KGHM POLSKA MIEDŹ S.A.
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R&D’s contribution to the strategy


In the mining and copper smelting industry, the key factor decisive for competitiveness of enterprises is the unit cost of the production of copper, and resources of raw materials held. The research and development (R&D) work in this sector is therefore focused mainly on exploring and identifying geological and mining assets, optimising the production process, and reducing the costs of operating activities. The basic directions of actions performed in the Company do not differ significantly from those undertaken by other entities in the industry.
 

 


The relations between the copper industry and the R&D sector are very strong and result from the constant efforts of the Company to optimise its business processes and introduce innovation in its industrial practice. KGHM Polska Miedź S.A., from its outset, pays considerable attention to development, including R&D activities. Global companies involved in copper mining allocate approximately from 0.01% to 1% of their revenue to R&D activities. The level of outlays on R&D efforts ranks the Company in the lower range of this bracket, but it has been growing for several years. The intensity of outlays on R&D ac­tivities in KGHM is at the level of 0.11%–0.17% of its income. In 2011, R&D expenditure amounted to ap­proximately PLN 35 million.

In 2006–2011, the Company’s outlays on external R&D work and scientific expert opinions exceeded PLN 118 million. A considerable part of these expenses (almost 48%) is either directly or indirectly related to the responsibility for the business conducted and its impact on its broadly understood environment. KGHM’s R&D activities are mainly financed from the Company’s own funds, and some undertakings are subsidized by the Polish Agency for Enterprise Development (Polska Agencja Rozwoju i Przedsiębiorczości), the National Research and Development Centre (Narodowe Centrum Badań i Rozwoju) and funds coming directly from the EU in case of engagement in framework programmes of the European Union.

 

The intensity of outlays on R&D activities in KGHM is at the level of 0.11%-0.17% of its income. In 2011, R&D expenditure amounted to approximately PLN 35 million.Independently or with partners

KGHM conducts research and development work with its external partners. It also has dedicated daughter-companies which act within the group. One of the main entities which perform R&D tasks is the R&D centre, KGHM Cuprum sp. z o.o. Centrum Badawczo-Rozwojowe. It was established in 1994, following the restructuring of Zakłady Badawcze i Projektowe Miedzi “Cuprum”. It was a dedicated unit, established in 1968, which acted within the structure of the then-existing mining and smelter complex, Kombinat Górniczo-Hutniczy Miedzi. In 2002, by a decision of the Minister of Science, Cuprum obtained the status of a research and development unit, and in 2007, Cuprum CBR was entrusted by the Ministry of Science and Higher Education with the function of the Industry Contact Point for Sustainable Development of Copper and Lignite Mining Industry in South-Western Poland (Branżowy Punkt Kontaktowy Zrównoważonego Rozwoju Przemysłu Wydobywczego Miedzi i Węgla Brunatnego Polski Południowo-Zachodniej). The enterprise carries out analytic, R&D and design work in areas such as mining, geology and hydro-geology, ore enrichment, environmental protection, tailings storage and new power technologies.

The analytic and R&D work related to managing by-products of the production of copper and silver, and wastes generated by this process is performed by KGHM Eco-ren sp. z o.o. The Raw Materials Recovery Division of KGHM Ecoren conducts R&D work and provides technological services related to hydrometallurgical processes and enrichment of ores of non-ferrous metals. Inova Centrum Innowacji Technicznych sp. z o.o. is an entity specialising in R&D services in respect of electro-technics, automation and communication systems as well as certification and attestation of machines and equipment.

The KGHM Polska Miedź S.A. Group also has a specialist analytic laboratory, Centrum Badania Jakości sp. z o.o., and a design entity, Bipromet S.A. Also, other members of the KGHM Polska Miedź S.A. Group, such as Przedsiębiorstwo Budowy Kopalń Pebeka sp. z o.o., which builds shafts and galleries, and Dolnośląska Fabryka Maszyn Zanam Legmet sp. z o.o., a manufacturer of mining machines and equipment, participate in research projects.

The Company’s strategy for 2009–2018 assumes improvement of the effectiveness of the production process (investments in new technologies, modernization of infrastructure), as well as the development of resources. The effectiveness of these activities depends, inter alia, on the comprehensive nature and quality of research work and ability to apply them in practice. In 2009, the Company signed with the Polish Agency for Enterprise Development an agreement on a subsidy from the European Regional Development Fund for a research and development project entitled: “Development of KGHM extraction technology with the use of the ACT complex”. The total amount of subsidy granted is PLN 38.2 million, which represents 25.4% of the outlays planned for this undertaking. The research part is expected to be completed in 2013, and the implementation will take place in 2014–2015. The next stage of the project “Technology of hydro-metallurgical processing of semi-products and concentrates of copper in the Ore Enrichment Division Lubin region” has been completed by the Chemistry Faculty of Wrocław University of Technology. In this project, KGHM Polska Miedź S.A. plays the role of an industrial partner and end-user of the proposed solutions.

Another commenced project which is carried out in cooperation with AGH University of Science and Technology, Tauron and ZGH Bolesław, is the Critical Metals Centre which will carry out a stock count of resources of critical elements (of key importance for the EU economy), production, processing, and sale of these elements and their compounds. This project also involves research work aimed at innovative use of the elements obtained, e.g., for construction of prototypical solar panels using new technologies based on CIS (copper indium selenide). An understanding to this effect was signed in October 2011.
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Directions and areas of the Company’s R&D activities

KGHM has also declared its accession to a project subsidised from the funds of the National Research and Development Centre (NCBR) aimed at determining the possibility of implementing in Polish industry an innovative concept of a high-temperature reactor of the 4th generation (HTR) characterized by the high level of safety of use and operation. In this way, the Company wants to extend its expertise in power generation, including nuclear power, and also verify whether the HTR technology could be used in industrial conditions, as well as verify to what extent the enterprise’s power needs could be satisfied with nuclear energy. An agreement on the scientific and industrial consortium for the purposes of filing an application with the NCBR was signed in December 2011.

The Company actively engages in national and international R&D projects in its sector. These are, for example, the “Geocentrum Polska” project of a Polish platform associating key research entities and enterprises in the geological sector, the EFRB (Explosive Rock Breakage Initiative), a forum dedicated to seeking alternative solutions for non-explosive methods of excavating hard rocks, or the Scandinavian initiative SMIFU (Smart Mine of the Future), i.e., a projection of a model “intelligent” mine of the future.

In its research and development activities, KGHM Polska Miedź S.A. cooperates not only with members of its own group, but also with the Non-Ferrous Metals Institute in Gliwice, AGH University of Science and Technology in Kraków, the Central Mining Institute in Katowice, Silesian University of Technology in Gliwice and Wrocław University of Technology, Wrocław University of Environmental and Life Sciences, Wrocław Medical University and the National Geological Institute in Warsaw. Foreign cooperation comprises, inter alia, Outotec in Finland, LULEA Technical University (LTU) in Sweden, CANMET Research Centre in Canada, BRGM Research Centre in France, and also design companies and industrial partners, inter alia, De Nora in Italy, Chematur Engineering in Sweden, Electrometals Technology in Australia and Dynatec in Canada (smelting), as well as SGS Lakefield or Metso Minerals (processing of ores) and Caterpillar and Sandvik (mining).
Report on shortcuts
Jan Kochanowski (1530­-1584) – poet and playwright of the Renaissance period, graduate
of the Kraków Academy and the Universities of Koenigsberg and Padua, secretary to
King Zygmunt II August of Poland. Considered one of the most outstanding authors of the
Renaissance in Europe and the most eminent Slav poet who contributed to the development of the Polish literary language.
*Translation:
Teresa Bałuk-Ulewiczowa, Ph.D.
Insitute of English Philology
Jagiellonian University in Kraków