Decision by KGHM to withdraw from its investment in Congo

The Management Board of KGHM Polska Miedź S.A. has resolved to withdraw from the decision to build a hydrometallurgical plant and to withdraw from the Democratic Republic of Congo, through the sale of its mining rights to the Kimpe ore deposit – acquired by KGHM in 1996. 

This decision was taken after an analysis of the effectiveness of eventual further investment. 

Taking into account the amount of the investment required for continued operations, estimated at 23-30 mln USD, as well as the fact that the size of the ore to which the Company owns mining rights is rather small, it was decided that further expenditures are not economically justified. 

The ore to which KGHM owns mining rights, through its subsidiary K.G.H.M. Congo s.p.r.l., would be exhausted, given planned production, within 5 years. 

The decision of the Management Board was affected by the lack of stability in the Democratic Republic of Congo. The development strategy of KGHM Polska Miedź S.A. precludes the possibility of direct investment in areas associated with a high political risk. 

In the years 1996-2005 investment expenditures associated with the acquisition of rights to and exploitation of the Kimpe ore deposit in the Democratic Republic of Congo ammounted to appx. PLN 170 mln. 

The Supervisory Board of KGHM Polska Miedź S.A. reviewed the decision of the Management Board at its meeting on 14 July 2006. 

Further information: 
Alina Urban 
Media Adviser 
KGHM Polska Miedź S.A. 
(22) 492 10 56, 695 390 171,