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MESSAGE _ENGLISH VERSION_
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Approval of the Strategy of the KGHM Polska Miedź S.A. Group 2055+
The Management Board of KGHM Polska Miedź S.A. _hereafter "the Company"_
announces that on 3 July 2026 the Supervisory Board of KGHM Polska Miedź
S.A. approved the "Strategy of the KGHM Polska Miedź S.A. Group 2055+"
_"Strategy of the KGHM Group 2055+"_ submitted by the Management Board
of the Company.
Taking into consideration the rapid geopolitical and macroeconomic
changes affecting the market and strategic trends for the mining sector,
including copper, the Management Board - following an analysis of
current opportunities and challenges identified in the Company's
environment, as well as regards the core business and other business
areas - has set the strategic development priorities of the KGHM Group
as a multi-resource group. The Strategy of the KGHM Group 2055+ is based
on a long-term approach aimed at ensuring a stable, cost-competitive and
resilient organisation, capable of functioning in a volatile market
environment. As part of its long-term strategy, the Company intends to
concentrate primarily on strengthening the Core Production Business in
Poland and developing its know-how as regards the mining and processing
of natural resources, including critical raw materials as well as
minerals of key importance to the economy. The selective development of
the portfolio of international assets remains an important element of
the strategy, which is based on both the active ownership supervision
system and the potential acquisitions of raw material projects, taking
into account their economic efficiency, risk profile and consistency
with the Group's long-term targets. The strategy also assumes a higher
importance of research and development projects as a factor supporting
the Group's competitive advantages, among others, by using the potential
of artificial intelligence in business processes and developing
technologies that support KGHM's ESG goals.
The overarching strategic goal of the KGHM Group is the profitable
mining of minerals with an outlook beyond 2055. The Strategy of the KGHM
Group 2055+ defines the mission as "Innovation in every gram of copper"
and vision as "Responsible mining for future generations".
The Strategy of the KGHM Group 2055+ was systematised into three
complementary areas, under which strategic directions were designated.
Area 1 - The strengthening and development of know-how and of the
business potential of the KGHM Group - the utilisation of competitive
advantage resulting from unique mining and metallurgical know-how
throughout the value chain and in the entities of the KGHM Group.
Strategic directions:
Ensure financial stability,
Optimise work and develop the potential of the Group's Companies in
Poland,
Develop international assets,
Ensure succession and maintain human potential in the organisation.
Area 2 - The sustainable mining and metallurgical production of copper
and associated products - the maximum utilisation of resources and their
optimum management, while maintaining the highest environmental and
market standards.
Strategic directions:
Develop and manage the Polish resource base,
Ensure long-term, efficient and flexible production,
Manage production waste,
Ensure compliance with legislative requirements and market standards,
Cooperate with local communities and other stakeholders,
Develop metallurgical production,
The Energy transition.
Area 3 - Expansion and development of technology and innovation -
development of the value of the KGHM Group's products and expansion of
the products portfolio in accordance with megatrends and the current
development directions of the mining and metallurgical sector.
Strategic directions:
Extension of the value chain with new products and services,
Multi-resource portfolio, including critical metals,
Innovation, development of new technology, knowledge sharing.
In terms of the defined strategic directions, strategic targets were set
to be achieved along with KPIs, with particular emphasis on the
short-term and medium-term perspective.
Key financial and production indicators:
Maintain, on an annual average basis in the years 2026-2030, an
adjusted EBITDA of the KGHM Group at the level of PLN 12 billion and an
EBITDA margin of the KGHM Group at the level of 25.6% in real terms,
assuming an average annual copper price of 11 454 USD/t during this
period, a silver price of 58.18 USD/oz and a USD/PLN exchange rate of
3.56, adopted on the basis of the median of market forecasts as of June
2026.
Maintain, on an annual average basis in the years 2026-2030, payable
copper production in the KGHM Group at the level of 730 thousand tonnes,
of which approx. 80% from the Polish assets _including 180 thousand
tonnes from scrap_ and 20% from the international assets.
Maintain, on an annual average basis in the years 2026-2030, silver
production in the KGHM Group at the level of 1 290 tonnes and molybdenum
production at the level of 4.0 million pounds.
An increase in revenues from sales of products more highly-processed
than copper cathodes to approx. 60% as compared to total sales of
electrolytic copper in the reporting year at the end of 2035.
An increase by at least 50% _up to at least 220 MW_ in installed
capacity from own power generation sources by 2030, compared to the
capacity ordered by KGHM in 2024 _440 MW_.
Reduce Scope 2 CO2 emissions by 30% by the end of 2030 in KGHM Polska
Miedź S.A., achievement of climate neutrality in the long-term in 2050.
Strive for 0 accidents as measured by LTIFR for the assets in Poland
and TRIR for the international assets.
As part of the Strategy of the KGHM Group 2055+, an investment plan was
developed which aims to ensure higher margins and improved profitability
in the near-term perspective, and to strengthen the Company's position
amongst global copper producers in the long term. In the years
2026-2030, the KGHM Group's capital expenditures are estimated at over
PLN 32 billion, of which nearly 80% will be allocated to capital
expenditures within the Core Production Business in Poland and in the
Polish companies of the KGHM Group. The remaining 20% is made up of
investments in the companies KGHM INTERNATIONAL LTD. and Sierra Gorda
S.C.M. _55% share of KGHM Polska Miedź S.A._. The forecasted average
annual capital expenditures in this period will amount to approx. PLN
6.5 billion, of which the Company intends to allocate nearly 40% to
development projects. Additionally, approximately 2% of capital
expenditures in Poland will be allocated to research and development
work including: solving technological challenges in the area of mine and
metallurgical production, issues related to sustainable development as
well as projects and innovations opening new directions of business
development.
The strategic intentions also include goals for the Polish companies of
the KGHM Group, where the overarching issues are the guaranteed safe
realisation and stability of the mining and metallurgical processes of
KGHM as well as priorities as regards sustainable development
influencing the enhancement of environment protection, social
responsibility and the achievement of stable economic results.
The realisation of the Strategy of the KGHM Group 2055+ is planned in 3
time horizons:
Short-term, up to 5 years _to 2030_ - Strengthening of the core
business,
Medium-term, 5+ years _to 2035_ - Extension of the value chain and
decarbonisation,
Long-term, 10+ years _after 2035_ - Development of a multi-resource
portfolio.
Legal basis: Art. 17 _1_ of MAR _Regulation _EU_ No 596/2014 of the
European Parliament and of the Council of 16 April 2014 on market abuse
_market abuse regulation_ and repealing Directive 2003/6/EC of the
European Parliament and of the Council and Commission Directives
2003/124/EC, 2003/125/EC and 2004/72/EC
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RB: Zatwierdzenie Strategii Grupy Kapitałowej KGHM Polska Miedź S.A. 2055+
