KGHM Polska Miedź S.A.
KGHM Polska Miedź S.A. is the 9th-largest producer of copper and the 3rd-largest producer of silver in the world. The electrolytic copper of KGHM is registered by the London Metal Exchange (LME) as „Grade A", while its silver – in the form of bars – are registered under the KGHM HG brand, and hold a "Good Delivery" certificate, issued by the London Bullion Market Association (in 1995) and by the Dubai Multi Commodities Centre (in 2006). Other products of KGHM include gold, lead, sulphuric acid and rock salt.
KGHM is one of the largest Polish exporters, the largest employer in Lower Silesia, and a significant part of the WIG20 index. The year 2007 saw record results in the production of electrolytic copper – 532 974 t – and of metallic silver – 1 215 t, and above all a record profit – nearly PLN 3.8 billion and a future promising steady growth and an increase in the value of the Company.
KGHM Polska Miedź S.A. owns shares in 21 entities, operating in various production and service-related areas. The value of the Company is significantly impacted by its telecom assets.
History of Company
After the Second World War, in 1951, two copper mines "Lena" and "Konrad" were restarted after their dewatering, and the repair and installation of necessary equipment. In the same year construction of the "Legnica" copper smelter and refinery was begun, in order to process copper concentrate for the "Lena" and "Konrad" mines. The beginning of the state enterprise Copper Mining and Smelting Industrial Complex (KGHM) and development of the Polish copper industry in the current form dates back to the 1950s and should be associated with the discovery of the large copper deposit in the Lubin and Polkowice region by a team of geologists under the supervision of engineer Jan Wyżykowski. In order to exploit the newly discovered deposit the Minister of Heavy Industry formed (by a decree dated 28 December 1959) the state company "Lubin mine under construction". The company was entered in the state enterprises register in the Finance Ministry in section A under no 582. The Minister of Heavy Industry by its decree from 5 April 1961 changed the company name to the "Copper Mining and Smelting Industrial Complex under construction", and by a decree dated 30 December 1968 the same minister established the final name of the company - "Copper Mining and Smelting Industrial Complex".
KGHM was a multi plant company, and included mines, smelters and refineries, and many other auxiliary and service plants. There were two ways of forming the plants belonging to KGHM:
In the years 1960-1991 the following companies were the part of the Copper Mining and Smelting Industrial Complex:
KGHM declared the level of 25 % of the target level of ore extraction for a given mine as being the moment at which the said mine was considered as having attained full production. Consequently, the mines of KGHM are considered to have commenced mining activity in the following years: the Lubin mine in 1968; the Polkowice mine in 1968; the Rudna mine in 1974; and the Sieroszowice mine 1986.
1973 saw the beginning of the closure of the Lena mine, due to depletion of the ore supply. The ore reserves of the Konrad mine were finally exhausted in 1987. In January 1996 the Polkowice-Sieroszowice mine division was formed by joining the two mines Polkowice and Sieroszowice.
From the state enterprise was established until 9 August 1976, supervision over KGHM was carried out by the Ministery of Heavy Industry, and then by the Minister of Metallurgy, which was later transformed into the Ministery of Metallurgy and Heavy Industry.
By a notary act dated 9 September 1991, the state owned company Copper Mining and Smelting Industrial Complex was transformed into the state-owned, joint stock company KGHM Polska Miedź S.A. On 12 September 1991 the company was entered into the commercial register by the Regional Court in Legnica under the number RHB 621. On the same day the Court issued decision number V Ns-Rej PP- 250/91-PP-111, based on which the Copper Mining and Smelting Industrial Complex was removed from the list of state enterprises, and a multi-divisional company was created. As a result of actions taken by the Company aimed at restructuring and diversifying the activities of the Company, some divisions were tranformed into subsidiaries of KGHM.
The KGHM Polska Miedź S.A. Group is composed of around thirty entities. Most of these were formed by the restructurisation of KGHM – which are still related to the core business of the Company. KGHM also owns equity shares in companies involved in diverse activities: the health services (MCZ S.A. – 100 % of the shares); tourism (Interferie S.A. - 100% of the shares); telecoms (Telefonia Dialog S.A. – 10 %; Polkomtel S.A. – 26 % of the shares).
Since July 1997 the shares of the company have been listed on the Warsaw Stock Exchange, while its GDRs (Global Depositary Receipts) have been listed on the London Stock Exchange. KGHM Polska Miedź S.A. has adopted corporate governance principles and has adapted the internal regulations of the Company to the Code of Best Practice. The goal of the management of KGHM remains to ensure that the interests of the shareholders and of all other stakeholders in the Company are protected and respected in a spirit of trust, clarity and openness in the operation of the Company.