KGHM Polska Miedz SA

KGHM Polska Miedz SA is a mid-tier copper producer headquartered in Lubin, Poland, operating primarily in Europe. The company's portfolio consists of 9 projects, comprising 7 operating mines, 1 development, and 1 suspended project, in addition to several early-stage exploration prospects. Key assets include Polkowice-Sieroszowice, Rudna, and Sierra Gorda. The organization's business model is built on a fully integrated production process, encompassing exploration, mining, metallurgy, and the sale of finished goods. A key competitive advantage stems from over 60 years of experience in underground mining, including unique know-how in deep-level extraction, which inherently reduces surface environmental impact compared to open-pit methods. The enterprise actively extends its value chain by increasing the processing of secondary raw materials and developing highly processed products. Innovation is central to its operational approach, with research and development activities focused on enhancing process efficiency, robotization, and safety through initiatives like testing self-driving electric machinery. An internal 'Inventors Market' program fosters employee-led innovation to solve technical and organizational challenges. The global scale of operations provides a diversified product portfolio and mitigates risks associated with disruptions in any single production unit, while facilitating a continuous transfer of knowledge and experience across its international assets.

Strategic direction is guided by the '5E' framework, which integrates Efficiency, Ecology, Elasticity, E-industry, and Energy. This framework is operationalized through 5 pillars: Core Business, New Activities, Supporting Activities, Health, and Prosociality. A primary objective involves diversifying into the energy sector by developing internal generation capacity from low-emission and renewable sources to enhance energy self-sufficiency. The strategy emphasizes the development of metallurgy based on Circular Economy principles, aiming to significantly increase the processing of scrap and other secondary materials. Expansion along the value chain is another core tenet, focused on developing new, highly processed products. To support these initiatives, the financial strategy prioritizes long-term stability through diversified financing instruments, shortening the cash conversion cycle, and effective management of market and credit risk. The organization also concentrates on securing its resource base for future production and expanding its mining capacity for new metals and minerals through a dedicated international exploration strategy.

The governance framework is overseen by a 10-member Supervisory Board, with 3 members elected by employees, ensuring workforce representation in strategic oversight. The board operates through 3 specialized committees: Audit, Remuneration, and Strategy. Executive leadership is headed by the President of the Management Board, Tomasz Zdzikot, whose background includes extensive experience in public administration, national defense, and cybersecurity. The enterprise adheres to the 'Best Practice for GPW Listed Companies 2021' and employs a 'Three Lines of Defence' model for comprehensive risk management, which is monitored by the Audit Committee. The Management Board, composed of 1 to 7 members appointed for a 3-year term, is responsible for all aspects of the company's affairs not reserved for the Supervisory Board or General Meeting. The corporate risk management process is inspired by the ISO 31000 standard and is consistently applied across the group, with cyclical reporting on key risks to the Management Board and the Audit Committee.

The organization's sustainability approach is formalized in its Climate Policy, which targets climate neutrality by 2050 for Scope 1 and 2 emissions, with an interim reduction goal for 2030. This is supported by investments in renewable energy projects and the exploration of small modular reactor (SMR) technology. Environmental stewardship is guided by an ISO 14001-certified management system and includes the BATAs Program to adapt metallurgical installations to Best Available Techniques and reduce specific emissions. A commitment to the circular economy is demonstrated through the Hybrid Smelter program, designed to increase the processing of recycled materials. Workplace safety is a core value, managed through an ISO 45001-certified system and the 'Think About The Consequences' program, which has contributed to the company earning the 'Gold Card Leader of Workplace Safety' award. Social responsibility is advanced through the 'Copper Heart' employee volunteerism program and the KGHM Polska Miedź Foundation, which supports community health, education, and cultural initiatives. A comprehensive Human Rights Policy, adopted in 2022, formalizes the commitment to protecting employee and community rights across all operations.

The corporate structure includes several key operational subsidiaries that support the core business, including PeBeKa S.A. as a mining work contractor, KGHM ZANAM S.A. as a supplier of mining machinery, and KGHM Metraco S.A., which supplies scrap materials. A significant structural change occurred in February 2022 when South32 acquired a 45% interest in the Sierra Gorda S.C.M. joint venture from Sumitomo. The organization also streamlined its asset portfolio through divestitures, completing the sale of the Franke mine to Minera Las Cenizas S.A. in April 2022. The ownership structure is characterized by a significant holding by the State Treasury, which possesses 31.79% of the shares. Other major institutional shareholders include Nationale-Nederlanden OFE with a 5.05% stake and Powszechne Towarzystwo Emerytalne Allianz Polska Spółka Akcyjna, which, following a merger in 2023, holds a combined 6.12% interest in the company's share capital.