The Management Board of KGHM Polska Miedź S.A. announces that on 23 February 2009 the Supervisory Board of KGHM Polska Miedź S.A. approved the „Strategy of KGHM Polska Miedź S.A. for the years 2009 – 2018” (hereinafter the Strategy).
The vision of KGHM Polska Miedź S.A. is to become a major, global copper producer by increasing copper production to approx. 700 thousand tonnes.
The Strategy of KGHM Polska Miedź S.A. is based on five main areas:
1. Improving productivity – aimed at halting increases in the unit cost of production.
Key actions in this area assume:
a) investments in new technology, including:
- the mechanical mining of ore, enabling the effective exploitation of the deposit up to two meters in thickness,
- concentrate smelting in the Głogów I smelter – construction of a flash furnace,
- automatisation of the ore enrichment process,
b) modernisation of existing infrastructure, including:
- replacing mining machinery – maintaining the machinery replacement ratio at 17%,
- replacing machinery in the Ore Enrichment Plants (new floatation machinery),
- intensifying the electrorefining process – modernisation of the Głogów II smelter,
c) optimalisation of production procedures and organisation, including among others:
- centralisation of purchasing,
- developing and implementing an IT ore mining management system,
- intensifying underground mine development work.
2. Developing the resource base – aimed at increasing the production of copper in concentrate to approx. 700 thousand tonnes annually.
KGHM Polska Miedź S.A. will undertake a variety of initiatives guaranteeing the possibility of long-term growth by increasing the resource base, in particular:
a) developing the deep deposit mining system, including:
- further work on developing and accessing the Głogów Głęboki–Przemysłowy deposit,
- developing the system for mining ore at depths below 1200 meters,
b) investments in foreign mining assets,
c) searching for new local deposits by:
- further exploration of the possibilities of mining the region of Radwanice–Gaworzyce,
- exploring and documenting the region of Weisswasser (Germany),
- exploratory work in regions adjacent to the deposits of KGHM,
d) intensifying the processing of scrap – optimalisation of the electrolytic copper production process by increasing the volume of smelted scrap.
3. Diversifying sources of revenues and gaining gradual independence from energy prices.
The Company intends over the long term for approx. 30% of its revenues to be unrelated to its core business.
Towards this end the Strategy assumes:
a) continued investment in the telecoms sector,
b) gradual entrance into the power sector, in particular by investing in the following sources:
- gas – by realising investments related to the construction of gas-steam blocks in Głogów and Polkowice (this project will be realised only to meet internal needs), which will satisfy 25% of the Company’s need for electricity,
- bituminous coal – planned cooperation with a sector partner in the construction of a bituminous coal power plant,
- renewable energy sources – wind power.
Over the long term the Company plans to achieve approx. 3% of the energy market in Poland.
4. Regional support.
KGHM Polska Miedź S.A. plans to remain active in activities aimed at the local community, by:
a) creating jobs – developing regional entrepreneurship and creating approx. 750 new jobs, mainly by utilising the infrastructure of KGHM Letia S.A.,
b) protecting the environment as well as the health of employees and of the local community, supporting sport and local development of the arts and sciences.
5. Developing organisational know-how and capabilities.
Key improvements mainly include introducing management mechanisms through goals, staff development programs, and creating a transparent Group structure.
Based on Company assumptions, total investment expenditures on the realisation of strategic projects in the years 2009 – 2018 amount to approx. PLN 19.8 billion.
Realisation of the Strategy will improve over the short term cost competitiveness of the Company. In the mid-term (up to 10 years), as a result of development of the resource base, KGHM Polska Miedź S.A. will become an international copper mining company. Over the long term, diversification into the power sector will enable KGHM Polska Miedź S.A. to become an international copper group with diversified sources of income which will protect the Company from fluctuations in copper prices.
Legal basis: art. 56 sec.1 point 1 of the Act dated 29 July 2005 on public offerings and conditions governing the introduction of financial instruments to organised trading, and on public companies (Journal of Laws No. 184, item 1539 with subsequent amendments)