Pillar III. Production

The third pillar of the 2015-2020 Strategy aims to secure stable production through:

  • an increase in production capacity
  • cost reduction
  • implementation of modern technologies
  • improvement of workplace health and safety (H&S)

An increase in production capacity is envisaged both under- and aboveground, at home and abroad.

In Poland, an increase in mining intensity should lead to the attainment and maintenance of 32 million tonnes of dry weight orelexicon.png output per annum. The Żelazny Most tailings storage facility will be expanded by a Southern Quarter. Additionally, the metallurgical plants will launch a new product range, corresponding to market needs.

Abroad, an increase in production capacity will be achieved first and foremost by the achievement of full phase I design capacity of the Sierra Gorda Project. In the second half of 2015, the mine is expected to reach the designed ore processing capacity of 110 thousand tonnes per day. Under the new Strategy, the Company plans to start Phase II of the project (reaching ore processing capacity of at least 190 thousand tonnes per day) and to commence the processing of oxide ore at the mine. These activities will enhance operational efficiency and boost the copper output of the mine.

Thanks to the Sierra Gorda mine, KGHM will also become one of the leading global producers of molybdenum. The expected output should exceed 11 thousand tonnes per year.

Molybdenum was discovered in the 18th century and has many uses. When combined with steel the resulting alloy becomes stronger, has a higher melting temperature and offers corrosive protection. Molybdenum alloys are used in aviation, in the petrochemical sector, in transport and in pipeline construction. Molybdenum is also used in the chemical sector as an additive to lubricants, fireproof material, or as pigment added to paints. The metal is also used in multivitamins, mainly as a daily supplement – the human body contains approximately 0.07 milligrams of molybdenum per kilogram of body mass.

Milestones to the year 2020

Milestones to the year 2020

Cost optimisation

The new Strategy aims to reduce manufacturing costs in the KGHM Group. These costs are expected to be reduced by around 10 percent by 2020.

Costs in the KGHM Group

Lower costs and higher efficiency will come as a result of a number of planned strategic actions, with the major ones including:

  • optimisation of the management of machines used in the mines, and reduction of their number
  • optimisation of maintenance management through the implementation of IT tools to track wear and tear of machinery and equipment, including their maintenance costs
  • automation of manufacturing lines
  • production of high quality concentrate in parallel to copper and associated metal recovery maximisation
  • the energy saving program in the KGHM Group.


Employee safety has always been a paramount value at KGHM. It is one of the key elements associated with mining, and the 2015-2020 Strategy sets forth a number of standards aimed at enhancement of workplace health and safety at the Group’s operations. By 2020, KGHM plans to reduce the accident rate per million hours worked, from the current level of 10.35 to 5.4. The long-term objective of KGHM is to reach the level of 0 in the Lost Time Injury Frequency Rate (LTIFR).


Employee H&S as well as output efficiency will also improve thanks to the latest technologies. A pivotal role here will be played by the automation and robotization of processes, which will reduce human involvement in the most hazardous phases of the production process in the mines. One of these projects is the development of a “Smart Mine”. Once the project has been completed – scheduled for 2045 dangerous tasks will be performed by a machine, controlled by an operator from a safe place. Work on this and other innovative solutions is currently underway. This work is partially financed by the National Centre for Research and Development.