High production in Poland and a stable financial situation - KGHM presents its results for the first half of 2023

Financial and investment security - the KGHM Polska Miedź S.A. Group, given a volatile macroeconomic situation in global markets, maintained safe production and financial results in the first half of 2023. In the first half of this year, the KGHM Group consistently advanced its planned business operations, in accordance with the highest planned Capex in history.

“Thanks to effective management focused on efficiency and cost optimisation we are achieving our goals. This enables us, despite a difficult macroeconomic environment, to maintain a strong position on global markets, but also to take courageous investment decisions and to search for new business directions, as well as to build new shafts and a Salt Evaporation Plant in the Copper Basin. Thanks to a variety of mining-related actions undertaken, KGHM ensures raw material security for the country and is a pillar of the Polish economy,” said Tomasz Zdzikot, President of the Management Board of KGHM Polska Miedź S.A.

The President of KGHM emphasised that the Company benefits from long-term actions focused on developing the Group and guiding it through the turbulance on global economic markets.

Investments in the future

In accordance with budget assumptions, this year the Company plans to spend the highest amount on capital and equity investments in its history, while maintaining a safe equity, financial and operational condition. Investments in property, plant and equipment planned for 2023 by KGHM amount to PLN 3 250 million, while other investments amounted to PLN 2 129 million.

KGHM is consistently advancing its development plans, including the Deposit Access Program, under which the deepest mine workings in Poland were built: the GG-1 shaft at 1348 meters deep. This shaft in Kwielice is one of the most important investments in KGHM’s history and the largest underground project in the non-ferrous metals sector in Europe. In June the key break-through for this project was made, meaning connection of the shaft with the underground galleries of the Rudna mine.

The technical connection, meaning the breakthrough from the Rudna mine galleries to the GG-1 shaft, was made on 14 June 2023. Work is now underway there which will enable a new amount of fresh air to be supplied to the mines. This will greatly improve underground working conditions.

Work also commenced on the sinking of KGHM’s 32^nd shaft, GG-2. The shaft will be located in the vicinity of the village of Słone in the Copper Basin. Work has already begun on excavation for the headframe, carried out by a company in the KGHM Polska Miedź S.A. Group, PeBeKa S.A. Two of the three planned excavations are currently being developed. Geological research work is also underway by KGHM Cuprum Sp. z o.o.

In June KGHM announced that it will conduct a feasibility study for a modern Salt Evaporation Plant. This is a commercial and environmentally friendly investment project. It will reduce the salinity of KGHM’s process water and produce environmentally neutral water that is free of salt and contaminants. In addition, up to one million tons of evaporated salt will be produced annually, as well as nearly 70,000 tons of fertilizers for agriculture. Due to the availability of technical and power utilities, the saltworks are to be built at the Głogów Copper Smelter and Refinery.

KGHM continued work on preparing documentation for the Scrap Turnover Base in the Hybrid Legnica Smelter and Refinery Program as well as exploration projects in Poland and development projects in the international assets. Actions are also underway to increase energy production from own sources, including RES, projects related to solar and wind energy and hydrogen energy.

Transformation leader

The copper giant is also carrying out an energy development program, reducing the share of conventional energy and increasing the Company’s energy independence. This also involves investment plans related among others to the energy transformation. The Ministry of Climate and the Environment granted KGHM a substantive decision for the project to build a small modular reactor power plant (SMR) in Poland. At the same time, KGHM received official government acceptance for planned investments in accordance with the plans and concepts presented by the Company. 

In May 2023 KGHM commenced operation of a Process Gases Treatment Installation at the Legnica Copper Smelter and Refinery. This innovative facility virtually completely cleans the gases of mercury and arsenic, leaving only mainly nitrogen oxides, carbon dioxide, and a little sulfur dioxide. This is the first such facility in Poland and one of only a few in the world. The plant is another element of the BATAs Program successfully implemented by KGHM. The cost of the project is nearly PLN 120 million.

KGHM also ordered an analysis to be made of the environmental and carbon footprints of its products: cathodes, wire rod and Cu-OFE rod. The Mineral and Energy Economy Research Institute of the Polish Academy of Sciences (PAN) performed an analysis in compliance with ISO standards, and prepared environmental declarations. The copper products of KGHM have a footprint which is lower than the global average of such indicators.

Sector leader

KGHM has for years been amongst the world’s largest producers of copper and silver. In the ranking World Silver Survey 2023 KGHM remained in first place among the „world’s largest silver mines” and second place in the category „largest silver producers”.  The Company holds 8th place among the world’s largest copper producers, developing in line with the concept of sustainable development and international trends.

KGHM, as the only company from Poland, was ranked among the Carbon Clean200™ companies for the year 2022. Our Company was recognized, from among more than 6,000 global entities, for making the best efforts to protect the environment and counteract climate change. KGHM ranked 150th and generated 20.9% of so-called sustainable revenues in the amount of USD 3.5 billion.

Production results

Mined production of copper in concentrate by KGHM Polska Miedź S.A. amounted to 202.3 thousand tonnes and was higher by nearly 2 percent compared to the first half of 2022 (198.9 kt). Electrolytic copper production was at a similar level as in the corresponding period of 2022: 295.8 thousand tonnes (first half 2023) compared to 296.3 kt in the first half of 2022. Production of silver in concentrate amounted to 677.4 tonnes, being the best half-year result of KGHM since 2004.

Production of metallic silver in the first half of 2023 amounted to 699 tonnes (+31 tonnes compared to the first half of 2022) and was the highest for the comparable period since 2018.

Financial results

Revenues of the KGHM Polska Miedź S.A. in the first half of 2023 amounted to PLN 17 757 million. CAPEX execution rose by more than 21 percent.

The main reason for the volatility in metals prices was the war in Ukraine. KGHM, Despite the volatility in the energy commodities market, is fully capable of maintaining the continuity of the Core Production Business.