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Best practice and key achievements in the implementation of KGHM’s strategy

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In the Strategy implementation process, KGHM takes advantage of the best practices developed over years of experience. The Company ensures that the Strategy is comprehensive and complementary. It covers all of the Company’s activities and, for many years now, it has broadly addressed sustainable development and ESG topics.

Because of the dynamic changes in the macroeconomic environment that are strategically important for the copper mining, smelting and processing industry, KGHM has been performing comprehensive and regular analyses of its surroundings and identifying megatrends, while at the same time running its own internal reviews of the Business Strategy. On this basis, decisions are made to continue or refresh the accepted strategic assumptions. The whole organization is engaged in the process of operationalising the Strategy. KGHM uses a dedicated internal procedure to also monitor and oversee the Strategy implementation work through the lens of Strategic Programs, which are gradually implemented in successive periods. The Strategic Programs are aimed at achieving the key objectives of the KGHM Strategy and allow attention to be focused on the tasks that create the most value in the Company.

The Company’s business Strategy is a public document published on KGHM’s website. It is not common among companies in the mining and metallurgy sector globally. KGHM’s activities are transparent and, in addition to the separate business Strategy document, KGHM also publishes its progress in fulfilling the Strategy: key indicators in individual strategic areas and achievements within the Strategy. This practice is in line with the “Best Practice for GPW Listed Companies 2021”. The Strategy is not only generally available and described broadly in reports but also, where possible, it is also discussed dur ing meetings held with stakeholders (such as investors or the media).

In December 2021, three years had passed since the adoption of the KGHM Polska Miedź S.A.’s Updated Strategy for 2019-2023. This summary presents the key achievements of this period f rom the “4E” perspective.

Key achievements of KGHM Polska Miedź S.A.'S strategy for 2019-2023 efficiency

Our response to increase in competitiveness in the production and mining sector and Industry 4.0

  • Carried out investment activities to maintain domestic mining production at the level of 450 thousand tonnes of Cu in ore and the annual average metallurgical production at the level of 540 thousand tonnes, in accordance with the Strategic goals,
  • The Revolving-Casting-Refining (RCR) Furnace in the Legnica Copper Smelter and Refinery improved the division’s capacity to process materials purchased from third parties and increased the overall production capacity,
  • Energy reviews in all Divisions and the Head Office pointed to new areas for energy savings projects in accordance with the Energy Management System,
  • Built skills to develop the power engineering area, including RES (investments in photovoltaic power plants in Legnica Copper Smelter and Refinery, Głogów Copper Smelter and Refinery and the Obora Sandpit),
  • Increased the efficiency of tailings storage in the Żelazny Most Tailings Storage Facility expansion project, by building the Southern Quarter,
  • Used external sources to co-finance research and innovation projects,
  • Built an effective and diverse organisational culture based on the KGHM Group’s values,
  • Streamlined the Group’ structure, by ensuring a more efficient use of its potential from the viewpoint of the operation of the entire Group.
  • Maintained cost discipline and introduced saving initiatives.
  • Achieved higher efficiency of financing through diversification of its sources and adaptation of the financing to the needs of the Group.

We rely on electromobility, the development of pro-ecological regulations, the Circular Economy and pro-ecological production in accordance with the highest safety standards

  • Introduced smart solutions to enhance employee safety,
  • Implemented the same OHS procedures in the Group’s companies and divisions, including a uniform occupational safety management system for all assets of KGHM INTERNATIONAL LTD.,
  • Took numerous actions as part of the “Copper Heart” employee volunteerism program,
  • The Group paid taxes to the state budget and to local budgets,
  • Created development and training opportunities for employees, in the form of various training courses, development programs and HR projects,
  • Implemented new installations compliant with the BAT (Best Available Techniques) conclusions for the non-ferrous metals industry,
  • Made investments in renewable energy sources (RES), mainly development of photovoltaic plants,
  • Developed electromobility – electrical passenger cars and off-road vehicles are being tested; as part of the replacement of machinery resources, diesel engines in mining machines are being replaced with low-emission motors,
  • Extended the non-financial reporting area to ensure consistent internal and external communication in the Company.
  • Achieved high standards of active communication with the market and investors,
  • Developed standards and procedures allowing the Company to safely manage the situation related to the COVID-19 pandemic,
  • Supported the external environment in the fight with the pandemic.

We adapt our activities to changes in our environment

  • Ensured consistent management of the deposit and mining operations, adapting them to the geological structure,
  • Optimised metallurgical production – an RCR furnace in the Legnica Copper Smelter and Refinery, copper concentrate roasting installation (roasting furnace) in the Głogów Copper Smelter and Refinery,
  • Introduced a new financing structure, changing it from a short-term to a long-term one,
  • Consolidated procurement programs and digitalised logistics operations,
  • Ensured efficient planning and execution of overhaul downtimes,
  • Increased electricity production from our own sources,
  • Pursued the Implementation Doctorates program and other programs in cooperation with higher education institutions and research institutes and oriented towards improvement of the operation of the core production business,
  • Took measures to bridge generation and competency gaps, by carrying out the “Competent in the mining and metallurgical sector” program in cooperation with the Ministry of National Education,
  • Continuously broadened employee skills through adaptation and development projects.

We implement the idea of Industry 4.0., we are striving towards automation and robotisation of production, we are digitally transforming the KGHM Group, we are building a knowledge-based society

  • Developed the “Localization system of people and machinery in underground mines”,
  • Developed the “Broadband data transmission in underground mines” in the mining divisions,
  • Developed the “Centre of Advanced Data Analysis (CZAD)”: the application of algorithms to the analysis of belt conveyor loading in mines has been tested,
  • Developed the “Robotization of production and auxiliary processes”: started the construction of a CuXRF robot for scanning for copper content at the working faces in the mines,
  • Implemented projects associated with the National Cybersecurity System and improvement of the IT security of the Group,

 

  • Developed the Project Management System (PMS 2.0.),
  • Promoted digitization, automation and circulation of electronic documents and information in areas such as: administration, logistics, procurement, IT, legal service, data archiving, HR and payroll, communication and PR, contracts and agreements, finance management, properties,
  • Developed IT technologies for accumulating and transferring knowledge in the Group and archiving research and project documentation in the area of invention and patent proceedings in the 1959-2020 period.

Best practice

Lower Silesia is a global capital of innovation. In September 2021 KGHM organized the Masters&Robots Industry Edition.

Global trends and unique solutions, digitalization to develop industry and innovations supporting an ecological approach – these and other issues were taken up by renowned experts during the Masters&Robots Industry Edition. This prestigious event took place in the Aula Forum in Polkowice. To celebrate the company’s 60th anniversary KGHM invited innovation leaders to come to the Copper Basin centre. The copper giant emphasizes the importance of innovation for Polish industry, and the importance of Polish industry to create modern technological solutions. For years KGHM Polska Miedź S.A. has analysed and implemented innovative solutions in its activities in copper mining and across the organization. Industry 4.0 and its development are one of the company’s strategic objectives.

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