Strategy of KGHM Polska Miedź S.A. for the years 2017-2021 with anoutlook to the year 2040

On 11 May 2017 the Management Board of KGHM Polska Miedź S.A.("Company") adopted a resolution on establishing the Strategy of KGHMPolska Miedź S.A. for the years 2017-2021 with an outlook to the year2040 ("Strategy"), which was subsequently approved by the SupervisoryBoard of the Company.

The Strategy is oriented towards stable, long-term activity, based onthe rational and sustainable utilisation of resources. This goal will beattained by developing assets, increasing production and safety and bydeveloping a coherent Group organisation, at the same time ensuringfinancial stability and further development of corporate socialresponsibility and innovation.

The main goal of the Strategy is to achieve EBITDA of the Group at thelevel of PLN 7 billion in 2021 as well as an average EBITDA margin forthe Group of over 20% in the years 2017-2021.

1. Priorities of the Strategy of KGHM Polska Miedź S.A. for the years2017-2021 with an outlook to the year 2040.

- EBITDA of the Group at the level of PLN 7 billion in 2021 as well asan average EBITDA margin for the Group of over 20% in the years2017-2021.

- Total equity investments and capital expenditures by the Groupdomestically and abroad at the level of PLN 15 billion in the years2017-2021.

- Stable average annual production by the domestic and internationalassets, with costs guaranteeing financial security.

- Operations compliant with the concept of sustainable development toharmonise the mutual expectations of stakeholders in terms of achievingeconomic, social and pro-environmental goals.

- Financial stability to achieve the adopted investment program on timeand on budget.

- Orientation towards innovative solutions to improve productivity.

- Readiness to bring the international assets to full, matureproductivity to maximise revenues and the rate of return on foreigninvestments.

- Utilisation of the potential of the KGHM Polska Miedź S.A. Group'scompanies.

2. Basic business assumptions

Maximise the value of the international assets by:

- removing bottlenecks in and increasing the production capacity of theSierra Gorda mine to the average annual level of approx. 70 thousandtonnes of mined copper annually (on a 55% basis) in the years 2017-2021;

- mining in the Robinson mine until the end of 2022 under the mostfavourable scenario for KGHM Polska Miedź S.A.;

- operating the Carlota, Franke and Morrison mines and preparing a planto extend their mine lives on the basis of resources within nearbydeposits; and

- preparing optimal financial and operational plans for the execution ofthe Sierra Gorda Oxide, Victoria and Ajax projects.

Maintaining and developing production in Poland, of which:

- continuation of the project to access the Głogów Głęboki-Przemysłowy(Deep Głogów) deposit, of the Pyrometallurgy Modernisation andMetallurgy Development Programs, and development of the Żelazny Mosttailings storage facility, as well as commencement of the project toaccess the Radwanice-Gaworzyce deposit;

- exploration and documentation of copper ore deposits in the followingareas: Synklina Grodziecka, Konrad, Retków-Ścinawa, Głogów, BytomOdrzański and Kulów-Luboszyce; and

- execution of geological projects concerning other resources, e.g. theproject to explore and document the potassium-magnesium salt deposit inthe area of Puck.

Development of a coherent and effective KGHM Polska Miedź S.A. Group:

- organisational integration by improving management processes andstandards;

- organisational and cost optimisation of the values chain; and

- cooperation with respect to a sustainable supply chain.

Securing financial stability:

- consolidation of borrowing by the Group and utilisation of funds aimedat the implementation of development projects;

- implementation of uniform financial processes within the Group,including the management of credit, currency and market risks; and

- maintaining the ratio of Net Debt to Adjusted EBITDA at the level ofbelow 2x, with the prospect of achieving the optimal level of below 1x.

A Company open to innovation:

- increase the role of innovation in the KGHM Polska Miedź S.A. Group;

- innovation as the road to development and raising productivitythroughout the Group;

- concentration on the intellectual capital possessed and on protectingintellectual property; and

- promotion of co-authorship as regards innovation, and cooperation withthe academic/scientific and business spheres.

Corporate Social Responsibility:

- strengthen the positive image of the KGHM Polska Miedź S.A. Group;

- build a picture of the Group as both environmentally-friendly andhealth-friendly;

- maintain the Company's status as being socially responsible;

- continue effective co-operation with local communities and internalstakeholders;

- solidify the Group's position as a trusted and stable business partnerand responsible employer; and

- improve the efficiency of internal and external communications by theKGHM Polska Miedź S.A. Group.

Legal basis: Art. 17 (1) of MAR (Regulation (EU) No 596/2014 of theEuropean Parliament and of the Council of 16 April 2014 on market abuse(market abuse regulation) and repealing Directive 2003/6/EC of theEuropean Parliament and of the Council and Commission Directives2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of theEuropean Union dated 12 June 2014, no. L 173/1)