Together for the security of Poland's raw materials, KGHM and Lubelski Węgiel "Bogdanka" signed a letter of intent on cooperation

Plans for joint mining projects for raw materials of the future, cooperation and building Poland's energy independence - KGHM and Lubelski Węgiel "Bogdanka" have signed a letter of intent to cooperate in, among other things, securing access to raw materials key to sustainable transformation. The document was adopted during the National Economic Summit in Lublin.

The parties declare in the letter that they will cooperate in various forms, depending on their needs and capabilities, with particular emphasis on the assumptions contained in business strategies. The companies will work together and be flexible in adapting to the situation, following developments and adapting technologies to changes in the world and exploiting new business opportunities to build competitive advantages for both companies.

– Raw materials are not only an economic issue, they are currently a key issue for national security. Therefore, KGHM is ready for dialogue with domestic partners to ensure the stability and independence of our country. The agreement with "Bogdanka" has a single purpose: to create strong economic foundations for future generations by providing them with certainty of supply of necessary raw materials and energy," said Tomasz Zdzikot, President of the Management Board of KGHM Polska Miedź S.A.

– The transformation of the Polish energy sector is not only a necessity, but also a huge challenge and opportunity for Poland. KGHM is a natural partner for Bogdanka in the implementation of mining projects in the field of raw materials of the future. Thanks to this cooperation, we can work not only for a sustainable transformation, but also strengthen our independence in the supply of critical raw materials and the production of energy from renewable sources. Bogdanka pursues its strategic goals with full commitment and with the conviction that by doing so it contributes to Poland's energy security and the sustainable future of our country," said Kasjan Wyligała, President of the Management Board of Lubelski Węgiel "Bogdanka" S.A.

- Poland has deposits, the extraction of which is and will be the flywheel of the national economy in the years to come. Energy transformation, electromobility, arms industry - their functioning depends on the availability of the so-called raw materials of the future. KGHM has been the guarantor of Poland's raw material security for years, and in order to strengthen it and open up to new business directions, we want to cooperate with other leaders of the Polish mining market, and LW Bogdanka is one such leader," said Mateusz Wodejko, vice-president of the Management Board for financial matters at KGHM.

– Signing the letter of intent with KGHM is an important step in the context of the future of Poland's energy security, and is also another element of the implementation of our strategy. The search for critical raw materials is becoming increasingly strategic and our collaboration with KGHM, a leader in the sourcing industry, will allow us to effectively approach this challenge. The implementation of our common goals in the field of raw materials and energy has a direct impact on the independence of our country and its development," said Dariusz Dumkiewicz, Vice President of the Management Board for Trade and Investment, Lubelski Węgiel Bogdanka S.A.

The signatories of the letter declare, among others: the will to cooperate closely in selecting and analysing the possibilities of implementing joint investment projects in the field of new mining projects in Poland regarding raw materials of the future. Detailed rules regarding the planned projects will be presented in separate agreements.

Both KGHM and Lubelski Węgiel "Bogdanka" intend to pursue mutual benefits related to the further development and strengthening of the Polish industry, allowing it to achieve its strategic objectives and meet market demands.

In 2023, KGHM is implementing development plans, including the Deposit Opening Project, under which the deepest mining excavation in Poland was launched: the 1348m deep GG-1 shaft. The Kwielice shaft is one of the most important investments in the copper giant's history and the largest underground non-ferrous metals project in Europe. In June, the key connection between the shaft and the Rudna Mine was made.

The first works on the construction of the 32nd KGHM shaft, GG-2, have also begun. The shaft site is being built near the town of Słone in the Copper Basin.

The copper giant is launching a feasibility study for the construction of a modern Salt Distillery. The project is both, a business-oriented and environmentally friendly initiative. It will reduce the salinity of KGHM's process water and produce environmentally neutral water free of salt and pollutants. Due to the availability of technical and power utilities, the salt distillery is to be built at the Głogów Copper Smelter.

KGHM is also continuing work on the design documentation for the Scrap Trading Base in the Legnica Hybrid Smelter programme, as well as exploration projects in Poland and development projects in foreign assets. It also carries out activities related to increasing energy production from its own sources, including renewable energy sources, solar and wind energy projects, and hydrogen.

The copper giant has been pursuing its energy development programme, reducing the share of conventional energy and increasing the company's energy independence. This also applies to investment plans related to, among other things, the energy transition. The Ministry of Climate and Environment issued the basic decision for KGHM regarding the construction of a power plant based on small modular reactor (SMR) in Poland. Thus, KGHM received an official state approval for the planned investment in accordance with the assumptions and concept presented by the company.

KGHM also commissioned an environmental and carbon footprint analysis for its products: cathodes, wire rod and Cu-OFE wire. The Institute of Mineral Resources and Energy Management of the Polish Academy of Sciences performed analyses in accordance with ISO standards and prepared environmental declarations. KGHM's copper products have a footprint lower than the global average.

Lubelski Węgiel Bogdanka S.A. is the market leader of hard coal producers in Poland, distinguished from the industry by its modernity and mining efficiency. It is one of the largest Polish hard coal mines. Lubelski Węgiel Bogdanka S.A. is primarily engaged in mining activities with respect to the extraction, enrichment and sale of hard coal. The company supplies raw material mainly to industrial customers. Deliveries are based on long-term contracts, and the sales direction is electric utilities and industrial power generation.

Since June 2009, the company has been listed on the Warsaw Stock Exchange in Warsaw. In August 2022, Lubelski Węgiel Bogdanka S.A. returned to quotations in the WIG-ESG Index.

Since October 2015, Bogdanka has been part of the Enea Group, the vice-leader of the Polish electricity market in terms of electricity production, managing the full value chain in the electricity market: from fuel, through electricity production, distribution, sales and customer service.

In May 2023, Bogdanka published the Strategy for 2023-2030 with a perspective until 2040. The document sets out key directions of development and transformation for Bogdanka. The company intends to create an innovative multi-raw material concern that will drive the green transformation and secure the economic development of the Lublin region. The new strategy of Lubelski Węgiel Bogdanka is based on 5 pillars. The first is a strong coal foundation, within which Bogdanka will remain the leader in coal mining efficiency until the end of the mine's existence. The other four are: Multi-raw material concern, Sustainable Energy Guarantor, Green Transformation and the Future of the Lublin region.