National security means also security of raw materials

Security – this word has dominated all political and economic debates for many months. It refers primarily to military security, but the security of raw materials cannot be forgotten. KGHM, which for years has been one of the world’s leading producers of non-ferrous metals, ensures such security for Poland.

The world’s largest economies would not be able to function without guaranteed access to the key raw materials that fuel their growth. Poland is also working in this direction, which is our raison d’etat, not only economically. There is no exaggeration to say that the copper produced by KGHM is a strategic raw material of the future, used, among other things, in solutions that enable the energy transition. Copper can be found in wires, electrical installations, cars, electronics and construction. It is also used in the military sector, e.g. for the production of ammunition jackets, which was reflected in the recently signed cooperation agreement with the Polish Armaments Group.

The importance of copper is underlined by a decision taken in August this year by the world’s largest economy, the United States of America. Its Department of Energy added the red metal to the list of critical materials. The justification emphasised its importance for global technology supply chains in the energy transition. It also stated that copper is a major contributor to US economic and national security, with demand forecast to double by 2035, mainly due to plans of transitioning to clean energy, further electrification and expansion of water infrastructure. “Our nation would be vulnerable without electricity and copper’s critical role in its production, transmission and distribution,” the US Department of Energy concluded.

We cannot disagree with this justification of the US administration for the role played by copper in the economy. With KGHM being the 8th largest producer of this metal in the world and with access to deposits on 3 continents, Poland is secure in the availability of this raw material. It is our insurance policy for the future, which will allow us to make a significant contribution to broader plans for sustainable economic, social and environmental development. After all, copper is the cornerstone of energy innovation, especially ‘green energy’.

The world and Europe are focused on a wide-ranging energy transition: renewable energy sources, electromobility, expansion of energy infrastructure. It is clear in the figures that the demand for red metal in these areas will grow. For example, it takes up to four times as much of this raw material to produce an electric vehicle compared to an internal combustion car. Copper is also essential for the development of renewable energy: a 3 MW wind turbine contains as much as 4.7 tonnes of the red metal, while erecting a 1 MW solar power plant means consuming 3.1 to 4.5 tonnes of copper.

KGHM is already a leader in its business in Europe. To a continent which is experiencing a permanent deficit – copper production in Europe is significantly lower than the demand for the metal – our company is an important player and will remain so. Europe is not resource-rich, so the access to metal deposits which KGHM offers is an extremely valuable asset.

However, KGHM’s raw material wealth is not only copper. The company ranks first in the list of “world’s largest silver mines” and is also the world’s second largest producer of silver (1327 tonnes in 2022). KGHM also supplies the market with gold (around 3 tonnes a year), while thanks to its Chilean mine Sierra Gorda, the copper giant is gaining an increasingly strong position on the molybdenum market, used in the aerospace, defence, oil, nuclear and electronics industries, among others. The company is exploring new business lines, by working, for example, on extremely promising deposits of polyhalite, i.e. potassium and magnesium salts, which could be a substitute for nitrogen fertiliser groups. The company is also developing a project for the construction of an evaporated salt plant. Thanks to various activities in the area of mining, KGHM ensures the country’s raw material security and is an important economic pillar of Poland.