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External auditor’s opinion. 4

ABOUT THIS REPORT. 9

REPORTING METHODOLOGY. 10

1.              ABOUT THE GROUP. 11

1.1.        DESCRIPTION OF THE KGHM POLSKA MIEDŹ S.A. GROUP. 11

1.2.        ORGANIZATIONAL STRUCTURE OF KGHM POLSKA MIEDŹ S.A. AND THE KGHM POLSKA MIEDŹ S.A. GROUP. 12

1.3.        Changes in the main Group governance principles. 17

1.4.        Organizational structure of KGHM Polska Miedź S.A. 17

1.5.        KGHM POLSKA MIEDŹ S.A. GROUP COMPANIES INCLUDED IN THE 2020 REPORTING ACCORDING TO DIRECTIVE 2014/95/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL RUNNING AN INDEPENDENT BUSINESS, average headcount in the period from 1 January to 31 December 2020. 20

1.6.        GOVERNANCE STANDARDS of the KGHM Polska Miedź S.A. Group. 21

1.7.        KEY STAKEHOLDERS IN THE KGHM POLSKA MIEDŹ S.A. GROUP AND CONFIRMATION OF KEY REPORTING ISSUES. 24

1.8.        COMPETITIVE ADVANTAGES OF THE KGHM POLSKA MIEDŹ S.A. GROUP. 25

1.9.        KGHM POLSKA MIEDŹ S.A.’S STRATEGY FOR 2019-2023. 29

1.10.      SUSTAINABLE DEVELOPMENT IN KGHM POLSKA MIEDŹ S.A. 35

1.11.      COMPREHENSIVE RISK MANAGEMENT SYSTEM IN THE KGHM GROUP. 42

2.              ETHICAL FOUNDATIONS. 62

2.1.        VALUES OF KGHM POLSKA MIEDŹ S.A. 62

2.2.        SECURITY AND LOSS PREVENTION SYSTEM IN THE KGHM POLSKA MIEDŹ S.A. GROUP. 68

2.3.        ANTI-CORRUPTION POLICY IN THE KGHM POLSKA MIEDŹ S.A. GROUP. 74

2.4.        PROCUREMENT POLICY OF THE KGHM POLSKA MIEDŹ S.A. GROUP. 78

2.5.        ANTI-ABUSE PROCEDURE OF THE KGHM POLSKA MIEDŹ S.A. GROUP. 79

2.6.        PERSONAL DATA PROTECTION POLICY IN KGHM POLSKA MIEDŹ S.A. 80

2.7.        PROCEDURE FOR VERIFICATION OF COMPLIANCE WITH THE ETHICAL PRINCIPLES OF KGHM POLSKA MIEDŹ S.A. 81

2.8.        INTERNAL AUDIT Rules (FOR ETHICS) IN KGHM POLSKA MIEDŹ S.A. 81

2.9.        INTERNAL CONTROL PROCEDURE OF THE SECURITY AND LOSS PREVENTION SECTION OF KGHM POLSKA MIEDŹ S.A. 82

2.10.      SELECTED INDICATORS ILLUSTRATING ACTIVITIES RELATING TO ETHICAL ISSUES IN THE KGHM POLSKA MIEDŹ S.A. GROUP AND KGHM POLSKA MIEDŹ S.A. IN 2020. 82

3.              ACTIVITY IN THE LABOR AND HUMAN RIGHTS AREA. 82

3.1.        INTERNATIONAL MOBILITY POLICY IN THE KGHM POLSKA MIEDŹ S.A. GROUP. 85

3.2.        HUMAN CAPITAL AND RISK ON THE INTERNATIONAL MARKET. 86

3.3.        WORK REGULATIONS AT KGHM POLSKA MIEDŹ S.A. 86

3.4.        HR POLICY OF KGHM POLSKA MIEDŹ S.A. 86

3.5.        MANAGEMENT OF CAREER PATHS AND RECRUITMENT IN KGHM POLSKA MIEDŹ S.A. 92

3.6.        TRAINING PROCESSES IN KGHM POLSKA MIEDŹ S.A. 92

3.7.        SAFETY POLICY IN THE KGHM POLSKA MIEDŹ S.A. GROUP. 95

3.8.        LABOUR SAFETY COUNCIL OF KGHM POLSKA MIEDŹ S.A. 98

3.9.        ZERO HARM POLICY OF KGHM POLSKA MIEDŹ S.A. 99

3.10.      GOOD COOPERATION PRACTICE WITHIN THE KGHM POLSKA MIEDŹ S.A. GROUP. 100

3.11.      SELECTED GRI STANDARD PERFORMANCE INDICATORS SHOWING ACTIVITY IN THE LABOR AREA IN THE KGHM POLSKA MIEDŹ S.A. GROUP AND KGHM POLSKA MIEDŹ S.A. 102

4.              ACTIVITY RELATED TO SOCIAL ISSUES. 104

4.1.        COMPETITION LAW POLICY IN THE KGHM POLSKA MIEDŹ S.A. GROUP. 105

4.2.        RESPONSIBLE SUPPLY CHAIN POLICY IN THE KGHM POLSKA MIEDŹ S.A. GROUP. 105

4.3.        SOCIAL DIALOGUE AND COOPERATING WITH LOCAL COMMUNITIES IN THE KGHM POLSKA MIEDŹ S.A. GROUP. 106

4.4.        SUPPORT OF THE PUBLIC BY THE KGHM POLSKA MIEDŹ S.A. GROUP DURING THE COVID-19 CORONAVIRUS PANDEMIC  110

4.5.        FOUNDATIONS, SPONSORSHIP AND CSR ACTIVITIES IN THE KGHM POLSKA MIEDŹ S.A. GROUP. 111

4.6.        SELECTED INDICATORS ILLUSTRATING ACTIVITIES IN THE AREA OF SOCIAL ISSUES IN THE KGHM POLSKA MIEDŹ S.A. GROUP AND KGHM POLSKA MIEDŹ S.A. 121

5.              ACTIONS TAKEN TO PROTECT THE ENVIRONMENT AND CLIMATE, AND IMPLEMENTATION OF A CIRCULAR ECONOMY  121

5.1.        ENVIRONMENTAL ACTIVITIES IN KGHM POLSKA MIEDŹ S.A. 138

ENVIRONMENTAL FEES. 139

LEGAL STATUS, PARTICIPATION IN EU ETS SYSTEM AND FUTURE ACTIONS. 140

ACTIVITIES ASSOCIATED WITH THE MANUFACTURE AND APPLICATION OF CHEMICAL SUBSTANCES. 140

ACTIVITIES REDUCING THE ENVIRONMENTAL FOOTPRINT OF THE KGHM INTERNATIONAL LTD. GROUP. 142

5.2.        ENERGY POLICY OF KGHM POLSKA MIEDŹ S.A. 145

5.3.        KGHM POLSKA MIEDŹ S.A. HEALTH PROMOTION AND ENVIRONMENTAL HAZARDS PREVENTION PROGRAM.. 146

5.4.        SELECTED GRI STANDARDS INDICATORS ILLUSTRATING ACTIVITIES RELATED TO ENVIRONMENTAL PROTECTION IN THE KGHM POLSKA MIEDŹ S.A. GROUP AND KGHM POLSKA MIEDŹ S.A. IN 2020. 147

SELECTED GRI STANDARDS INDICATORS ILLUSTRATING ACTIVITIES RELATED TO ETHICS IN THE KGHM POLSKA MIEDŹ S.A. GROUP AND IN KGHM POLSKA MIEDŹ S.A. IN 2020. 154

SELECTED GRI STANDARDS INDICATORS ILLUSTRATING ACTIVITIES RELATED TO EMPLOYEES IN THE KGHM POLSKA MIEDŹ S.A. GROUP AND W KGHM POLSKA MIEDŹ S.A. 155

SELECTED GRI STANDARDS INDICATORS ILLUSTRATING ACTIVITIES RELATED TO SOCIETY IN THE KGHM POLSKA MIEDŹ S.A. GROUP AND KGHM POLSKA MIEDŹ S.A. Selected indicators for 2020 and 2019, illustrating actions involving social issues: 157



External auditor’s opinion

EXTERNAL AUDITOR’S OPINION

FOR THE MANAGEMENT BOARD OF KGHM POLSKA MIEDŹ S.A.

DESCRIPTION OF THE SUBJECT MATTER OF THE OPINION

The formal basis for drawing up this opinion is the Contract between the Accounting and Tax Institute and KGHM Polska Miedź S.A. dated 23 February 2021 for the Accounting and Tax Institute to render the service of making an expert assessment and attestation of the methodological accuracy and integrity of the preparation of the “Non-Financial Report of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group for 2020” (hereinafter referred to as the “KGHM Non-Financial Report”).

The KGHM Non-Financial Report comprises qualitative and quantitative data for the period from

1 January 2020 to 31 December 2020 pertaining to corporate social responsibility of the KGHM Polska Miedź S.A. Group and Parent Entity, understood as sustainable development of these organizational entities.  

KGHM Polska Miedź S.A. has prepared the report following the guidelines of the Directives of the European Parliament and of the Council (2014/95/EU and 2013/34/EU) and the Act of 15 December 2016 Amending the Accounting Act (Journal of Laws of 2017, Item 61; consolidated version: Journal of Laws of 2017 Item 2342), and implementing them in Poland, as well as applying the elements of TCFD’s guidelines (Tak Force on Climate-related Financial Disclosures) to report related Financial Disclosures and of the Communique of the European Commission no. 2019/C 209/01. The supplement pertains to the notification of client-related information and the main assumptions for the EU development program till 2050 (The European Green Deal).

The Non-Financial Report of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group is comprised of five main parts. The first one contains a description of the business, organization structure, business model and the KGHM strategy pursued thereby along with the strategy’s foundation rooted in the idea of sustainable development devised on the basis of the UN 2030 Agenda’s 17 sustainable development goals with special emphasis on the metals and mining industry. This part is wrapped up with a subsection describing the comprehensive risk management system applied in the KGHM Group making it possible to react quickly and effectively to the appearance of any determinants of deviations from the execution of the strategic goals, including within the framework of activities in the labor, social and environmental areas (including the issues of climate and resource efficiency). The second part of the Report forming the subject of this opinion is constituted by the ethical grounds for the operation of the

Group and the Parent Entity, formed by values, as well as the Security and Loss Prevention System with the Code of Ethics as its central document, and furthermore the policies and procedures specifying and upholding the ethical foundations for the operation of both entities in their business environment with special emphasis of respecting human rights and counteracting corruption. The next three parts are formed by sections 3, 4 and 5 with a focus on results and metrics for the employee, social and environmental areas, including the climate and circular economy areas. They have been prepared using globally recognized non-financial reporting standards, relying on the methodology for corporate social responsibility reporting as published by the Global Reporting Initiative in the form of GRI Standards (hereinafer: GRI Standards) and using the guidelines for observing corporate social responsibility, presented in the ISO 26000 standard (Guidance on social responsibility), issued by the International Organization for Standarization.

               

Defining the Management Board’s responsibility

The auditor concludes that correct preparation of the Non-Financial Report subject to the assessment and attestation is the responsibility of the Management Board of the KGHM Polska Miedź S.A. Group and Parent Entity. The framework for this responsibility consists of the selection, implementation and description of the application of the following: business model of entities observing their corporate social responsibility, key non-financial performance indicators associated with the operations of these entities, policies applied by these entities with regard to social, employee, environmental, respect of human rights and prevention of corruption issues and due diligence procedures as part of the above policies, and the risks and their management in the context of these policies. The level of the above responsibility will be validated by constant compliance of globally executed sustainable development principles and goals specified in the description of the subject matter of the opinion as well as a methodology based on GRI Standards and ISO 26000 guidelines.

Defining the auditor’s responsibility              

The auditor declares that its objective was to draw its own conclusions regarding the methods used for setting sustainable development goals, indicators and policy for the KGHM Polska Miedź S.A. Group and KGHM Polska Miedź S.A. as the Parent Entity and their operations presented in the KGHM Non-Financial Report in the descriptive form and confirmed by the figures and levels of selected indicators provided for by GRI Standards. The audit actions based on best knowledge and experience and the auditor’s due diligence were applied to that. In addition, the figures presented in the text and in the indicators provided

for by GRI Standards were verified to determine the risk of material distortion of data and/or the method for calculating them.

The audit was carried out using the International Standard on Assurance Engagements (ISAE) 3000 Revised, Assurance Engagements Other Than Audits or Reviews of Historical Financial Information.

Audit activities performed

The activities performed by the auditor comprised the following five stages:

Stage 1. Assessment of the methodological accuracy of the selection by the KGHM Polska Miedź S.A. Group and Parent Entity of the following: the business model as a group of entities observing their corporate social responsibility, key non-financial performance indicators associated with the operations of these entities, policies used by the entities with regard to social, employee, natural environment, respect of human rights and prevention of corruption issues and due diligence procedures as part of the above policies, and the risks and their management in the context of these policies and selection of the corporate social responsibility indicators in light of the reporting standards compliant with GRI Standards and ISO 26000 and the distinct nature of the metals and mining industry.

Stage 2. Verification of the knowledge of the management concerning the business model used by the KGHM Polska Miedź S.A. Group and Parent Entity as a group of entities observing their corporate social responsibility, key non-financial performance indicators associated with the operations of these entities, policies used by the entities with regard to social, employee, natural environment, respect of human rights and prevention of corruption issues and due diligence procedures as part of the above policies, and the risks and their management in the context of these policies and selection of corporate social responsibility indicators in light of the reporting standards compliant with GRI Standards and ISO 26000 and the distinct nature of the metals and mining industry.

Stage 3. Assessment of the structure and effectiveness of material mechanisms used by the KGHM Polska Miedź S.A. Group and Parent Entity with regard to collection, processing and reporting of data for the key non-financial performance indicators associated with the operations of these entities, policies used by the entities with regard to social, employee, natural environment, respect of human rights and prevention of corruption issues and due diligence procedures as part of the above policies, and the risks and their management in the context of these policies and the corporate social responsibility indicators in light of the reporting standards compliant with GRI Standards and ISO 26000 and the distinct nature of the metals and mining industry.

Stage 4. Assessment of the structure and effectiveness of the key mechanisms for risk management and audit and internal control used by the KGHM Polska Miedź S.A. Group and Parent Entity with regard to collection, processing and reporting of data for the key non-financial performance indicators associated with the operations of these entities, policies used by the entities with regard to social, employee, natural environment, respect of human rights and prevention of corruption issues and due diligence procedures as part of the above policies, and the risks and their management in the context of these policies and the corporate social responsibility indicators in light of the GRI reporting standards and ISO26000 and the distinct nature of the metals and mining industry.

Stage 5. Verification of a sample of source documents for the non-financial indicators used by the KGHM Polska Miedź S.A. Group and Parent Entity, illustrating execution of the actions in the area of corporate social responsibility policies and procedures to define the risk of material distortion on the data presented in the KGHM Non-Financial Report and/or the method for determining them.

The auditor’s activities have made it possible to obtain sufficient and adequate evidence to issue a positive conclusion for the Management Board of the KGHM Polska Miedź S.A. Group as presented below.

Auditor’s conclusion

On the basis of the actions it has completed, the auditor states that the “Non-financial report of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group for 2020” has been prepared correctly in its entirety from a methodological perspective and following the rules on overall integrity, and nothing has been identified therein that would indicate that the aforementioned provisions pertaining to the business model as a group of entities observing corporate social responsibility, key non-financial performance indicators associated with the operations of these entities, policies used by these entities with regard to social, employee, natural environment (including the climate and circular economy), respect of human rights and prevention of corruption issues and due diligence procedures as part of the above policies, and the risks (even though they are presented together in a single section of the KGHM Non-Financial Report) and their management in the context of these policies, failed to follow the guidelines of the Directives of the European Parliament and of the Council (2014/95/EU and 2013/34/EU) and the Act of 15 December 2016 Amending the Accounting Act (Journal of Laws of 2017, Item 61; consolidated version: Journal of Laws of 2017 Item 2342) implementing them in Poland. The auditor also states that the Report subject to this opinion has also applied the TCFD guidelines (Task Force on Climate-related Finanacial Disclosures) to report environmental issues and European Union Communique no. 2019/C 209/01: Supplement regarding the notification of climate-related information and the key assumptions of The

European Green Deal, which should be deemed to be an important element specifying the awareness and liability of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group for issues associated with curtailing the adverse climate-related changes and rational resource management, in respect to both primary and secondary resources.

The clauses of KGHM’s Non-financial Report are also consistent with the global corporate social responsibility standards and the reporting standards provided for in GRI Standards as well as ISO 26000 guidelines, taking into account the distinct nature of the metals and mining industry.

Scope of application of the conclusion

This opinion, particularly the resulting conclusion, has been prepared by the auditor representing the Tax and Accounting Institute, in accordance with the agreement with KGHM Polska Miedź S.A. concluded on 12 February 2021 only for the needs of the KGHM Polska Miedź S.A. Management Board and should not be used for any other purpose. The Accounting and Tax Institute does not assume in connection with this opinion any liability towards other persons than the KGHM Polska Miedź S.A. Management Board.

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With a miner’s greeting,

Paweł Bogacz, Ph.D. Hab. Eng. (Stanisław Staszic AGH University of Science and Technology in Kraków)

Accounting and Tax Institute auditor

Warsaw, 15 March 2021

ABOUT THIS REPORT

This 2020 Non-Financial Report (Report, Non-Financial Report) contains data and measures pertaining to the KGHM Polska Miedź S.A. Group (hereinafter also referred to as the Group) and KGHM Polska Miedź S.A. (hereinafter referred to as the Parent Entity or Company). It has been prepared in accordance with the guidelines of the Accounting Act with regard to disclosure of non-financial information, the Act of 15 December 2016 Amending the Accounting Act (Journal of Laws of 2017, Item 61; consolidated version: Journal of Laws of 2017 Item 2342, as amended) and also based on the Directive of the European Parliament and of the Council no. 2013/34/EU subsequently amended by the Directive of the European Parliament and of the Council no. 2014/95/EU. Non-financial reporting is based on the Global Reporting Initiative (GRI) guidelines developed with the use of indicators included in the GRI Standards methodology selected with a view to providing possibly the most comprehensive description of the issues covered. This Report also employs elements of the guidelines of the Task Force on Climate-related Financial Disclosures and the Communication from the Commission No. 2019/C 209/ 01 – Supplement on reporting climate-related information and the assumptions for the European Green Deal EU development program.

To ensure full transparency, a comprehensive approach and the analytical data layout, this document has been prepared in the form of a Report. The reporting process in the KGHM Polska Miedź S.A. Group and in the Parent Entity KGHM Polska Miedź S.A. is carried out on an annual basis. This report does not contain any corrections of the content of previous reports. The Non-Financial Report of KGHM Polska Miedź S.A. and the Group for 2019 was published on 17 March 2020.

In the process of preparing the Report, the documents, policies, due diligence procedures, risk management principles and other informational materials related to the activities of the KGHM Polska Miedź S.A. Group and the Parent Entity KGHM Polska Miedź S.A. and the metals and mining industry in general, were reviewed. The values of qualitative and quantitative indicators describing the Group and the Parent Entity were calculated with due diligence and in accordance with the principles of comprehensiveness. 

The Report has been prepared as a separate 2020 Non-Financial Report of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group. This document has been subjected to an external review. Moreover, in line with its practice to date, by the end of June 2021 KGHM Polska Miedź S.A. will publish its 2020 Integrated Report.

REPORTING METHODOLOGY

The preparation of the content of this Non-Financial Report comprised the following five stages:

Stage 1. Confirmation of the map of stakeholders in order to describe relations with the environment.

Stage 2. Confirmation of the applicability and importance of key business and sustainable development issues that are relevant for the KGHM Polska Miedź S.A. Group and the Parent Entity KGHM Polska Miedź S.A. in order to prepare a description of the business model. Significant issues were defined during discussion meetings with representatives of KGHM Polska Miedź S.A. and representatives of KGHM Group Companies.

Stage 3. Collection of metrics, using the electronic tool to collect non-financial data, depicting the implementation of policies, strategies and sustainable development goals as well as due diligence and risk management principles and their application in the KGHM Group and the Parent Entity in 2020.

Stage 4. Summary of the 2020 Non-Financial Report of the KGHM Group and the Parent Entity based on the collected data in accordance with the Accounting Act of 15 December 2016 (Journal of Laws of 2017, item 61, consolidated text: Journal of Laws of 2017, item 2342) and elements of the guidelines of the Task Force on Climate-related Financial Disclosures and the Communication from the Commission No. 2019/C 209/ 01 – Supplement on reporting climate-related information, and the assumptions for the EU development program (The European Green Deal) announced on 13 December 2019.

Stage 5. Third party audit evaluating the correctness of data and content included in the Non-Financial Report of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group for 2020.























1.       ABOUT THE GROUP

1.1.    DESCRIPTION OF THE KGHM POLSKA MIEDŹ S.A. GROUP

The KGHM Polska Miedź S.A. Group is a global, innovative organization involved in technologically advanced exploration, mining and smelting operations. For several decades, the Company has been mining and processing valuable underground resources, providing the world with commodities that enable its sustainable development. The Company’s history began in 1957 with the discovery of one of the world’s largest deposits of polymetallic ores, predominantly copper and silver, located in south-western Poland. The deposit has been effectively and reasonably mined to this day. As the years went by, the KGHM Polska Miedź S.A. Group significantly grew its business both in terms of products and the market. KGHM Polska Miedź S.A. is present on four continents: in Europe, South America, North America and Asia. The KGHM Polska Miedź S.A. Group is comprised of KGHM Polska Miedź S.A. as the Parent Entity and several dozen subsidiaries. As at 31 December 2020, the Group was composed of KGHM Polska Miedź S.A. as the Parent Entity and 71 subsidiaries (including two closed-end, non-public investment funds), employing more than 34 thousand people globally, trusting that what they do is important for the world. Owing to their knowledge, courage and responsibility, the KGHM Polska Miedź S.A. Group produces valuable commodities, predominantly metals. Its core business is the production of copper along with non-ferrous metals. We should also note the development of the resource base, which is a key element in securing the exploitation potential of geological resources. The Company is ranked among the world’s top producers of copper and silver. It also produces gold, molybdenum, nickel, rhenium, lead and platinum. The high quality of the copper, silver and other commodities produced by the Company has been confirmed by certificates awarded by various international commodity exchanges. By adopting a responsible approach, the KGHM Polska Miedź S.A. Group sets a good example for others, acting in accordance with its values in a transparent and socially responsible manner.

The cohesion of such a complex organization is built on a set of common values: ZERO HARM, TEAMWORK, RESULTS DRIVEN, ACCOUNTABILITY AND COURAGE. KGHM is a company with 60 years of history, operating on the basis of deeply rooted values and principles which its Employees follow in their daily work. Zero harm, teamwork, results driven, accountability and courage – these values bind all of KGHM’s employees, regardless of whether they work in a mine, processing plant or smelter, in Poland or in other parts of the world. KGHM builds its global position in the world as a reliable producer, trusted business partner and a company pursuing a sustainable development policy. The Company has been listed on the Warsaw Stock Exchange for more than

20 years and is included in the WIG20, WIG30 and WIG-ESG indices. KGHM Polska Miedź S.A. is also among companies included in the FTSE4Good Index Series.

Specifically, the business of the KGHM Polska Miedź S.A. Group covers the following areas:

– mining of copper ores and non-ferrous metal ores

– production of metals, among others copper, silver, molybdenum, nickel, gold, platinum, palladium,

– manufacturing of goods from copper and precious metals,

recycling of non-ferrous metals.

– underground construction services,

– manufacturing of mining machinery and equipment,

– transportation services,

– research, analysis and design services,

– production of road construction aggregate,

– recovery of metals accompanying copper ore,

The activities of the KGHM Polska Miedź S.A. Group with respect to the exploration and mining of copper and nickel ore and precious metals deposits is based on the concessions held by KGHM Polska Miedź S.A. for the mining of deposits in Poland and the legal titles held by companies belonging to the KGHM INTERNATIONAL LTD. Group for exploration and extraction of raw materials in the USA, Canada and Chile.

1.2.    ORGANIZATIONAL STRUCTURE OF KGHM POLSKA MIEDŹ S.A. AND THE KGHM POLSKA MIEDŹ S.A. GROUP

As at 31 December 2020, the Group was composed of the Parent Entity – KGHM Polska Miedź S.A. – and 71 subsidiaries (including two closed-end, non-public investment funds), located on four continents: Europe, North America, South America and Asia. Some of these subsidiaries form their own groups. The largest of these, in terms both of the number of entities as well as the value of equity, is the KGHM INTERNATIONAL LTD. Group, whose main assets are located in Canada, the USA and Chile. It was comprised of KGHM INTERNATIONAL LTD. and its 26 subsidiaries. At the end of the reporting period the KGHM Polska Miedź S.A. Group owned shares in two joint ventures - Sierra Gorda S.C.M. and NANO CARBON Sp. z o.o. in liquidation.

The detailed structure of the KGHM Polska Miedź S.A. Group, together with the relationships between entities, may be found in Appendices 2 and 3.

The Group’s main entities, which are engaged in the mining sector, comprise three primary reporting segments which are independently evaluated by management bodies. These are: KGHM Polska Miedź S.A., KGHM INTERNATIONAL LTD. and Sierra Gorda S.C.M. Other companies, excluding Future 1 Sp. z o.o., Future 2 Sp. z o.o., Future 3 Sp. z o.o., Future 4 Sp. z o.o., Future 5 Sp. z o.o., Future 6 Sp. z o.o. in liquidation and Future 7 Sp. z o.o. in liquidation,  are part of the segment called Other segments.

 











































Organizational structure of the KGHM Polska Miedź S.A. Group, including KGHM INTERNATIONAL LTD., and the position of KGHM Polska Miedź S.A. as the Parent Entity and its stakes in each company