In 2017, capital expenditures for investments in property, plant and equipment at KGHM Polska Miedź S.A. amounted to PLN 2,053 and were lower than in the previous year by 22 percent. Together with the incurred expenditures for uncompleted development works, the capital expenditures amounted to PLN 2,057 million.
Structure of expenditures for property, plant and equipment and intangible assets of KGHM Polska Miedź S.A (PLN million)

2017
2016
Change (%)Q4 2017Q3 2017
Q2 2017
Q1 2017
Mining
1,286
1,164
+10.5

486
353
244
203
Metallurgy
735
1,435
(48.8)
248
165
167
155
Other activity
32
25
+28.0

21
3
4
4
Development works - not completed
4
6
(33.3)


1
3


Total2,057
2,630
(21.8)
755
522
418
362
including costs of external f nancing
61
90
(32.2)
26
11
14
10

Investment activity included the performance of replacement, maintenance and development projects. 

Replacement projects – to maintain production assets in undeteriorated condition make up 29 percent of total incurred expenditures. 

Maintenance projects – to maintain mining production at a level def ned in the approved Production Plan (expansion of infrastructure according to the progress of mining works) make up 25 percent of total incurred expenditures. 

Development projects aiming to increase the production volume of the technological process, implement technical and technological activities optimizing the use of the existing infrastructure, maintain production costs and adjust the company’s activity to the changing standards, legal norms and regulations (adjustment projects and those connected with environmental protection) make up 46 percent of total incurred expenditures.

Replacement projects:
  • replacement of the machinery in the mines
  • reconstruction of the infrastructure
Maintenance projects:
  • reinforcement of the mining areas
  • purchase of machines for the VCP Program
  • construction of shaft SW-4
  •  ”Żelazny Most” project, expansion of the Tailings Storage Facility ensuring the capacity to store flotation tailings after 2016
Development works:
  • program of Providing Access to Deposit
  • changing the function of shaft L-VI to install a
    mine cage and skip compartments
  • excavating preparatory drifts using a set of roadheaders
  • modernization of classification systems at the Ore Enrichment Plant
  • Pyrometallurgy Modernization Program
  • Metallurgy Development Programa
  • Increasing manufacturing capacity up to 160 thousand Mg of copper cathodes per year in the Branch

Capital expenditures of the KGHM INTERNATIONAL LTD. segment in 2017 amounted to USD 147 million, and thus increased by USD 39 million (+36%), compared to 2016. Nearly 80 percent of the expenditures were incurred in the Robinson mine and were mainly connected with removing overburden. The increase in the expenditures compared to the previous year concerned works of providing access to the deposit for further exploitation as well as drainage of the Robinson mine. 

Expenditures of KGHM INTERNATIONAL LTD. connected with projects in 2017 amounted to USD 10 million, including USD 5 million for the Victoria project (works connected with protecting the existing infrastructure), USD 3 million for the Ajax project and USD 2 million for the Sierra Gorda Oxide project. In Q2 and Q4, KGHM INTERNATIONAL LTD. co-financed the Sierra Gorda mine in the total amount of USD 127 million to repay the debt incurred for the construction of the mine.

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