indicating that suppliers and customers of the KGHM
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Group are committed to the same high ethical standards. On the other hand, it does not directly address the rules and
expectations of the social environment.
One of the key risks that the policy addresses is the failure to adhere to established principles and standards of business
conduct. The mechanisms in place, such as the whistleblowing system, whistleblower protection and disciplinary
proceedings, are designed to minimise these risks and ensure that the organisation's actions comply with applicable laws.
The main assumptions of the policy are based on the principle of zero tolerance for corruption, the aim of which is to
eliminate all activities that may violate the standards of business ethics in preventing corruption. Employees, co-workers,
suppliers and customers are obliged to adhere to the principles of integrity in business relations, which include the
prohibition of offering, accepting or soliciting any undue advantage.
The top management of the KGHM Group demonstrates full commitment to the implementation of the policy and its
continuous improvement in accordance with the PN-ISO 37001 standard. The policy places particular emphasis on
eliminating conflicts of interest and providing protection mechanisms for whistleblowers. Anyone with knowledge of an
incident that may bear the hallmarks of corruption is obliged to report it, and their identity and safety are protected from
retaliation. In the case of confirmed violations, disciplinary proceedings are triggered and, if there is a breach of the law,
the matter is reported to the relevant state authorities.
The scope of the policy covers the entire KGHM Group, including all employees, collaborators, suppliers and customers.
The document provides no exemptions and applies to all areas of the organisation.
The implementation of the policy is the responsibility of the Management Board of KGHM, which appoints persons to act
in an independent and impartial manner to ensure anti-corruption compliance. The policy refers to the PN-ISO 37001
standard.
The document is publicly available, appearing on the website and at all physical locations of the companies.
The Procurement Policy of KGHM Polska Miedź S.A. is an important element in managing the actual and potential impacts,
risks and opportunities that may arise from the implementation of procurement processes. The policy sets out policies and
procedures that clearly define acceptable and unacceptable behaviour for employees, suppliers and other stakeholders.
At the same time, it counteracts the negative impact on the financial health of suppliers, especially small and medium-sized
enterprises, by setting clear rules for cooperation, defining payment deadlines and monitoring their implementation.
To mitigate the potential risks of working with suppliers who do not comply with business ethics, the policy emphasises
thorough vetting of potential contractors. This includes market research, risk analysis and checking compliance with
responsible environmental management principles. In addition, purchasing documentation and audit procedures help to
eliminate instances of supporting irresponsible supplier practices.
The Purchasing Policy also takes advantage of available opportunities, such as new technologies and IT systems to manage
purchasing processes. The introduction of integrated tools improves risk analysis, increases work efficiency and minimises
the potential for fraud. In addition, the procurement strategy takes into account the development of the potential of the
Group companies through the optimisation of their operations, support in obtaining funding and the assignment of clear
terms of reference.
The Procurement Policy of KGHM Polska Miedź S.A. sets out the principles for managing procurement processes in a
manner that ensures transparency, fair competition and protection of the Group's interests. Key aspects of this policy
include the standardisation of processes, optimisation of purchasing, safeguarding the company's strategic interests and
effective risk management. Ensuring the financial stability and security of the supply chain is also an important part of the
policy.
Another objective of the Purchasing Policy is to implement uniform principles for the organisation of purchasing processes
that guarantee optimum commercial conditions while maintaining high standards of quality and timeliness. The policy
seeks to improve financial efficiency by aggregating purchases, negotiating and monitoring key performance indicators. An
equally important objective is to minimise procurement risks and ensure the stability of strategic supplies and technologies.
The Purchasing Policy takes into account the impacts, risks and opportunities associated with purchasing processes. Key
impacts include ensuring financial stability and transparency of operations. Risks include restrictions on access to suppliers,
volatility of raw material prices and potential supply chain disruptions. On the other hand, opportunities arising from the
implementation of the policy include optimising purchasing processes, negotiating better commercial terms and increasing
the company's competitiveness in the market.
The implementation of the policy is monitored through systematic analysis and verification of its effectiveness. This process
includes the assessment of key performance indicators, the analysis of the correctness of the procurement processes by
the Procurement Process Security and Analysis Department and the verification of potential contractors by the Security
Department. The results of the analyses and recommendations are forwarded to the Chief Procurement Officer, who
oversees the implementation of the policy and reports the results to the Management Board.
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The scope of the Procurement Policy covers the entire KGHM Polska Miedź S.A. Group, regulating both central and local
procurement processes. The policy applies to all business units within the Group. The policy covers the value chain by
regulating relationships with suppliers and contractors.
There are some exclusions within the policy - the document does not apply to purchases of an assumed value.
Responsibility for the implementation of the policy rests with the Chief Procurement Officer, who acts as the overarching
supervisor for the implementation of the procurement processes.
The policy does not refer to third-party standards or initiatives. Information on the Procurement Policy is available on the
Company's corporate website.
The Competition Law Policy. The Competition Law Policy in the KGHM Polska Miedź S.A. Group is aimed at ensuring the
compliance of the organisation's activities with competition law regulations and maintaining high ethical standards in
business relations. This document sets out rules of conduct that eliminate the risk of unfair market practices, counteract
unethical behaviour and increase transparency in relations with trading partners.
One of the key challenges that the policy addresses is the lack of clarity of rules and expectations among employees,
suppliers and customers. This can lead to non-compliance with ethical standards, the risk of breaches of security
procedures or unfair practices in the Group's business sectors. The policy counteracts these risks through clearly defined
guidelines on relations with competitors, a prohibition on the exchange of sensitive information and the need to consult
the Competition Law Representative before entering into contracts if there are doubts about its content from a competition
law perspective. This structure eliminates the risk of misinterpretation of rules and enables effective management of
regulatory compliance.
The negative impact on the liquidity of suppliers, especially small and medium-sized enterprises, resulting from long
payment periods has been minimised thanks to the principle of transparency in cooperation and the guarantee of fulfilment
of obligations within the agreed deadlines.
The scope of the policy covers all the Group's activities, including all its employees and representatives. Responsibility for
the implementation of the policy lies with the Competition Law Representative of the KGHM Group, and monitoring of the
implementation of the policy is carried out through his supervision and the support of the Local Representatives in the
individual entities of the organisation.
The Competition Law Policy does not refer to third-party standards or initiatives. In case of doubts, contractors can contact
the Local Competition Law Representatives who can explain the Group's detailed rules.
Description of how the company establishes, develops, promotes and evaluates its corporate culture
The KGHM Code of Ethics is based on the values shared by the entire KGHM Group, such as safety, collaboration, results
orientation, responsibility and courage. The document also refers to the company's mission statement, which is “To always
have copper”, and includes a vision, understood as “the efficient use of resources to become a leader in sustainable
development”. The Code refers to three fundamental Ethical Standards: Company’s Good, Person’s Good, Stakeholder’s
Good.
The Code applies to all employees of the KGHM Group, irrespective of their position or place of work, including members
of the Management Boards, managers, leaders, as well as those acting on behalf of the Group. Compliance with the
principles of the Code is also expected of counterparties, customers and other entities cooperating with the KGHM Group.
KGHM Polska Miedź S.A. is constantly developing and strengthening employee awareness of important issues in the area
of business ethics, such as the protection of human rights, anti-corruption, corporate social responsibility, fair business
practices, environmental protection and sustainable development through training, a range of educational activities and
educational campaigns. The company indirectly assesses its corporate culture by analysing incidents involving violations of
ethical standards, human rights or anti-corruption policies. As a result, decisions can be made to take appropriate
adaptation measures.
Description of mechanisms for identifying, reporting and investigating concerns about illegal behaviour or
behaviour contrary to the code of conduct or similar internal rules
KGHM Polska Miedź S.A. is subject to legal requirements under national laws implementing Directive (EU) 2019/1937, i.e.
the Law on the Protection of Whistleblowers, with respect to the receipt and processing of whistleblower reports and the
protection of whistleblowers.
The mechanisms for identifying, reporting and investigating concerns about unlawful behaviour or behaviour contrary to
the code of conduct or other internal rules are described in section [S1-3] Processes for remediating the effects of negative
influences and channels for raising concerns through own staff resources.
The procedure on "Dealing with corrupt activities" specifies in detail how to deal with situations involving corrupt incidents.
In the event of an incident bearing the hallmarks of corruption, an ambiguous situation, an attempt to offer a benefit, a
corrupt offer or a reasonable suspicion of an employee's involvement in corrupt activities, the Ethics and Anti-Corruption
Representative shall conduct an analysis of the circumstances and causes of the incident. This process assesses the
situation and identifies potential organisational and legal changes to prevent similar situations in the future.
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There is also a Corporate Risk Management system in place in KGHM Polska Miedź S.A., which enables actions to be taken
in response to identified incidents. This process is described in detail in the document called Corporate Risk Management
Policy in the KGHM Polska Miedź S.A. Group. Its purpose is to identify, assess and analyse key risks and to develop a Risk
Response Plan and implement Adaptation Measures. This approach effectively mitigates risks, achieves business objectives
and supports the identification of opportunities, enabling the building of competitive advantage.
No anti-corruption policies in line with the United Nations Convention against Corruption are in force
Not applicable
Schedule for implementation of anti-corruption and anti-bribery policies consistent with the United Nations
Convention against Corruption
Not applicable
Disclosure of whistleblowing safeguards, including whistleblower protection
The measures adopted to ensure information security (integrity, confidentiality and availability), protection of personal data
and protection against retaliation in the process of handling reports are described in section [S1-3] Processes for
remediating the effects of negative influences and channels for raising concerns through own staff resources.
No whistleblower protection rules apply
Not applicable
Schedule for implementation of whistleblower protection policies
Not applicable
The entity commits to prompt, independent and objective investigation of business conduct incidents
In accordance with the internal regulations in force for the investigation of business conduct incidents, all investigations
are carried out only by authorised persons who meet the criterion of impartiality and who have the necessary qualifications
to guarantee that the investigations are carried out correctly and effectively. Internal procedures specify deadlines for
actions and impose an obligation to carry them out without undue delay.
The internal regulations also stipulate that the composition of the investigation team or the Ethics Committee must ensure
the impartiality and independence of the activities carried out. In the event that any member of the Commission or the
Panel has a business relationship or any other relationship with any of the parties to the case, he or she is required to
exclude himself or herself from the proceedings. In such a situation, the composition of the Commission or panel shall be
appropriately supplemented in order to guarantee the highest standards of objectivity and fairness in the proceedings.
Information on in-house training policies on business conduct
The Company's Internal Procedure "Corruption Risk Management" specifies that each Employee and Representative of the
Company (i.e. any entity or person representing, on any legal basis, any of the Organisational Units of KGHM, acting on
their behalf or for their benefit), in their dealings with Business Partners, state authorities and other interested parties, is
obliged to confirm that they are familiar with the Anti-Corruption Policy and the internal regulations on corruption risk
management. This commitment must be documented in the form of a written statement.
Each employee and Representative, no later than 30 days from the date of his/her employment or the commencement of
cooperation with an Organisational Unit in the KGHM Group, participates in a training course organised by the Ethics and
Anti-Corruption Representative. This training provides key information on corruption risks and the Group's approach to
managing these risks, including:
− Circumstances in which corruption may occur in connection with the duties performed, how to recognise the symptoms
of corrupt activities and key corruption risk indicators, how to prevent, avoid and respond to corrupt proposals or offer;
the potential consequences of corruption
− The role of employees in ensuring the effectiveness of the Corruption Risk Management/Anti-corruption Management
System and the benefits of its functioning for the Organizational Units and the entire KGHM Group
− The potential consequences of failing to comply with the requirements of the Corruption Risk Management/Anti-
corruption Action Management System and violations of the Anti-corruption Policy and internal anti-corruption
regulations
− Paths of submitting comments and concerns regarding the functioning of the Corruption Risk Management/Anti-
corruption Action Management System and suspected breaches of the Anti-corruption Policy and regulations as well as
the benefits of reporting suspected corruption.
The Ethics and Anti-Corruption Representative organises further training on this subject on a three-year cycle from the date
of the initial training. These training courses are mandatory and repeated at the same intervals.
Newly hired persons are also subject to mandatory training on the requirements of the Code of Ethics, conducted by the
Ethics and Anti-Corruption Representative of the respective KGHM Organisational Unit. Representatives are additionally
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obliged to carry out educational and communication activities aimed at building employee awareness of the ethical
standards in force in the KGHM Group.
Disclosure of functions most at risk of corruption and bribery
In accordance with current rules, in KGHM Polska Miedź S.A. there exist in individual Divisions Lists of positions and
functions which, due to the results of the corruption risk assessment analysis, require in-depth due diligence.
According to the Corruption Risk Assessment Procedure, when a risk is assessed as high or critical in a particular process
and, in addition, positions or functions are identified that may be associated with potential corrupt activities, due diligence
is required for:
− Candidates applying for these posts
− Personnel who already perform specific functions or who are to be entrusted with tasks related to processes with a
high risk of corruption
Mandatory due diligence is included in each Group entity's Ethics and Anti-Corruption Officer function (ultimately the Anti-
Corruption Officer).
[G1-2] Supplier Relationship Management
Responsibility for supplier relationship management in the KGHM Group has been divided into two key areas:
− Procurement of copper-bearing feedstock
− Relationships with other suppliers
Such a division makes it possible to effectively manage purchasing processes and build sustainable and transparent
relationships with business partners, taking into account the specific characteristics and requirements of each area.
Description of the policy to prevent late payment, especially for SMEs
In the Company, the Principles of Financial Management and the Economic System of KGHM Polska Miedź S.A. were
adopted, defining, among others, principles and terms of payment with suppliers. This document defines the Company's
internal economic and financial system, also covering the rules for making payments, including to small and medium-sized
enterprises (SMEs). These rules reflect the requirements under the provisions of the Act of 8 March 2013 on the prevention
of excessive delays in commercial transactions.
− Group companies are guided by the provisions of the aforementioned Act (or the relevant legal regulations in their
countries of operation) and, where applicable, by the provisions in individual contracts with their counterparties.
− Some subsidiaries in the Group have internal detailed regulations, such as, for example, the Standard Terms and
Conditions of Cooperation with Counterparties at KGHM Metraco S.A., which detail issues related to payment execution,
while remaining in compliance with statutory requirements.
For the international assets of the KGHM Group, payment management processes are adapted to local legal and
operational conditions:
− Companies located in the United States and Canada process payments in accordance with the internal guidelines
contained in the “Spending, Contracting & Signing Authorisation and Cash Disbursement policies”.
− DMC companies located in Canada and the United States process payments in accordance with the internal guidelines
contained in the “Spending, Contracting & Signing Authorization policy” and the “Procurement to Pay Procedures”.
− Companies located in Chile pay their suppliers according to an internal procedure called the “Accounts Payable Process”,
which complies with local regulation 21.131, which requires payment to suppliers within 30 days of receipt of an invoice.
Other exceptional deadlines are allowed, but they must not be shorter than 30 days.
− DMC Chile makes payment in accordance with the internal guidelines contained in the document “Integrated
Management System - Administration & Finance Procedure” and local regulation 21.131, which states that payment of
invoices must be made within 30 days of the date of the invoice, unless other terms are agreed between the parties.
The Group strives to comply with legal regulations on timely payment, supporting the financial stability of counterparties
and building long-term business relationships.
No formal policy dedicated to the prevention of payment delays has been adopted in the Group - it has been recognised
that the solutions currently in place in the Parent Entity and the companies offset the likelihood of payment delays.
Description of approaches to supplier relations, taking into account supply chain risks and sustainability impacts
The KGHM Polska Miedź S.A. Group has implemented a Responsible Supply Chain Policy, which aims to ensure compliance
with the highest standards of business and production ethics throughout the entire value creation chain. This policy is an
integral part of the Code of Ethics of the KGHM Group, which sets out the principles for a responsible approach to business
activities. The KGHM Group expects its suppliers to comply with the principles contained in the policy and reserves the right
not to enter into business relationships with entities that act in a manner inconsistent with the accepted rules.
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In order to ensure the highest possible standards of sourcing materials from conflict-affected and high-risk areas, KGHM
Polska Miedź S.A. has adopted a risk-based approach. This makes it possible to identify risks and high-risk business
relationships, implemented in accordance with international guidelines such as:
− OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
− LBMA Responsible Gold Guidance and LBMA Responsible Silver Guidance
− Criteria applicable to the Joint Due Diligence Standard for Copper, Lead, Nickel and Zinc implemented at KGHM's
Smelter Divisions, which is part of the industry standard The Copper Mark.
In addition, the Supply Chain Examination Procedure for Gold and the Due Diligence in Supply Chain Examination Procedure
for Copper and Lead were introduced at KGHM Polska Miedź S.A. These procedures ensure that raw material sourcing
processes are monitored and audited by independent third parties to systematically check compliance with normative and
regulatory requirements.
The Group’s Purchasing Policy covers the entire organization is described in disclosure section [G1-1] Business conduct
policies and corporate culture.
The Group conducts an ongoing supplier evaluation process in which appropriate adjustments are made to improve the
degree of compliance of individual bidders with KGHM's requirements regarding compliance with applicable ethical,
environmental and social principles.
This process involves parallel and complementary activities:
1. So-called reference visits by the Purchasing Department to key suppliers relevant to ensuring continuity of supply.
During these visits, direct confirmation is made of the conformity of the facts with the declarations made by
suppliers under the 'Contractor Charter', which is an annex to the Purchasing Policy. A report is produced from
each visit, including an assessment of the supplier and recommendations. These reports are also used in The
Copper Mark certification process.
2. Conducted by the Security Department, parallel to the reference visits, the process of verification and evaluation
of suppliers forms an integral part of purchasing, sales and investment procedures. This verification is obligatory,
and is carried out on the basis of a request from the functional units of the purchasing, trade or investment
divisions, prior to the start of cooperation.
Verification of the Security Department is carried out based on the "Procedure for Verification in Procurement, Sales and
Investment Processes in the KGHM Polska Miedź S.A. Group" and consists of:
− initiating verification on the basis of a request submitted by the relevant organisational units from the purchasing, trade
or investment divisions prior to the start of cooperation,
− analysing suppliers for potential cooperation risks,
− development of reports containing recommendations and the identification of possible 'red flags' that signal potential
risks arising from cooperation,
− forwarding the results of the assessment to the relevant departments for further business decisions.
The results of the verifications carried out by the Security Department are valid: two years for procurement processes and
one year for other types of cooperation.
In addition to the regulations adopted at Group-wide level, the individual Group companies have their own procedures,
which further shape the principles of supplier relations, taking into account the specifics of their industry. Depending on
the company, these may be more formalised documents, such as policies, processes, procedures, instructions or
regulations, or activities developed from long-standing relationships with counterparties that are not formally reflected in
company documentation.
Companies located outside Poland apply regulations adopted at Group level in matters of supplier relations, while taking
into account guidelines specific to the countries in which they operate.
Disclosure of whether and how social and environmental criteria are taken into account in the selection of supply-
side contractual partners
Currently, social and environmental criteria are not directly included in the supply-side Business Partner selection process
as contracting factors. The Procurement Policy in force at KGHM Polska Miedź S.A. does not require these criteria to be
applied during tender procedures.
In the area of purchasing, the key document that defines the responsibilities and expectations for Business Partners is the
Contractor’s Charter. Each supplier is required to accept the provisions of this document, which includes requirements for
adherence to ethical business practices. In the event of any breach of these principles or non-compliance with accepted
standards, KGHM Polska Miedź S.A. reserves the right to terminate cooperation.
The Contractor’s Charter is divided into three categories:
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− Business ethics and operations, including prohibition of corruption and paid patronage, conflict of interest,
environmental protection, product and quality responsibility, anti-money laundering and terrorist financing
− Human rights and labour standards, covering health and safety, prevention of forced and child labour, basic human
and worker rights
− Compliance, covering public tributes, sanction letters and conflict minerals
Some Group companies implement the Procurement Policy and detailed documents, adapting them to their organisational
structure, the subject of their activities and the applicable legal regulations. The selected companies do not include social
and environmental criteria in the selection process of Business Partners, taking them into account only in the later stages
of the bidding process, after considering economic issues.
Companies located in the United States do not consider social and environmental criteria when selecting Business Partners.
For Canadian companies, health, safety and environmental criteria are assessed during the contracting process. Companies
located in Chile, on the other hand, provide for sanctions as part of their purchasing process in the event of non-compliance
with policies and procedures related to health and safety, environmental protection and social issues.
[G1-3] Counteracting and detection of corruption and bribery
Description of procedures used in order to prevent, detect and respond to allegations or incidents related to
corruption and bribery
In order to comply with the most important principles related to the prevention of corruption in the KGHM Polska Miedź
S.A. Group, including domestic and foreign companies, an Anti-Corruption Management System was implemented in 2020
in accordance with the PN-ISO 37001:2017 standard. The decision was followed by a series of training workshops for
employees, including training for prospective internal auditors and Representatives on the Anticorruption Management
System in accordance with PN-ISO 37001:2017. In the Group, the Ethics and Anti-Corruption Representatives report
substantively to the Group Ethics and Anti-Corruption Representative and their activities are supervised by the Chief Safety
and Loss Prevention Representative in the CEO Division. The updated version of the regulations, as part of the improvement
of the Anti-Corruption Management System, also includes the implementation of a multi-member Anti-Corruption
Committee in place of the Ethics and Anti-Corruption Plenipotentiary in the Group, which will be responsible for overseeing
anti-corruption policies and monitoring the effectiveness of activities in this area and will at the same time ensure that the
members of the Committee are fully independent of possible anti-corruption events in the Group. The updated version of
the SZDA procedures depends on the timing of the entry into force of the second version of the ISO standard, but its
implementation should take place in the first half of 2025.
In connection with the implementation of the ISO 37001:2017 standard, in 2021 the KGHM Polska Miedź S.A. Group adopted
the new Anti-corruption Policy. In the years 2022-2024, following an analysis of the implemented and functioning solutions,
measures were furthermore taken to improve the system, taking into account the update of the standard planned for 2025.
The Anti-Corruption Policy is available to all Group employees both electronically and in hard copy, as well as on the
corporate website. It is also part of the agreements concluded with suppliers and business partners. Employees are
required to attend mandatory training courses that cover issues related to recognising corrupt activities, managing conflicts
of interest, and dealing with contacts with public officials. As part of the update of SZDA procedures, employees are also
covered by additional training, as well as periodic educational campaigns.
The basis for the Anticorruption Management System is Corruption Risk Management, which is based on identification and
assessment of corruption risks in individual processes pursued by Group entities. The adopted procedures also regulate
the process of corruption risk management in relation to Supervised Organisations and Business Partners. They define
detailed standards of handling activities of a corrupt nature, including conflict of interest, giving and accepting business
gifts, contacts with public officials or events that may constitute corrupt offers. They also define the responsibility for
violations of the provisions of the Anti-Corruption Policy. In line with the "prevention first" principle, the KGHM Group
manages the risk of corruption by implementing adequate supervisory measures. As part of the implemented SZDA,
compliance of the activities carried out by KGHM Group entities with the adopted Anti-Corruption Policy was ensured.
In the event of suspected corruption or bribery, incidents are immediately reported to superiors and to the Ethics and Anti-
Corruption Representative and further action is taken on the basis of legal analysis. If a breach of the rules is confirmed,
appropriate action is taken. The Representative is responsible for informing the appropriate service units so they can refer
the situation in question to legal analysis with regard to the legitimacy of a notification of potential criminal offence to be
submitted by the KGHM Organisational Unit. If this is deemed justified, the notification shall be made by the persons
authorised in this respect.
The most important anti-corruption policies and procedures are described in section [G1-1] Business conduct policies and
corporate culture.
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Ethics and anti-corruption training
All employees newly hired in KGHM Group entities are covered by training in the area of anti-corruption. At three-year
intervals, mandatory e-learning courses are also provided for all employees on the prevention of irregularities in the
company, standards for dealing with corrupt activities, including situations of conflict of interest, giving and accepting
business gifts, contacts with public officials or events bearing the hallmarks of a corrupt offer. In addition, in line with the
ongoing update of the SZDA procedures, employees occupying positions selected on the basis of the risk matrix for due
diligence are covered by additional training, implemented by the Ethics and Anti-Corruption Plenipotentiaries in the
organisational units at 1-year intervals. In addition, educational and information campaigns, competitions and publications
aimed at employees are organised every year. Regular training courses in the area of security and loss prevention, including
ethics and anti-corruption and conflict of interest, are also organised for employees of the security cells of Group entities.
In the years 2023-2024, meetings were held for employees of the Mining and Smelting Divisions in the form of anti-
corruption campaigns, during which the values that guide us in the KGHM Group were promoted; employees were also
made aware of the procedures in force. They were also able to practise scenarios of how to behave in corrupt situations.
The latest version of the mandatory e-learning course, the completion of which is certified both electronically, in the system
and by an issued certificate with a 3-year validity period, was also launched in 2024. Additional training on the requirements
of ISO 37001, training for internal auditors and leading the Anti-Corruption Management System according to ISO 37001 or
improvement workshops are also provided each year.
All employees, regardless of their position (including members of the Management Board and Supervisory Board), are
required to complete mandatory anti-corruption training covering the following topics:
− how to recognise the symptoms of corrupt activities
− how to deal with conflicts of interest
− how to give and receive business gifts
− what action to take when dealing with business partners
− how to deal with officials
− how to respond to corrupt solicitations or offers, and the possible consequences of corruption.
Functions most exposed to corruption and bribery risk
In accordance with current rules, in KGHM Polska Miedź S.A. there exist in individual Divisions Lists of positions and
functions which, due to the results of the corruption risk assessment analysis, require in-depth due diligence. In accordance
with the Corruption Risk Assessment Procedure, if the risk in a particular process is assessed as high or critical and positions
and functions have been identified which may be associated with potential corruption activities in this process, due
diligence analysis is required for candidates and personnel employed in these positions and/or functions. Mandatory due
diligence is included in each Group entity's Ethics and Anti-Corruption Officer function (ultimately the Anti-Corruption
Officer). It is not possible to clearly identify the categories of posts that are subject to due diligence due to the different
characteristics of each Division. These include data insiders, medical, labour, project managers, Chief Production
Preparation Engineers, Chief Technology Engineers, Chief Investment Engineer, Financial Control Managers, financial
settlement co-ordinators, Chief Energ-machinery Engineers and the like.
[G1-4] Incidents of corruption or bribery
The Anti-corruption Management System implemented in the Group, compliant with ISO 37001 is based on such regulations
as: KGHM/ ZSZ/ SZDA/P-10 Corruption risk management The procedure sets out the Corruption Risk Management
framework to effectively address all corruption risks.:
KGHM/ ZSZ/ SZDA/P-11 Handling activities of corruptive nature. The aim of the procedure is to ensure compliance of
activities and processes performed by persons working for or on behalf of entities from the Group with the adopted
Anticorruption Policy. Among the relevant elements of the procedure are, in addition to the basic anti-corruption rules, the
following: rules on cooperation with public officials, contractors and stakeholders, rules on accepting and giving business
gifts, procedures and instructions on conflicts of interest and in the event of the occurrence of corruption, and the
consequences of non-compliance with anti-corruption rules.
KGHM/ZSZ/SZDA/P-12 Management of corruption risk management related to supervised organisations and business
partners. The aim of the procedure is to ensure that within the Corruption Risk Management referring to obtained risk
assessment results means of supervision will be applied to give an effective response to threats related to Supervised
Organisations and Business Partners.
The aforementioned regulations, together with the Procedure for Receiving Internal Notifications of Violations of Law and
Follow-up Actions in the Group, define the paths to follow in the event of corruption incidents. If an incident occurs, it must
be recorded in the Corruption Incident Register, supervised by the Control, Anti-Fraud and Anti-Corruption Department.
No such incident has been recorded in 2024.
Preventive and educational activities
In order to raise awareness of anti-corruption, the KGHM Group conducts a number of preventive and educational activities,
including:
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− Anti-corruption training, both for new recruits and in the form of regular courses for all employees
− Education and information campaigns, including the publication of materials such as guides, articles, educational
videos, as well as the organisation of poster campaigns and events to promote ethical standards.
Regular training, information campaigns and the support of accessible educational materials are key elements in the
implementation of the anti-corruption policy and in building ethical awareness throughout the Group.
Effectiveness of Anti-Corruption Activities in 2024
The Group did not record any pending proceedings for violations of anti-corruption or anti-bribery laws in 2024.
Accordingly, no convictions or fines have been awarded in this type of case. This fact confirms the effectiveness of the anti-
corruption policies and preventive measures implemented and the Company's commitment to maintaining the highest
ethical standards and compliance with applicable regulations.
Management commitment and compliance with the PN-ISO 37001 standard
The top management of the KGHM Group confirms its full commitment to maintaining, developing and improving the Anti-
Corruption Management System, which has been designed and implemented in accordance with the requirements of the
PN-ISO 37001 standard. This system is an integral part of the Group's governance policy, supporting transparency initiatives
and the highest standards of ethics in the conduct of business.
[G1-5] Political influence and lobbying activities
Based on a dual materiality analysis, the sub-theme 'G1-5 - Political Influence and Lobbying Activities' was deemed not
relevant.
In the light of materiality of impact and financial materiality, the Group has no direct political influence, and therefore no
significant stakeholder impacts have been identified. According to the Political Parties Act of 27 June 1997 (Article 25), State
Treasury companies may not finance political parties, election campaigns or political activities. As such, and due to the
Group's policies and procedures, no significant impacts, risks or opportunities have been identified.
Thus, no financial or in-kind contributions of a political nature were made in 2024.
[G1-6] Payment practices
Payments with external entities are made by the Company in accordance with generally accepted legal regulations and on
the basis of internal regulations determined in the Principles of Financial Management and Economic System of KGHM
Polska Miedź S.A. Liabilities to suppliers are settled on the last day of the term specified in the payment terms of the
contract.
Delays in payments result mainly from decisions to withhold payments, in accordance with the terms of the contract and
instructions from the substantive unit of the division.
Withholding of payment occurs mainly when the counterparty has not provided the required contractual documents
necessary to launch the payment and is most often the result of lack of payment to the subcontractors executing the
contract.
Payment is made upon receipt of statements that all financial obligations to the contractor's subcontractors have been
settled.
Delays in payment are also due to incorrectly entered data in the financial and accounting system or the submission of a
document for payment after its due date. These situations have an impact on the determination of the payment term and
occur occasionally.
Typical payment terms set out in contracts are payment terms within 30 (mainly for SMEs) or 60 days of receipt of the
invoice. Due to the volume of operations, the time of payment of liabilities to the main material supplier by Mercus Logistyka
Sp. z o.o. also plays a significant role - in accordance with the agreement in force, a payment term of 14 days applies.
All invoices issued within the KGHM Polska Miedź S.A. Group were included in the analysis, excluding intra-group
transactions.
The following table provides key information on the KGHM Polska Miedź S.A. Group's payment performance. The metrics
shown in the table have not been validated by any external bodies other than the assurance provider. The average number
of days to pay an invoice was calculated on the basis of the date on which the liability arose (defined as the date on which
the invoice was issued or received, according to the terms of the contract and internal procedures) and the date on which
the invoice receivable was settled (paid).
377
Table 199. Key information on the KGHM Polska Miedź S.A. Group's payment performance.
Entity
Average number of days to pay an
invoice from the start of the
contractual or statutory payment
period
Payment percentage according to
standard payment terms
Number of legal proceedings
currently pending due to delays
in payment
KGHM Polska Miedź
S.A. Group
42
90.78%
5
KGHM Polska Miedź S.A. 378
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Translation from the original Polish version
USEFUL TERMS AND ABBREVIATIONS
Bearer shares
In accordance with the Polish legal system the term: "bearer shares" has a different meaning than "bearer
shares” (anonymous and unregistered shares facilitating illicit actions) eliminated from the market by
certain countries, e.g. in the UK. The obligatory dematerialisation of shares carried out in Poland in 2021
abolished the anonymity of all shareholders of joint-stock companies. The necessity to register bearer
shares makes it possible to identify each shareholder entitled to hold shares. The division into registered
and bearer shares has been upheld largely due to the legal tradition in Poland
BAT
(Best Available Technique)
Best Available Technique, as defined in Directive 96/61/EC, means the most effective and advanced stage
in the development of activities and their methods of operation which indicate the practical suitability of
particular techniques for providing in principle the basis for emission limit values designed to prevent
and, where that is not practicable, generally to reduce emissions and the impact on the environment as
a whole
BGP
Gas-Steam Blocks
BREF
“BAT REFerence document”, the reference document of best available techniques (BAT)
Total unit cost of producing
copper from own
concentrate
The sum of costs of mining, flotation, smelter processing per cathode and support functions (the Data
Center Division, the Mine-Smelter Emergency Rescue Division and the Head Office), together with cathode
selling costs, adjusted by the value of inventories of half-finished products and work in progress and less
the value of anode slimes, divided by the volume of electrolytic copper production from own concentrate
CRU
CRU Group, a London-based analytical company providing, among other things, business analytics and
advisory services, primarily in the mining, metals and fertiliser markets.
COMEX
The Commodity Exchange, Inc. a global commodity exchange with the head office in New York, focusing
on trading in derivatives (futures and options) on metals such as gold and silver, as well as copper,
aluminium, steel, molybdenum, zinc, lead and iron ore.
COPI
KGHM Polska Miedź S.A. Data Center Division
Net debt
Net Debt
The value of loans, borrowings, debt securities and leases payable less free cash and cash equivalents,
taking into account the impact of derivatives related to sources of external financing. Liabilities arising
from the use of financial instruments containing reverse factoring mechanisms are not included in this
category
OFE rod
Oxygen-free copper wire produced at HM Cedynia based on UPCAST technology
CSRD
Directive 2022/2464 of the European Parliament and of the Council on sustainability reporting (CSRD -
Corporate Sustainability Reporting Directive) published in the Official Journal of the EU on 16 December
2022.
Adjusted EBITDA
(Earnings Before Interest,
Taxes, Depreciation and
Amortisation)
Profit on sales plus depreciation/amortisation recognised in profit or loss and recognition/reversal of
impairment losses on non-current assets.
EE TGE YA
Electricity price on the Warsaw Power Exchange (TGE) in delivery for the next calendar year (YA - Year
Ahead)
Electrorefining
The process of electrolising dissoluble anodes which are produced from refinable alloys. During this
process refined metal is collected on starter sheets under controlled conditions, while contaminants
remain in the electrolyte as solids or liquid
ESRS
(European Sustainability
Reporting Standards)
European Sustainability Reporting Standards issued in the form of Commission Delegated Regulation (EU)
2023/2772. The regulation entered into force and is applicable from 1 January 2024.
Fed
The Federal Reserve System, customarily referred to as the Federal Reserve, abbreviated to Fed - the
central bank of the United States.
Pillar (mining)
An unremoved mass of rock in an underground mine used to support the ceiling against collapse
Flotation (ore enrichment)
A stage in the process of breaking down ore into fragments of varying composition of useful elements
which exploits differences in the degree of wettability of individual mineral grains. Well-wetted minerals
fall to the bottom of the flotation tank, while the poorly-wetted grains (those whose wettability
additionally decreases due to the action of so-called collecting agents, e.g. xanthates) collect at the surface
of the froth created from froth-inducing agents
FOMC
The Federal Open Market Committee, the body within the Federal Reserve System (Fed) responsible for
shaping the monetary policy, overseeing US open market operations and setting money supply targets.
KGHM Polska Miedź S.A. 379
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Translation from the original Polish version
(The Federal Open Market
Committee)
TTF MA gas
European wholesale TTF (Title Transfer Facility) gas price for Month Ahead (MA) gas futures.
Group
KGHM Polska Miedź S.A. Group
HM
Metallurgical plant/ smelter
INE
Shanghai International Energy Exchange, a subsidiary of the Shanghai Futures Exchange, allowing trading
in futures and options on crude oil, copper, low-sulphur fuel oil and rubber.
ISO
International Organization for Standardization
JRGH
KGHM Polska Miedź S.A. Mine-Smelter Emergency Rescue Division
Senior management
Top management level in the organisation of the entity (Management Board, Supervisory Board)
Management staff
Managers of individual units or departments of the organisation, including the senior management and
the middle management staff.
Copper cathodes
The basic form of electrolytically-refined copper; the product of electrolytic copper refining
Copper concentrate
The product of enriching low-grade copper ore
Cost of producing payable
copper (C1)
Unit cash cost of producing payable copper, reflecting ore mining and processing costs, transport costs,
the minerals extraction tax, administrative expenses during the mining phase and smelter treatment and
refining charges (TC/RC) less by-product value. C1 cost is in regard to payable copper in own concentrate
in the case of the segment KGHM Polska Miedź S.A. and payable copper in end products of individual
mines of the segment KGHM INTERNATIONAL LTD. and the segment Sierra Gorda S.C.M.
Mineral
Raw material of economic significance extracted from the ground e.g. coal, oil, salt, metal ores
CCC
Act of 15 September 2000, Commercial Partnerships and Companies Code (Journal of Laws no. 94, item
1037, as amended)
LBMA
London Bullion Market Association, the precious metals industry association responsible for setting the
main standards in the silver and gold market.
LME
London Metal Exchange, the world's largest non-ferrous metals exchange, which allows trading in futures
and options on various commodities. It provides the global benchmark for metal prices and plays a key
role in international trade.
Payable metal
Volume of metal produced less the loss incurred in further processing to pure metal
Electrolytic copper
The product of electrolytic copper refining
NBP
National Bank of Poland
Flotation tailings
Waste remaining after the ore enrichment process
OPEC+
A broader agreement that comprises members of OPEC (Organisation of Petroleum Exporting Countries)
and additional oil-producing countries that have agreed to work with OPEC to regulate the supply of oil
on global markets.
TSF
Tailings Storage Facility
Time perspective
The perspective and defined time for the implementation of a particular action The following assumptions
are made :
− short-term perspective - covers a period of up to 2 years
− medium-term perspective - covers a period of 2 to 5 years
− long-term perspective - covers a period of more than 5 years
Mobility policy
The Policy on International Mobility in the KGHM Polska Miedź S.A. Group setting out the principles for
the transfer of employees seconded from one entity of the KGHM Polska Miedź S.A. Group to another
entity of the KGHM Polska Miedź S.A. Group with its registered head office in another country.
Invention Regulations
Internal document of the Company defining the principles and procedures for the consideration and
remuneration of project applications, the acquisition by KGHM of rights to use projects and the acquisition
of rights to obtain Exclusive Rights.
YoY
year on year, i.e. comparison between one year and the next year
REACH
Registration, Evaluation, Authorisation and Restriction of Chemicals - regulation issued by the European
Parliament and of the Council (EU) on the safe use of chemicals through their registration and evaluation,
and in certain cases through the issuance of permits and restrictions in the sale and use of certain
chemicals
WTI crude oil
WTI (West Texas Intermediate) crude oil, a type of crude oil originating in the USA. It serves as one of the
main international price benchmarks for crude oil (alongside Brent and Ural).
KGHM Polska Miedź S.A. 380
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Translation from the original Polish version
Ore
Rock which contains one or more useful elements. Ore can be monometallic (containing a single metal)
or polymetallic (containing more than one metal)
Sell-side
A term used in the financial services industry designating the provision of securities sales services by
entities such as investment banks, brokerage houses or market makers.
SHFE
Shanghai Futures Exchange, one of the main futures exchanges in China, trading financial instruments
based on metals (e.g. copper, aluminium, zinc), including precious metals, energy products or rubber.
Barren rock
Rock which accompanies the extraction of mineral ore and is not considered as useful
SMR
(Small Modular Reactor)
Small modular nuclear reactor technology
Pre-precious metals credit
unit cost of electrolytic
copper production from
own concentrate
The sum of costs of mining, flotation, smelter processing per cathode and support functions (the Data
Center Division, the Mine-Smelter Emergency Rescue Division and the Head Office), together with cathode
selling costs, adjusted by the value of inventories of half-finished products and work in progress divided
by the volume of electrolytic copper production from own concentrate. Indicator used solely in the Parent
Entity
SX-EW
(solvent extraction and
electrowinning)
Copper cathode production technology applied in some plants of KGHM INTERNATIONAL LTD. based on
solvent extraction (the process of leaching useful minerals using a solvent) of the copper ore heap, with
the aid of diluted sulphuric acid, under the atmospheric conditions
Electrolytic copper refining
technology
A process involving the electrolytic refining of metal, in this case copper. The periodic removal of portions
of the electrolite is required to maintain the level of contaminates at an acceptable level, which is the one
of decisive factors determining the quality of electrolytically-refined copper. The contaminated electrolyte
and slimes are used as the raw materials in the recovery of some of the metals accompanying the copper,
such as silver, gold, selenium and nickel
Silver smelting and
electrolytic refining
technology
Comprised of: batch preparation (the mixture of batch elements followed by drying); the smelting of Doré
metal and the casting of anodes (melting of the batch in a Kaldo furnace to remove slag or gasify
impurities followed by casting of the product [99% silver] into anodes); silver electrorefining (forming into
cathodes containing a min. 99.99% silver); melting in an electric induction furnace and the casting of
refined silver into commercial form (billets or granules)
TPM
(Total Precious Metals)
Precious metals (gold, platinum, palladium)
Troy ounce
(t oz)
A unit of measure mainly used in English-speaking countries. The troy ounce (abbreviated as oz) is
universally used in jewellery and precious metals commerce. 1 troy ounce equals 31.1035 grams
Muck
Rock removed from a mine face. Contains both ore and barren rock
Copper wire rod
Drawn copper rod, usually with a diameter of 6-12 mm, universally used as a starting material in the cable
industry
Mine excavation
Open area left after the mining work
LTIFRKGHM indicator
(Lost Time Injury Frequency
Rate)
Indicator of the number of accidents at work (as defined in Poland) in the Company KGHM Polska Miedź
S.A., standardised to 1 million worked hours
TRIR indicator
(Total Recordable Incident
Rate)
Indicator of the number of accidents at work meeting the conditions of registration as defined in the
ICMM (International Council on Mining & Metals) standard, standardised to 200 000 worked hours
WTR
Tilting-Melting-Refining Furnace
ZG
Mines
Green transformation
Action to increase the use of renewable sources for energy production
Deposit/Orebody
Natural collection of minerals in the earth, arising as a result of various geological processes
Concentrators Division
Concentrators Division
KGHM Polska Miedź S.A. 381
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Translation from the original Polish version
List of tables
Table 1. Equity investments of KGHM Polska Miedź S.A. .................................................................................................................................... 11
Table 2. Mergers of companies within the KGHM Polska Miedź S.A. Group. .................................................................................................. 11
Table 3. Equity investments of an indirect subsidiary - Polska Grupa Uzdrowisk sp. z o.o. ......................................................................... 12
Table 4. Equity investments in international assets ............................................................................................................................................ 12
Table 5. Loans granted to international companies ............................................................................................................................................ 13
Table 6. Description of the business model of the KGHM Polska Miedź S.A. Group ..................................................................................... 15
Table 7. Value-creating capitals of the KGHM Polska Miedź S.A. Group .......................................................................................................... 16
Table 8. Key achievements in individual strategic development directions .................................................................................................... 33
Table 9. Status of progress on realisation of strategic success ratios - level in 2024 .................................................................................... 34
Table 10. Factors fostering the development of the KGHM Group..................................................................................................................... 37
Table 11. Development constraints for the KGHM Group .................................................................................................................................... 37
Table 12. Main assumptions of Budget 2025, realisation of the assumptions of Budget 2024 .................................................................... 38
Table 13. Risk category – Market, in the Risk Model of the KGHM Polska Miedź S.A. Group ......................................................................... 58
Table 14. Areas of credit risk in the Risk Model of the KGHM Polska Miedź S.A. Group ................................................................................. 60
Table 15. Risk category – Liquidity risk in the Risk Model of the KGHM Polska Miedź S.A. Group ................................................................ 61
Table 16. Shareholder structure of the Company as at 31 December 2024 and as at the date of signing of this report ........................ 61
Table 17. Key share price data of the Company on the WSE, .............................................................................................................................. 63
Table 18. List of brokerage houses preparing analytical reports on KGHM Polska Miedź S.A. ..................................................................... 65
Table 19. Significant contracts for the Company and Group ............................................................................................................................... 66
Table 20. Material proceedings pending before courts, arbitration bodies or public administration bodies ............................................ 67
Table 21. Expenditures of KGHM Polska Miedź S.A. and the Group on the support of culture, sport, charitable institutions, media,
social organisations, trade unions, etc. (PLN million) ........................................................................................................................... 68
Table 22. Key operational and financial indicators by operating segments in 2024 ....................................................................................... 69
Table 23. Market conditions significant for the operations of the KGHM Polska Miedź S.A. Group - average prices ............................... 72
Table 24. Production by the Group ........................................................................................................................................................................... 73
Table 25. C1 cost of producing payable copper in the Group, including mining taxes (USD/lb) ................................................................... 74
Table 26. Financial results of the Group (in PLN million) ...................................................................................................................................... 75
Table 27. Main factors impacting the change in profit or loss of the Group ..................................................................................................... 76
Table 28. Cash flow of the Group (PLN million) ...................................................................................................................................................... 77
Table 29. Consolidated assets (PLN million) ............................................................................................................................................................ 78
Table 30. Consolidated equity and liabilities (PLN million) ................................................................................................................................... 79
Table 31. Net debt structure of the Group (in PLN million) .................................................................................................................................. 80
Table 32. Net debt structure of the Parent Entity (PLN million) .......................................................................................................................... 80
Table 33. Sources of financing in the Group ........................................................................................................................................................... 81
Table 34. Amount of borrowing available and drawn by the Group (in PLN million) ...................................................................................... 82
Table 35. Net debt / EBITDA of the Group ............................................................................................................................................................... 82
Table 36. The most significant loans granted by Group companies as at 31 December 2024 ...................................................................... 83
Table 37. Loans granted by the Parent Entity and Group companies in 2024.................................................................................................. 83
Table 38. Mine production.......................................................................................................................................................................................... 85
Table 39. Metallurgical production ........................................................................................................................................................................... 86
Table 40. Sales volume of basic products of KGHM Polska Miedź S.A. .............................................................................................................. 87
Table 41. Revenues from contracts with customers of KGHM Polska Miedź S.A. (PLN million) .................................................................... 87
Table 42. Expenses by nature of KGHM Polska Miedź S.A. (PLN million) ........................................................................................................... 88
Table 43. Financial results of KGHM Polska Miedź S.A. (PLN million) ................................................................................................................. 90
Table 44. Main factors impacting the change in profit or loss of KGHM Polska Miedź S.A. ........................................................................... 90
Table 45. Cash flows of KGHM Polska Miedź S.A. (PLN million) ........................................................................................................................... 91
Table 46. Assets of KGHM Polska Miedź S.A. (PLN million)................................................................................................................................... 92
Table 47. Equity and liabilities of KGHM Polska Miedź S.A. (PLN million) .......................................................................................................... 93
Table 48. Structure of expenditures on property, plant and equipment and intangible assets of KGHM Polska Miedź S.A. (PLN million)
........................................................................................................................................................................................................................ 94
Table 49. Production of KGHM INTERNATIONAL LTD............................................................................................................................................ 96
Table 50. Volume and sales revenues of KGHM INTERNATIONAL LTD. (USD million)..................................................................................... 96
Table 51. Sales revenues of KGHM INTERNATIONAL LTD. (PLN million) ............................................................................................................ 96
Table 52. C1 payable copper production cost of KGHM INTERNATIONAL LTD. ............................................................................................... 97
Table 53. Key factors affecting the change in the level of expenses by nature in relation to 2023 .............................................................. 97
KGHM Polska Miedź S.A. 382
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Translation from the original Polish version
Table 54. Financial results of KGHM INTERNATIONAL LTD. (USD million) ......................................................................................................... 98
Table 55. Financial results of KGHM INTERNATIONAL LTD. (PLN million) ......................................................................................................... 98
Table 56. Key factors impacting the change in financial result of KGHM INTERNATIONAL LTD.................................................................... 98
Table 57. Cash expenditures of KGHM INTERNATIONAL LTD. (USD million) .................................................................................................... 99
Table 58. Cash expenditures of KGHM INTERNATIONAL LTD. (PLN million) ..................................................................................................... 99
Table 59. Production of copper, molybdenum and precious metals by Sierra Gorda S.C.M. ........................................................................ 99
Table 60. Sales volume and revenues of Sierra Gorda S.C.M. ........................................................................................................................... 100
Table 61. Cost of sales, selling costs and administrative expenses and production cost of payable copper (C1) of Sierra Gorda S.C.M. .
...................................................................................................................................................................................................................... 100
Table 62. Key factors affecting the change in the level of expenses by nature as compared to 2023 ....................................................... 101
Table 63. Results of Sierra Gorda S.C.M. in USD million (on a 100% basis) ..................................................................................................... 101
Table 64. Results of the segment Sierra Gorda S.C.M. proportionally to the interest held (55%) in PLN million ..................................... 101
Table 65. Main factors impacting the change in the financial result of the segment Sierra Gorda S.C.M. ................................................ 102
Table 66. Cash expenditures of Sierra Gorda S.C.M. ........................................................................................................................................... 102
Table 67. Revenues from contracts with customers of companies within the KGHM Group – excluding intra-segment revenues (in PLN
million) ........................................................................................................................................................................................................ 103
Table 68. Financial results of the segment – other segments (PLN million) .................................................................................................... 103
Table 69. Cash expenditures – acquisition of intangible assets and property, plant and equipment (in PLN million) ........................... 104
Table 70. The principles of Section I of DPSN 2021 applied in KGHM Polska Miedź S.A. - Disclosure policy and communication with
investors ..................................................................................................................................................................................................... 106
Table 71. Principles in section I of DPSN 2021 applied partially in KGHM Polska Miedź S.A........................................................................ 108
Table 72. Changes in the composition of the Management Board in 2024 and to the date of preparation of the report .................... 116
Table 73. Changes in the composition of the Supervisory Board in 2024 and to the date of preparation of the report ....................... 117
Table 74. Biograms of Members of the Supervisory Board ............................................................................................................................... 118
Table 75. Age structure and length of service of members of the Supervisory Board and the Management Board as at the date of the
report .......................................................................................................................................................................................................... 127
Table 76. Gender representation in the Management Board and the Supervisory Board as at 1 January 2024 ..................................... 127
Table 77. Gender representation in the Management Board and the Supervisory Board as at 31 December 2024 .............................. 127
Table 78. Diversity representation by gender in the Management Board and the Supervisory Board as at the date of the report ... 127
Table 79. The principles of Section II of DPSN 2021 - Management Board, Supervisory Board, applied in KGHM Polska Miedź S.A. . 127
Table 80. Principles in section II of DPSN 2021 applied partially or not applied in KGHM Polska Miedź S.A. .......................................... 128
Table 81. The principles of Section III of DPSN 2021 - Internal systems and functions, applied in KGHM Polska Miedź S.A. ................ 129
Table 82. Principles of Section III of DPSN 2021 not applicable to KGHM Polska Miedź............................................................................... 132
Table 83. General Meetings of Shareholders in 2024 and to the date of preparation of this report ......................................................... 133
Table 84. Shareholder structure of the Company as at 1 January 2024 and 31 December 2024 and as at the date of this report ..... 136
Table 85. The principles of Section IV of DPSN 2021 - General meeting, shareholder relations applied in KGHM Polska Miedź S.A. . 136
Table 86. Principles in section IV of DPSN 2021 not applied in KGHM Polska Miedź S.A. ............................................................................. 138
Table 87. The principles of Section V of DPSN 2021 - Conflict of interests and related party transactions applied in KGHM Polska Miedź
S.A. ............................................................................................................................................................................................................... 139
Table 88. The principles of Section VI of DPSN 2021 - Remuneration, applied in KGHM Polska Miedź S.A. ............................................. 140
Table 89. Potentially due remuneration of Members of the Management Board of KGHM Polska Miedź S.A. for 2024 ....................... 141
Table 90. Principles in section VI of DPSN 2021 applied partially or not applied in KGHM Polska Miedź S.A. .......................................... 143
Table 91. Information regarding the experience of individual members of the Management Board and Supervisory Board related to
the sectors, products and geographical location of the entity ......................................................................................................... 148
Table 92. Information on the composition and diversity of the administrative, management and supervisory bodies of KGHM Polska
Miedź S.A. as at 31 December 2024. ..................................................................................................................................................... 153
Table 93. The Management Board’s responsibility for the achievement of ESG goals - as at 31 December 2024. ................................. 156
Table 94. Management and strategic goals of members of the Management Board of KGHM Polska Miedź S.A. in terms of sustainable
development for 2024. ............................................................................................................................................................................ 158
Table 95. Basic elements of the due diligence process included in the sustainability reporting ................................................................ 159
Table 96. Description of the business model of the KGHM Polska Miedź S.A. Group ................................................................................... 161
Table 97. Issues of sustainable development as part of the Strategy of the KGHM Polska Miedź S.A. Group to the year 2030 with an
outlook to 2040. ........................................................................................................................................................................................ 162
Table 98. Status of progress of strategic success ratios - level in 2024 ............................................................................................................ 162
Table 99. Significant groups of products offered, markets serviced and customer groups in the KGHM Polska Miedź S.A. Group.... 164
Table 100. Key products of the KGHM Polska Miedź S.A. Group and their carbon footprint compared to industry averages ............... 165
Table 101. Position of companies and customer groups in the key value chain of the KGHM Polska Miedź S.A. Group ......................... 167
Table 102. Current and expected benefits for key stakeholder groups ............................................................................................................. 172
KGHM Polska Miedź S.A. 383
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Translation from the original Polish version
Table 103. Map of Key Stakeholders of the KGHM Polska Miedź S.A. Group in 2024 ..................................................................................... 174
Table 104. Channels of communication with selected key stakeholders ......................................................................................................... 174
Table 105. List of material impacts, risks and opportunities considered by the administrative and governing bodies in 2024 ............. 177
Table 106. Significant impacts and opportunities and their links with the strategy and business model ................................................... 191
Table 107. Risk associated with the environmental factor ................................................................................................................................... 212
Table 108. Risk associated with the social factors .................................................................................................................................................. 216
Table 109. Risk associated with the corporate governance factors .................................................................................................................... 216
Table 110. Key aspects related to KGHM's impact on the environment and society....................................................................................... 218
Table 111. Analysis of the impacts, both positive and negative, of KGHM's activities by stage in the value chain .................................... 218
Table 112. Time perspectives used in the analysis ................................................................................................................................................ 219
Table 113. Acute physical risk related to sudden weather events resulting from climate change. .............................................................. 220
Table 114. Transition-related climate risk ................................................................................................................................................................ 222
Table 115. ESRB 2 horizontal standard. General disclosures ............................................................................................................................... 238
Table 116. ESRS E1 thematic standard - Climate change ...................................................................................................................................... 239
Table 117. ESRS E2 thematic standard - Pollution .................................................................................................................................................. 239
Table 118. ESRS E3 thematic standard - Water and marine resources .............................................................................................................. 239
Table 119. ESRS E4 thematic standard - Biodiversity and ecosystems ............................................................................................................... 239
Table 120. ESRS E5 thematic standard - Use of resources and circular economy ........................................................................................... 240
Table 121. ESRS S1 thematic standard - Own Staff Resources ............................................................................................................................ 240
Table 122. ESRS S2 thematic standard - Workers in the value chain .................................................................................................................. 241
Table 123. ESRS S3 thematic standard - Affected communities .......................................................................................................................... 241
Table 124. ESRS S4 thematic standard - Consumers and end users .................................................................................................................. 241
Table 125. ESRS G1 thematic standard - Business conduct .................................................................................................................................. 241
Table 126. The list of activities in 2024 qualified for the taxonomy on the basis of the legal regulations cited at the outset includes the
following activities: ................................................................................................................................................................................... 245
Table 127. Activities recognised as compliant in 2024: ......................................................................................................................................... 246
Table 128. Percentage share of turnover in products or services related to Taxonomy-eligible economic activity in 2024 ................... 250
Table 129. Percentage share of capital expenditure in products or services related to a Taxonomy-compliant economic activity in 2024
...................................................................................................................................................................................................................... 252
Table 130. Percentage share of operating expenditure from products or services related to Taxonomy-compliant economic activity in
2024. ............................................................................................................................................................................................................ 254
Table 131. Taxonomy disclosure: Turnover - Template 1 Activities related to nuclear power and natural gas. ........................................ 258
Table 132. Taxonomy disclosure: Turnover - Template 2 Taxonomy-compliant economic activity (denominator) ................................. 259
Table 133. Taxonomy disclosure: Turnover - Template 3 Taxonomy-compliant economic activity (numerator)...................................... 260
Table 134. Taxonomy disclosure: Turnover - Template 4 Taxonomy-eligible but taxonomy non-compliant economic activity ............. 261
Table 135. Taxonomy disclosure: Turnover - Template 5 Taxonomy non-eligible economic activity ........................................................... 262
Table 136. Taxonomy disclosure: Capital expenditures - Template 1 Activities related to nuclear power and natural gas. ................... 263
Table 137. Taxonomy disclosure: Capital expenditure - Template 2 Taxonomy-compliant economic activity (denominator) ............... 264
Table 138. Taxonomy disclosure: Capital expenditure - Template 3 Taxonomy-compliant economic activity (numerator).................... 265
Table 139. Taxonomy disclosure: Capital expenditure - Template 4 Taxonomy-eligible but taxonomy non-compliant economic activity .
...................................................................................................................................................................................................................... 266
Table 140. Taxonomy disclosure: Capital expenditures - Template 5 Taxonomy non-eligible economic activity ...................................... 267
Table 141. Taxonomy disclosure: Operating expenditure - Template 1 Activities related to nuclear power and natural gas. ............... 268
Table 142. Taxonomy disclosure: Operating expenditure - Template 2 Taxonomy-compliant economic activity (denominator) .......... 269
Table 143. Taxonomy disclosure: Operating expenditure - Template 3 Taxonomy-compliant economic activity (numerator) .............. 270
Table 144. Taxonomy disclosure: Operating expenditure - Template 4 Taxonomy-eligible but taxonomy non-compliant economic
activity ......................................................................................................................................................................................................... 271
Table 145. Taxonomy disclosure: Operating expenditures - Template 5 Taxonomy non-eligible economic activity ................................ 272
Table 146. Energy consumption and energy mix in the KGHM Polska Miedź S.A. Group [MWh] ................................................................. 279
Table 147. Energy intensity based on net revenue [MWh/PLN million] ............................................................................................................. 279
Table 148. Quantitative reconciliation of revenue to consolidated financial statements ............................................................................... 280
Table 149. Values of GPW100 global warming factors for the greenhouse gases analysed .......................................................................... 280
Table 150. Scope 1, 2, 3 greenhouse gas emissions in KGHM Polska Miedź S.A. in 2024 [t CO
2
e] ................................................................ 281
Table 151. Scope 1, 2, 3 greenhouse gas emissions in KGHM Polska Miedź S.A. in 2024 [t CO
2
e] ................................................................ 282
Table 152. Intensity of greenhouse gas emissions in the KGHM Polska Miedź S.A. Group ............................................................................ 283
Table 153. CO
2
emission factors for electricity and heat purchased in 2024 for the needs of the KGHM Polska Miedź S.A. Company 284
KGHM Polska Miedź S.A. 384
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Table 154. CO
2
emission factors for electricity and heat purchased in 2024 by KGHM Polska Miedź S.A. And the domestic companies ...
...................................................................................................................................................................................................................... 285
Table 155. CO
2
emission indicators for electricity purchased in 2024 by international companies ............................................................. 285
Table 156. Methodology and principles for determining Scope 3 greenhouse gas emissions under the GHG Protocol for the KGHM
Group .......................................................................................................................................................................................................... 286
Table 157. Justification for exclusion from the Scope 3 emission category balance. ...................................................................................... 286
Table 158. Emissions indicators for 2024 related to purchased goods .............................................................................................................. 287
Table 159. Emissions factors for 2024 related to purchased services ................................................................................................................ 290
Table 160. Emission factors for 2024 from transport of purchased services.................................................................................................... 292
Table 161. GHG emission factors for business trips according to DEFRA .......................................................................................................... 295
Table 162. GHG emission factors for transport of materials according to DEFRA ........................................................................................... 297
Table 163. Key assumptions of environmental policy and actions taken in the scope of commitments. ................................................... 298
Table 164. List of installations operated by KGHM Polska Miedź S.A. Divisions that are subject to the obligation of reporting discharges
and transfers to the KRUiTZ .................................................................................................................................................................... 302
Table 165. List of installations operated by domestic Companies belonging to the KGHM Polska Miedź S.A. Group, subject to the
obligation to report discharges and transfers to the KRUiTZ ........................................................................................................... 303
Table 166. List of standards and methods for determining emissions of pollutants from installations of KGHM Polska Miedź S.A. subject
to the reporting obligation to the KRUiTZ ............................................................................................................................................ 306
Table 167. Pollutants emitted to air from installations belonging to KGHM Polska Miedź S.A. according to the European Pollutant
Release and Transfer Register in kg/year ............................................................................................................................................. 306
Table 168. List of standards and methods for the determination of emissions of pollutants into water ................................................... 307
Table 169. Pollutants emitted to water from installations belonging to KGHM Polska Miedź S.A. according to the European Pollutant
Release and Transfer Register in kg/year ............................................................................................................................................. 307
Table 170. Potentially hazardous substances in the KGHM Group in 2024 . ................................................................................................... 308
Table 171. SVHC substances in the KGHM Group in 2024 . ................................................................................................................................. 308
Table 172. Main assumptions of the policy related to water and marine resources ....................................................................................... 309
Table 173. Key issues related to water resources management ......................................................................................................................... 313
Table 174. Rules of water resources management ................................................................................................................................................ 314
Table 175. Water management in the KGHM Polska Miedź S.A. Group in 2024 .............................................................................................. 315
Table 176. Water absorption ...................................................................................................................................................................................... 315
Table 177. Rules of biodiversity management and ecosystem conservation ................................................................................................... 316
Table 178. Policy fundamentals related to resource use and the circular economy ....................................................................................... 322
Table 179. Input resources in the KGHM Polska Miedź S.A. Group in 2024 ...................................................................................................... 327
Table 180. By-products transferred to recipients in 2024 at KGHM Polska Miedź S.A. ................................................................................... 328
Table 181. Waste in the KGHM Polska Miedź S.A. Group in 2024 ....................................................................................................................... 330
Table 182. Forms of employee engagement and social dialogue in the KGHM Polska Miedź S.A. Group .................................................. 335
Table 183. Examples of projects and training that courses engaging employees in the implementation of their tasks by enhancing
expert competence:.................................................................................................................................................................................. 336
Table 184. Total number of employees broken down by gender in the KGHM Polska Miedź S.A. Group ................................................... 344
Table 185. Total number of employees broken down by type of employment (full-time or part-time) and by gender in the KGHM Polska
Miedź S.A. Group....................................................................................................................................................................................... 345
Table 186. Total number of employee resignations broken down by gender in the KGHM Polska Miedź S.A. .......................................... 345
Table 187. Number of permanent and temporary employees, total and broken down by gender, in the KGHM Polska Miedź S.A. Group
(S1-6 point 50b) ......................................................................................................................................................................................... 345
Table 188. Gender distribution by number and percentage in the top management in the KGHM Polska Miedź S.A. Group. .............. 346
Table 189. Age structure of employees in the KGHM Polska Miedź S.A. Group. .............................................................................................. 346
Table 190. Basic social protection regulations and tools in countries of the KGHM Group’s operation ...................................................... 346
Table 191. S1-13 - Average number of training hours by gender [2024] ........................................................................................................... 347
Table 192. Basic occupational health and safety metrics ..................................................................................................................................... 348
Table 193. Work and life balance metrics ................................................................................................................................................................ 348
Table 194. Pay gap, KGHM Polska Miedź S.A. Group ............................................................................................................................................. 348
Table 195. Notification channels for international assets of the KGHM Polska Miedź S.A. Group ............................................................... 358
Table 196. Characteristics of selected KGHM Group companies and their consumers and end-users ....................................................... 360
Table 197. Key policies and procedures with respect to business conduct functioning in the KGHM Polska Miedź S.A. Group. ........... 366
Table 198. Regulations related to the Anti-corruption Management System (SZDA) in place in KGHM Polska Miedź S.A. ...................... 367
Table 199. Key information on the KGHM Polska Miedź S.A. Group's payment performance. ..................................................................... 377
KGHM Polska Miedź S.A. 385
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
List of diagrams
Diagram 1. Organisational structure of KGHM Polska Miedź S.A. ............................................................................................................................ 8
Diagram 2. KGHM Polska Miedź S.A. Group structure as at 31 December 2024 ................................................................................................... 9
Diagram 3. KGHM INTERNATIONAL LTD. Group Structure as at 31 December 2024 ......................................................................................... 10
Diagram 4. Reporting segments of the KGHM Polska Miedź S.A. Group .............................................................................................................. 13
Diagram 5. Business model of the KGHM Polska Miedź S.A. Group ...................................................................................................................... 14
Diagram 6. Location of the production assets of the KGHM Polska Miedź S.A. Group ...................................................................................... 17
Diagram 7. Integrated geological, mining and metallurgical activities in KGHM Polska Miedź S.A. ................................................................. 23
Diagram 8. Simplified flowchart of the core business of the KGHM INTERNATIONAL LTD. Group.................................................................. 24
Diagram 9. Competitive advantages of the KGHM Polska Miedź S.A. Group ....................................................................................................... 29
Diagram 10. Mission, Vision and Development Directions of the Strategy of KGHM Polska Miedź S.A. ..................................................... 32
Diagram 11. Five Pillars based on five development directions in the Strategy of the KGHM Polska Miedź S.A. Group ......................... 32
Diagram 12. Corporate risk management process in the KGHM Polska Miedź S.A. Group........................................................................... 41
Diagram 13. Organisational structure of risk management in KGHM Polska Miedź S.A. ............................................................................... 43
Diagram 14. Risk categories in the Risk Model of KGHM Polska Miedź S.A. and their definitions ............................................................... 44
Diagram 15. Forecasts of real GDP growth per the International Monetary Fund from January 2025 versus previous forecasts. ....... 70
Diagram 16. COMPLY ratio by KGHM Polska Miedź S.A. .................................................................................................................................... 106
Diagram 17. Corporate governance structure in KGHM Polska Miedź S.A. .................................................................................................... 106
Diagram 18. Scope of competence of the President of the Management Board from 1 January 2024 to 31 July 2024. ........................ 110
Diagram 19. Scope of competence of the President of the Management Board from 1 August 2024 to 31 December 2024 and as at
the date of preparation of the Corporate Governance Statement ........................................................................................... 110
Diagram 20. Persons acting as the President of the Management Board in 2024 and up to the date of the report ............................. 110
Diagram 21. Scope of competence of the Vice President of the Management Board (Development) from 1 January 2024 to 31 July
2024. ...................................................................................................................................................................................................... 111
Diagram 22. Scope of competence of the Vice President of the Management Board (Development) from 1 August 2024 to 31
December 2024 and as at the date of the Corporate Governance Statement ....................................................................... 111
Diagram 23. Persons acting as the Vice President of the Management Board (Development) in 2024 and up to the date of the report
................................................................................................................................................................................................................ 111
Diagram 24. Scope of competence of the Vice President of the Management Board (Production) from 1 January 2024 to 31 July 2024.
................................................................................................................................................................................................................ 112
Diagram 25. Scope of competence of the Vice President of the Management Board (Production) from 1 August 2024 to 31 December
2024 and as at the date of the Corporate Governance Statement ........................................................................................... 112
Diagram 26. Persons acting as the Vice President of the Management Board (Production) in 2024 and up to the date of the report ....
................................................................................................................................................................................................................ 112
Diagram 27. Scope of competence of the Vice President of the Management Board (Corporate Affairs) from 1 January 2024 to 31 July
2024. ...................................................................................................................................................................................................... 113
Diagram 28. Scope of competence of the Vice President of the Management Board (Corporate Affairs) from 1 August 2024 to 31
December 2024 and as at the date of the Corporate Governance Statement: ...................................................................... 113
Diagram 29. Persons acting as the Vice President of the Management Board (Corporate Affairs) in 2024 and up to the date of the
report .................................................................................................................................................................................................... 113
Diagram 30. Scope of competence of the Vice President of the Management Board (Finance) from 1 January 2024 to 31 July 2024. .....
................................................................................................................................................................................................................ 114
Diagram 31. Scope of competence of the Vice President of the Management Board (Finance) from 1 August 2024 to 31 December
2024 and as at the date of the Corporate Governance Statement: .......................................................................................... 114
Diagram 32. Persons acting as the Vice President of the Management Board (Finance) in 2024 and up to the date of the report .... 114
Diagram 33. Scope of competence of the Vice President of the Management Board (International Assets) from 1 January 2024 to 31
July 2024. .............................................................................................................................................................................................. 115
Diagram 34. Scope of competence of the Vice President of the Management Board (International Assets) from 1 August 2024 to 31
December 2024 and as at the date of the Corporate Governance Statement: ...................................................................... 115
Diagram 35. Persons acting as the Vice President of the Management Board (International Assets) in 2024 and up to the date of the
report .................................................................................................................................................................................................... 115
Diagram 36. Composition of the Supervisory Board in 2024 and to the date of preparation of this report ........................................... 117
Diagram 37. Committees of the Supervisory Board of KGHM Polska Miedź S.A. in 2024 ............................................................................ 120
Diagram 38. Composition of the Remuneration Committee of the Supervisory Board in 2024 and to the date of this report ........... 121
Diagram 39. Tasks of the Remuneration Committee .......................................................................................................................................... 121
Diagram 40. Composition of the Strategy Committee of the Supervisory Board in 2024 and to the date of this report ...................... 122
Diagram 41. Tasks of the Strategy Committee ..................................................................................................................................................... 122
Diagram 42. Composition of the Audit Committee of the Supervisory Board in 2024 and to the date of this report ........................... 123
Diagram 43. Most important tasks of the Audit Committee.............................................................................................................................. 123
KGHM Polska Miedź S.A. 386
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Diagram 44. Structure of the KGHM Polska Miedź S.A. Group as at 31 December 2024 ............................................................................. 145
Diagram 45. Struktura Grupy Kapitałowej KGHM INTERNATIONAL LTD. na 31 grudnia 2024 r. ................................................................ 146
Diagram 46. Structure of the entity's administrative, management and supervisory bodies and the distribution of competence of the
Management Board Members, taking into account the areas of sustainability as at 31 December 2024. ....................... 147
Diagram 47. Business model of the KGHM Polska Miedź S.A. Group .............................................................................................................. 161
Diagram 48. Potential change in the level of impact of climate risk on KGHM by time horizon................................................................. 220
Diagram 49. Management of sustainable development risk............................................................................................................................. 232
Diagram 50. Categories of climate risk .................................................................................................................................................................. 235
Diagram 51. Main directions of decarbonisation ................................................................................................................................................ 278
Diagram 52. Water in the ore enrichment process (flotation) in KGHM Polska Miedź S.A. ......................................................................... 311
Diagram 53. Water in the electrolytic copper production process in KGHM Polska Miedź S.A. ................................................................. 313
Diagram 54. Distribution of valuable and protected natural elements ........................................................................................................... 317
List of charts
Chart 1. Geographical breakdown of global copper concentrates production in 2024 ................................................................................ 25
Chart 2. Structure of copper mined production by global producers in 2024 (Source: Wood Mackenzie) ............................................... 26
Chart 3. Structure of refined copper production by global producers in 2024 (Source: Wood Mackenzie) ............................................. 26
Chart 4. Geographical breakdown of refined copper production in 2024 ...................................................................................................... 27
Chart 5. Geographical breakdown of global refined copper consumption in 2024 ...................................................................................... 27
Chart 6. Geographical breakdown of global copper wire rod production in 2024 ........................................................................................ 27
Chart 7. Geographical breakdown of global wire rod consumption in 2024 .................................................................................................. 28
Chart 8. Chart 13. Geographical breakdown of global mined silver production in 2024 (source: Metal Focus – preliminary data, KGHM
Polska Miedź S.A.) ....................................................................................................................................................................................... 28
Chart 9. Geographic shareholder structure .......................................................................................................................................................... 62
Chart 10. Percentage change in the share price of KGHM Polska Miedź S.A. versus the WIG index and FTSE 350 mining indices
(compared to the price from the last WSE trading day in 2023) ........................................................................................................ 63
Chart 11. Change in commodity market price in 2024 (first versus last day of the year) ............................................................................... 70
Chart 12. Copper price (monthly averages) per the London Metal Exchange (in USD/t) ................................................................................ 71
Chart 13. Silver price (average monthly) per the London Bullion Market Association (in USD/oz t)............................................................. 72
Chart 14. USD/PLN exchange rate (monthly averages) per the National Bank of Poland .............................................................................. 72
Chart 15. Geographic structure of Group sales ...................................................................................................................................................... 74
Chart 16. Product structure of Group sales............................................................................................................................................................. 74
Chart 17. C1 cost curve (USD/lb) - C1 cost excluding mining taxes (Source: Wood Mackenzie Q42024, KGHM Polska Miedź S.A. own
work).............................................................................................................................................................................................................. 75
Chart 18. Change in profit/loss of the Group in 2024 (PLN million) .................................................................................................................... 76
Chart 19. Cash flows of the Group in 2024 (PLN million) ...................................................................................................................................... 77
Chart 20. Change in assets of the Group in 2024 (PLN million) ........................................................................................................................... 78
Chart 21. Change in equity and liabilities of the Group in 2024 (in PLN million) .............................................................................................. 79
Chart 22. Sales revenues of KGHM Polska Miedź S.A. by market (in PLN million) ........................................................................................... 88
Chart 23. Structure of expenses by nature in 2024 (excluding impairment losses on production assets) ................................................. 89
Chart 24. Cost of producing copper in concentrate – C1 (USD/lb) ...................................................................................................................... 89
Chart 25. Pre-precious metals credit unit cost of electrolytic copper production – from own concentrate (PLN/t) .................................. 89
Chart 26. Change in the financial result of KGHM Polska Miedź S.A. in 2024 (PLN million) ........................................................................... 91
Chart 27. Cash flows of KGHM Polska Miedź S.A. in 2024 (PLN million)............................................................................................................. 92
Chart 28. Change in assets of KGHM Polska Miedź S.A. in 2024 (PLN million).................................................................................................. 92
Chart 29. Change in equity and liabilities of KGHM Polska Miedź S.A. in 2024 (PLN million) ......................................................................... 94
Chart 30. Structure of expenditures on replacement in KGHM Polska Miedź S.A. .......................................................................................... 94
Chart 31. Structure of expenditures on maintenance in KGHM Polska Miedź S.A. ......................................................................................... 95
Chart 32. Structure of expenditures on development in KGHM Polska Miedź S.A. ......................................................................................... 95
Chart 33. Structure of expenditures on adaptation in KGHM Polska Miedź S.A. ............................................................................................. 95
Chart 34. Change in profit/(loss) for the period of KGHM INTERNATIONAL LTD. (USD million) .................................................................... 99
Chart 35. Change in profit/loss for the period (USD million) .............................................................................................................................. 102
Chart 36. Average employment in the KGHM Polska Miedź S.A. Group by geographical location ............................................................. 173
Chart 37. Projected emission reductions by direction - baseline option (t CO
2
e) .......................................................................................... 278
KGHM Polska Miedź S.A. 387
The Management Board’s Report on the activities of the Company and the Group in 2024
Translation from the original Polish version
Vice President
of the Management Board
Piotr Stryczek
SIGNATURES OF ALL MEMBERS OF THE MANAGEMENT BOARD
This report was authorised for issue on 25 March 2025.
President
of the Management Board
Andrzej Szydło
Vice President
of the Management Board
Zbigniew Bryja
Vice President
of the Management Board
Piotr Krzyżewski
Vice President
of the Management Board
Mirosław Laskowski
Vice President
of the Management Board
Iga Dorota Lis