KGHM

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The world of Polish copper arose in the very heart of Europe. The discovery on March 23, 1957 by Dr. Jan Wyykowski of a rich deposit of copper ore in the EU was one of the greatest geological sensations of the middle of the 20th century. It altered the face of the entire region and created one of the largest and most modern industrial regions in Poland.

During the 50 years from the discovery of this unique deposit, there arose a modern enterprise, which today is a leader of the global copper and silver markets – KGHM Polska Mied S.A.

KGHM Polska Mied S.A. uses a fully-integrated technological process, in which the final product of one stage of production forms the raw material for the next stage. The copper ore extracted from mines is transported to processing plants, where it is then enriched in Ore Enrichment Plants in Lubin, Polkowice, and Rudna. They are equipped with high-capacity machinery, modern control/measurement aparatus and computerised automation systems.

Generally speaking, copper concentrate is obtained as a result of the process is then sent to smelters where it is refined into anode copper, which is then electrolytically refined into copper cathodes. This production process is used in the KGHM’s own metallurgical plants: the Legnica Copper Smelter, Gogów Copper Smelter and the Cedynia Copper Rolling Mill.

The modern production technology applied in the smelters by KGHM enables the full use of natural resources and of the company’s production potential.

How it got started

KGHM Polska Mied S.A. is a mining company with almost 50-year-long tradition. It was established in 1961 as a state enterprise under the nameKombinat Górniczo-Hutniczy Miedzi” (Copper Smelting-Mining Combine). In 1991, it was transformed into a joint stock company. The shares of the company have been traded on the Warsaw Stock Exchange and the London Stock Exchange since 1997.

KGHM possesses its own copper ore deposit and integrated production structure. As a parent company, it is composed of 10 divisions: three mines, two copper smelters/refineries, a wire rod plant, an ore enrichment plants Division, a tailings Division, an emergency mine-smelter rescue Services Devision and a Central Data Processing Devision and auxiliary units supporting the core business. The company produces about 520,000 tonnes of refined copper and about 1,200 tonnes of refined silver per year. The company employs about 18,500 people, while another 10,000 people are employed in other companies of the KGHM Group.

Modern methods are used by KGHM for the extraction and processing of copper ore, along with modern organizational and management systems, which provide for the environmentally-friendly production of the highest quality copper and silver and of other resources.

Every year around 30 million tonnes of copper ore, dry weight, containing 1.67 per cent of the metal are extracted from the mines, as well as a significant amount of silver. The company also extracts rock salt from above the layers of copper.

The largest single deposit of copper in Europe

KGHM’s copper ore deposit is located in south-western Poland, located in the vicinity of the towns of Lubin, Sieroszowice and Gogów. Covering an area of around 550 km2, the deposit makes Poland fourth place globally in terms of copper resources, and first place in the case of silver resources. Current mining of the copper deposit occurs at depths of between 600 to 1200 meters. Apart from copper and silver, more than 110 minerals have been identified in surrounding rock, of which the most important are chalcocite, bornite and chalcopyrite. Amongst the numerous elements occurring in the copper ore are nickel, lead and precious metals, i.e. gold and platinum. The copper ore is extracted from the deposit by three mines: ZG Lubin, ZG Rudna, ZG Polkowice-Sieroszowice.
The Ore Enrichment Plants annually process over 1.9 million tonnes of concentrate, dry weight, containing 24 per cent copper.

Overview of projects

The Legnica Copper Smelter is KGHM’s oldest smelter. Copper cathodes are produced using shaft furnace technology and the electrorefining process. In 2007 a lead renifery was brought into production at the Legnica Copper Smelter, using raw material taken mainly from the Lead Section of the Gogów Copper Smelter.
The Gogów Copper Smelter produces electrolytic copper in two mutually-operating complexes: Gogów I, which uses a shaft furnace, and Gogów II, which uses modern flash furnace technology for processing concentrate. The final product of both complexes is refined electrolytic copper in the form of cathodes.
Part of the electrolytic copper produced in the smelters in Legnica and Gogów is processed by the Cedynia Copper Rolling Mill into wire rod and oxygen-free wire rod and since 2007 into oxygen-free, silver-bearing copper wire rod.

Rescue capability

Each KGHM mine has its own separate rescue team, which operates under a rule that a team is only 10 minutes away from anywhere in the mining areas. They are fully equipped to conduct rescue as a result of roof collapses, underground fires and even underwater rescues due to flooding. Overall, KGHM has 434 rescue staff, organized into teams of five men. The rescue team from KGHM Polska Mied S.A. has frequently achieved a high standing in the International Mine Rescue Competition, winning first place in the years 2000 and 2004 and third place in 2008.

The global market

The global copper and silver markets are the natural environment for KGHM Polska Mied S.A., which is a fully-empowered and responsible participant amongst global leaders. The company offers its clients natural resources which are perfect by nature for modern and safe technology. The refined copper produced by KGHM is of the highest quality. The electrolytic copper in the form of cathodes meeting the requirements of “grade A” is registered on the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE). In addition, the market brands of KGHM’s products, along with certificates confirming that the divisions of the company operate on the basis of modern ISO standards, are a guarantee of their high quality, and are recognised by all international metal markets participants.

Sales of KGHM’s basic products — copper cathodes, wire rod, round billets and precious metals — are managed by the company’s Sales Office, which is a part of the structure of the Head Office of the Company. The Sales Office is assisted by two wholly-owned commercial companies KGHM Polish Copper Ltd. in London and Kupferhandelsges m.b.H. in Vienna. Most of the company’s production is sold under long-term contracts (mostly annual), guaranteeing its clients regular deliveries. The remainder, and any eventual excess, is sold under so-called spot contracts.

The metallurgical plants of KGHM annually produce over half a million tonnes of electrolytic copper and around 1200 tonnes of silver, around half a tonne of gold, as well as other products: platinum/palladium, refined lead, sulphuric acid, copper sulphate, nickel sulphate, technical selenium, copper nuggets and road-building material produced from slag arising from the copper smelting process in the shaft furnaces.

Amongst global rankings of metals producers, KGHM Polska Mied S.A. is amongst:
the top ten of refined copper producers,
the top three of silver producers.

An environment under constant care

Feeling responsible for the region, KGHM Polska Mied S.A. keeps the natural environment of the region under constant control. The company takes great care to protect the natural beauty of the region, desiring to preserve for future generations the elements of the earth it benefits from.
Thanks to environmental investments, all of the main environmental threats arising from the operations of the company have been eliminated, and so the environment surrounding it is gradually improving. All of the company’s divisions have reached their target levels and met the highest Polish and European standards in environmental protection, industrial waste management and workplace safety. An example of a significant environmental investment undertaken by KGHM is the elazny Most tailings pond - the largest non-natural tank in Europe built to store waste from the Rudna mine Ore Enrichment Plant, and subsequently from the Ore Enrichment Plants of the Lubin and Polkowice mines, amassing some 700 mln m3 of tailings.
The actions undertaken by KGHM Polska Mied S.A. and the awards granted to the company prove that it is perceived as a company implementing model solutions for protecting the natural environment, for which it has been honored in recent years with many prestigious awards.

The KGHM Group

Resources for new possibilities around KGHM Polska Mied S.A. arose the KGHM Group, expanding the possibilities for the company to grow and develop. It is based on the inherent resources and human capabilities which have built a modern enterprise and plants in the heart of Europe. The companies of the KGHM Group are engaged in activities beyond the sphere of the world of copper.

The purpose of the KGHM Group is to support the basic production operations of the company and to generate additional revenues from activities not connected to the core copper business. The KGHM Group comprises over 30 companies operating around KGHM which subsequently were transformed into separate companies. Elements comprising the core production business remained within the parent company structure: mines, copper smelters, ore enrichment plants and the hydrotechnical facility. Subsidiaries and companies spun off which were included in the KGHM Group due to equity investment are engaged in a variety of economic activities.

These include companies involved in:
telecommunications,
commerce, representing KGHM domestically as well as in the UK and Austria,
production,
transport,
academic-research,
sport and tourism, and
insurance.

Of particular importance are companies providing auxilliary support for the core business of KGHM, and those involved in telecommunications. The entities of the Group carry out goals and tasks deriving from the general strategy of KGHM.

Strategy for the future

Setting the bar high, KGHM Polska Mied S.A. is strategically positioning itself to become a major, global copper producer by increasing copper production to approximately 700 thousand tonnes. Some of the ways in which KGHM plans to do this include improving productivity—aimed at halting increases in the unit cost of production. Other goals:
 
Developing the resource base – aimed at increasing the production of copper in concentrate to approximately 700 thousand tonnes annually.
Diversifying sources of revenues and gaining gradual independence from energy prices.
Regional support.
Developing organisational know-how and capabilities.
This strategic approach will improve 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 Mied S.A. will become an international copper mining company.
Over the long term, KGHM plans to diversify into the power sector which will enable them to become an international copper group with various sources of income that is protected fluctuations in copper prices.

www.kghm.pl