The rapid changes taking place in the mining industry related to macroeconomic, technological, social and legislative challenges represent a test for the entire extractive sector and determine the way in which mining companies set their strategic targets. The following factors have the greatest impact on the commodities sector:

  • Global economy: the speed and rate of economic growth, trade conflicts, customs goals, infrastructure development (urbanisation),
  • European economy: economic growth in the Eurozone, the final shape and possible impact of Brexit,
  • Monetary policy: interest rates, borrowing costs, currency volatility, investment risks,
  • Situation in the mining industry: degree of involvement in investment projects involving mining, the opening/closure of mines,
  • Policies: energy, environment, trade (restrictions in the import of scrap),
  • Growth in the significance of new mining technology: digitalisation, 4.0 industry, artificial intelligence,
  •  Outlook for the metals markets: demand for / supply of commodities, price forecasts and assumptions, increased demand for selected metals: nickel, copper, cobalt, lithium, related to the further development of the consumer electronics segment, dynamic changes in the transportation industry (EV), but also in the impact of the growing demand for electricity and the development of renewable energy sources (RES) and the associated development of distribution networks and storage systems.

In the medium and long terms perspective, the competitive situation and results achieved will be primarily shaped by the global megatrends identified during work on the 4E Strategy in the following manner:

1. Technological watersheds

This megatrend is primarily composed of the following factors:

  • The so-called 4.0 Industry – enhancing capacity by combining technological changes with the organisation of work in the production sector
  • The universality of analysing large batches of data to support decision-making (Big Data Analysis),
  • Internet of Things – IoT): connecting equipment with in-built electronics and software to the internet, enabling the acquisition of information on the functioning of this equipment and its analysis in real time,
  • Digitalisation: universal utilisation of digital/technological solutions to improve corporate functioning,
  • The developmenrt of Artificial Intelligence (AI).

2. Demographic and social changes

This megatrend is primarily composed of the following factors:

  • Knowledge-based society: an increase in the importance of human capital, especially in the context of the development and utilisation of modern technology,
  • Ageing society: universal extension of a person’s period of professional activity,
  • Generation „Z”: entrance onto the market of a new generation of employees with specific requirements and behaviors which are substantially different from those previously seen,
  • „Localness” trend: cooperation with local communities, supporting the creation of a positive corporate image.

3. Depletion of natural resources

This megatrend is primarily composed of the following factors:

  • New production methods – the application of modern methods, enabling a decrease in the consumption of natural resources, including the use of re-cycling to a much greater extent than to-date,
  • Closed-circuit economy – greater use of deposits and reduction in environmental impact,
  • Depletion of „easily-accessed” deposits – more difficult geological conditions resulting in higher mining costs, and consequently the need for changes in mining techniques or for searching for new deposits,
  • Volatility in commodities prices: Market risk related to volatility in commodities prices.

4. Climate change

This megatrend is primarily composed of the following factors:

  • Greater importance of  renewable energy sources: larger share of RES in energy generation,
  • Focus on environmentally-friendly production: Changing consumer demands, also related to attention being paid to the means of production, and not only on the quality and price of the end-product,
  • Electromobility - dynamic development of electromobility to protect the natural environment,
  • Tighter environmental regulations – active regulatory policy as regards environmental protection – new laws covering e.g. polluting emissions.

5. Changes in global economic power

This megatrend is primarily composed of the following factors:

  • Rise in the significance of the economies of China and India – the rate of growth of the economies of China and India means that they are becoming increasingly important economies on the global scale,
  • Risk of restrictions to free trade: Political decisions upsetting the global business-economic balance,
  • Diversification through the development of new areas of activity: Global corporations are diversifying their operations by entering new areas of activity,
  • Increase in competitiveness: greater competition of economies and companies.

6. Rapid urbanisation

This megatrend is primarily composed of the following factors:

  • The growth of cities and increased demand for raw materials - rapid growth of cities related to development of infrastructure, generating demand for raw materials,
  • Intelligent buildings/cities – popularisation of new technological solutions in urban construction and infrastructure,
  • Improved living standards - Higher standards of living,
  • Increased share of the services sector – increase in the share of this sector in the economy.

Strategic development directions for the KGHM Group

As a result of the analysis and synthesis of six global megatrends, four strategic development directions were developed for the KGHM Group: Elasticity (flexibility), Efficiency, Ecology and E- industry. The following actions comprise the individual strategic directions of the 4E Strategy:


Adaptation of the operating model of the KGHM Group to a changeable market environment:

  1. Rational management of the resources of the Legnica-Głogów Copper Basin.
  2. Optimisation of metallurgical production.
  3. Mining projects in Poland.
  4. Optimisation of the international assets portfolio.
Efficiency: Improved efficiency in the use of resources and production processes
  1. Programs to restrict energy consumption.
  2. Replacement and availability of mining machinery.
  3. Innovation which optimises the production line – CuBR program.
  4. Work to increase the use of factoring.
Integration of the KGHM Group around the idea of sustainable development
  1. Adherance to BAT Conclusions.
  2. Occupational Health and Safety Program.
  3. Closed-Circuit economy.
  4. Development of the Żelazny Most Tailings Storage Facility.
  5. Electromobility.
Technological transformation under the KGHM 4.0 program
  1. Work on advancing projects under the KGHM 4.0 Program.
  2. Advancement of projects related to automisation of production lines in the mines and metallurgical facilities.

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