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INTRODUCTION

This report is the only corporate social responsibility statement published by a mining sector company. When preparing this report, we did our best to present our operations in transparent and accurate way. We want our stakeholders to understand the business decisions we make and the opportunities and threats we are facing.

The second CSR Report of KGHM Polska Miedź covers the entire value chain of the Company, including the following Divisions: Lubin Mine, Polkowice-Sieroszowice Mine and Rudna Mine; Cedynia Wire Rod Plant, Głogów Smelter and Legnica Smelter; Ore Enrichment Plants, Tailings Plant, Data Center and Mine-Smelter Emergency Rescue Unit. (3.6)

(3.1) The figures and information presented in this report pertain to activities conducted by the Company over the last three years i.e. in 2012, benchmarked against 2010 and 2011. The reporting period begins on 1 January 2012 and ends on 31 December 2012 and covers the time of crucial significance for understanding the breakthrough in the history of the organisation.

2012 was a year of major developments for the Company, both on the domestic market (renewal of concessions for mining operations for another 50 years) and on the international market (acquisition of Quadra FNX Mining Ltd. and establishment of KGHM INTERNATIONAL LTD). Transformation into a global company within the Capital Group will have a significant impact on KGHM Polska Miedź S.A. (3.7, 3.10). In order to give our stakeholders a comprehensive and meaningful insight in our situation, we have decided to extend the report to include descriptions of good practices associated with the takeover of Quadra FNX Mining Ltd. and with the operations of KGHM INTERNATIONAL LTD, KGHM Energetyka, Cuprum and Letia. The descriptions are outside the scope of the GRI indicators presented in the report. (3.8) We have not identified other factors which could have a major bearing on the comparability of the organisation’s activities vs. the previous reporting period.

Bar Raised Higher

Once again, we have prepared our report in line with the highest international reporting standards based on the Global Reporting Initiative methodology. G 3.1. Our previous publication ”Corporate Social Responsibility Report 2010–2011 of KGHM Polska Miedź S.A.” (3.2) was awarded in 2012 in the competition for the best corporate social responsibility reports organised by the Ministry of Economy (www.raportyspoleczne.pl). The judges appreciated a good balance of the social and economic aspects. As we want to improve our processes and meet the expectations of our stakeholders even more effectively, this year we have decided to extend the list of subjects and indicators covered and move from GRI Application Level C to B. (3.11) In this report, you will find 16 more Profile Indicators and 12 more Performance Indicators versus the previous report. We have elaborated on the themes of organisation supervision and management, suppliers, human rights and product responsibility.

(3.5) In the report, we have tried to focus on the issues important from the perspective of the business, industry, sustainable development strategy and corporate responsibility. The process of determining the contents of the report has been based on a series of interviews with the senior managers of KGHM. Overall, close to 60 persons were involved in the reporting process. The diagram presented below shows important aspects which we have identified as areas for discussion and action, subjects which affect us most, which are interesting to you and over which we have most influence.

The relevance matrix presents a list of issues which, in the opinion of our management, are crucial for KGHM Polska Miedź S.A. from the perspective of sustainable development and corporate responsibility. We have tried to focus on the subjects which are significant both to KGHM and to our shareholders. Our Corporate Social Responsibility Strategy was developed on the basis of those themes and you will find numerous references to them in this report.

Due to new calculation methods, adjustments have been made to indicators EN3 and EN4. In the current report, the data have been calculated on the basis of the figures from the Central Statistical Office reports. (3.10) All data have been sourced from the Company’s internal systems. The greenhouse gas emissions monitoring standards are based on the unified methodology of KGHM Cuprum CBR Sp. z o.o. (3.9)

(3.3) We have adopted the annual reporting cycle. In subsequent years, following the latest trends, we are planning to prepare the organisation for reporting based on IT solutions to increase the quality of the reported information, for a transition to the new GRI G4 standard, extension of the scope of the report and (3.13) external verification.

(3.4) If you wish to share with us your opinions or offer feedback which might be significant for the future reporting processes of KGHM, please contact Krzysztof Kułacz, Communication and CSR Department Manager, by email at k.kulacz@kghm.pl or telephone at +48 76 74 78 123).

 

Diagram 1. Relevance Matrix and List of Issues


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KGHM Polska Miedź S.A. is the winner of the Most Attractive Employer title in third edition of the Randstadt Award survey held in Poland. The high employment standards maintained in Poland will be implemented in all KGHM Group companies worldwide.