KGHM Polska Miedź S.A.

ul. M. Skłodowskiej-Curie 48

59-301 Lubin

T +48 76 74 78 200

www.kghm.com

Dear Stakeholders,

2025 for the KGHM Group was a time of stable development and

of strengthening its position as one of a global leaders on the raw materials

market, one with a strategic significance for the Polish and European economies.

Despite demanding geopolitical conditions, KGHM achieved its budget targets,

which enabled the achievement of very good operating and financial results.

This confirms the effectiveness of the business processes in place and stands

as proof of the organisation’s resilience to volatile market conditions. Actions

of significance involved mitigating the impact of volatility in the prices of energy

raw materials and currencies, active management of contracting policy and

diversification of sales. Key areas of activity by KGHM include initiatives aimed

at improving efficiency and greater control of costs. The Costs Optimisation

Program brought tangible results and will be gradually implemented in the

companies of the Group.

In the past year, KGHM’s priority were projects aimed at strengthening operational

stability and ensuring the long-term development of the resource base.

The Company initiated the building of three new mine shafts in the Copper Basin

— investments needed to maintain production continuity in the current

concessioned areas and to ensure operational security in the coming decades.

It was also a period of intense dialogue with the public administration over

a change in the so-called copper tax formula. KGHM’s engagement in this process

led to the introduction, from January 2026, of a lower rate on the minerals

extraction tax, with a resulting positive impact on operations and an enhancement

of KGHM’s investment capacity.

An important element of the structure of the Group’s revenues, security and

operational stability are the international assets, while their further

development strengthens resilience to market turmoil, and at the same time

creates added value for Shareholders. The effective utilisation of their potential

had a positive impact on the results earned by the Group. The Sierra Gorda mine,

thanks to a visible improvement in its operational efficiency and costs

performance, covered its historic losses. As a result, the Company, for the first

time, recognised the value of the investment at the level of more than

USD 500 million. The independence gained by the international companies

in financing their activities, as well as their enhanced capacity to repay their

liabilities to KGHM substantially strengthens the Group’s position on the global

commodities market. This confirms the high competence of KGHM’s staff

in managing complex mining projects.

Stable and effective financing of development

In 2025 KGHM consistently strengthened its financial position, optimising

and adapting its financing structure to its investment needs. This strategic

approach to ensuring stable, flexible and long-term financing for the Group

enables the continuation of investments, maintains high financial liquidity and the

ability to act confidently in a dynamic market environment.

The Company issued series D bonds in the amount of PLN 1.6 billion, which at the

start of 2026 were introduced to trading on the Catalyst market. An element

ensuring financial stability and effectiveness was also the renewal of the long-term

syndicated credit facility in the amount of USD 1.5 billion. KGHM also engaged

in intensive work on obtaining additional funds for investment projects. The first

effect of this work is the signing in 2026 of an agreement with Bank Gospodarstwa

Krajowego for a loan from the funds of the National Recovery Plan to finance the

building of photovoltaic installations.

Development directions and key investments

In the past year, KGHM commenced investments of fundamental

importance for the Company’s future. The construction of three new shafts and

mine infrastructure in the Copper Basin is the largest enterprise in Polish mining

in years. It ensures KGHM’s production continuity in the currently licensed areas

and strengthens operational security in subsequent decades. Work

is simultaneously underway on building the surface infrastructure of the GG-1

shaft, currently the deepest mine shaft in Poland. KGHM will also continue building

the Victoria mine as well as discussions with partners regarding the possibility

of increasing the Sierra Gorda mine’s operational efficiency and its capacity

to earns revenues.

One of the key tasks KGHM is facing in coming quarters remains the

strengthening of corporate governance principles and increasing the business

efficiency of subsidiaries. The effectiveness of management processes is a critical

element in building a stable and effective organisation with ambitious

development plans.

Responsible and sustainable development

KGHM for years has conducted its activities with a respect for the principles

of sustainable development, combining production needs with a responsible

approach to the environment and local communities. One of the pillars of the

policy of KGHM is a commitment to dialogue and neighbourly relations.

The Company has been active in the Copper Basin, engaging in cooperation with

local governments to develop the region and the well-being of its inhabitants.

Nearly 1300 KGHM volunteers engaged in 2025 in 190 actions, devoting towards

this end more than 5000 hours. The KGHM Group also signed key agreements with

First Nations with respect to the Victoria project in Canada.

The energy transformation and diversification of energy sources remain

a key direction of the Company’s actions, while their speed of advancement

depends on the situation on the energy market, the availability of stable and

cost-effective technology, and on preferential financing sources. A part of these

actions are projects related to the circular economy concept. The Legnica Copper

Smelter and Refinery is preparing to transform itself into a modern recycling

facility, while the planned construction of the Scrap Turnover Plant and the

implementation of permanent starter sheet technology to produce cathodes will

enhance operational efficiency and will strengthen the security of supply of charge

materials in the long term. At the same time, KGHM is developing projects

to strengthen environmental safety, including as regards water management and

hydrotechnical infrastructure.

In this demanding environment, the KGHM Group maintained its position as one

of the largest producers of copper and silver in the world. The Company’s

advantage remains high quality and responsible production attested to by the

Copper Mark certificates. The carbon footprint of KGHM’s main products is lower

than the average of global indicators, which additionally strengthens our

competitiveness in relations with our customers and business partners.

The highest operating standards, transparency and dialogue build value,

as demonstrated by the presence of KGHM in prestigious, global industry lists,

including amongst the highest-rated mining companies in the world.

I wish to sincerely thank all of the KGHM Group’s Stakeholders who actively

participate in dialogue and support us in development. I wish to extend particular

thanks to our Employees – for their daily efforts, professionalism and

responsibility. It is precisely thanks to the competence and cooperation of the

entire Team that we are one of the key pillars of the Polish and European

economies. I am convinced that, thanks to the stable business foundations and

the joint efforts of the entire organisation that the KGHM Group is well prepared

to meet the challenges of the coming years and to strengthen our position on the

international market.

On behalf of the Management Board of KGHM Polska Miedź S.A. I hereby

present the Annual Report of the Company and of the KGHM Polska Miedź S.A.

Group for 2025, and I encourage you to review the presented results and

non-financial information.

Respectfully

Remigiusz Paszkiewicz

President of the Management Board

KGHM Polska Miedź S.A.