Szanowni Państwo, witam serdecznie. Ladies and gentlemen, I would like to give you a warm welcome at the conference, uh, of, uh, in which we will present the results originally published yesterday, uh, results concerning the third quarter results at KGHM. My name is Lidia Marcinkowska, together with Marcin Czerwiński , who is the head of investor relationships. We will chair this meeting today. We welcome those present at the Warsaw Stock Exchange and those who are watching us online. Uh, the transmission, uh, is available in Polish and English. Ladies and gentlemen, the results of KGHM, uh, work after nine months, uh, will be presented by, uh, Tomasz Zdzikot , who is Vice President for Development. Andrzej Kensbok, who is Vice President for Finance, and Marek Świder, Vice President of the Management Board for Production, who is at the same time, uh, responsible for foreign assets.
We will start traditionally with the overall comment of the Management Board on the events of last quarter. We will proceed to a Q&A session. Traditionally, a transcript of today's meeting, including the Q&A session, will be available at our website, but we'll also include the questions which for they need to check details, or for the lack of time, will not be answered here in the room. The questions can be asked at the email to our Investor Relations Department. Mr. Tomasz Zdzikot, President of the Management Board.
Good afternoon, ladies and gentlemen. It is my first opportunity to talk to you in this role, so please allow me that before we present the results of KGHM after three quarters, I will give you a short introduction.
As Lidia has just said, first of all, I would like to bring to your attention the fact that our Management Board is working in a limited composition. We have double roles. I am responsible for Development and I'm Acting CEO. Marek is also responsible for two areas, including foreign assets. I would like to start with a message that it is extremely important to us to have the full composition of the Management Board, so that each Management Board can be responsible for one area of our operations. That is something that we believe will happen soon, and that is of highest importance to us. At present, we are focusing our attention above all on budgeting for 2023.
It is a great challenge for us, something that we have to do, reconciling cost pressures that we will talk about later today, and the implementation of an ambitious strategy, completion of our ambitious development plans. Now we are budgeting around those two pillars of activity, and that takes a great part of our attention at the moment. Once the Management Board is full in its composition, we will proceed to review our strategy. The strategy was announced to you at the beginning of this year. When I talk about review, I do not mean any final decisions that might have already been taken or that are likely to be taken soon.
However, drawing on the experience of those Management Board members who are now in our company, we also have hopes that with the new two members of the Management Board, we will be able to make a broader review, including macroeconomic environment and security environment. In the upcoming months, that will be a major task for the Management Board in its full composition. Also, as the President of the Management Board and acting also as Vice President for Development, I would like to say that it is very important to me to have development as one of our priorities. We will pay attention to that, and we will make sure that the key priorities are followed and implemented on schedule and as planned in our strategic perspective.
Within those plans, within our investment projects, I would very much like to focus on core business, copper production, silver production, and key projects, both in Polish and in foreign assets, focusing on our core business. This will be it as regards a brief introduction. Given it is my first conference, I wanted to have this broader overview. As for our results, they are good. We have growing revenues, 18% growth compared with the same period 2021. In my assessment, this is a good result, especially taking into account the left-hand side of the slide. That is our macroeconomic environment. We have major differences in copper quotations and silver quotations.
Of course, there is a positive contribution to this result coming from dollar value, and we have our settlements in US dollars, so exchange rate differences have their contribution. However, we have a positive assessment of the profit. The same goes for EBITDA. It is slightly lower than in the analogous period last year, but it is still positive. The result of the holding company, Polska Miedź, had a positive contribution to the result, and the minus comes from our foreign assets. We will revisit this topic later on today. We are particularly happy about our production results, and Marek will talk you through this. We are satisfied that the production results in Poland are all stable. In Poland, they are growing.
The minus is also something that we have already communicated to you, and it was linked to our foreign projects, divestment of the Franke mine and the quality of the deposit that we are now exploiting in Sierra Gorda. We had a growth in silver production, growing per unit cost, C1. You know perfectly well that this is mainly due to cost pressure, especially in the context of energy prices. I have already briefly mentioned production. Indeed, we are satisfied with it, and we are satisfied with the stability, the stable level of production, 557,000+ tons on mother company. This is the result which we consider satisfactory. About the role of Sierra Gorda, I have already talked a little bit.
Both Mr. Świder and Mr. Kensbok will, uh, tell you more about it, and I give the floor over to them right now.
Ladies and gentlemen, as a result our reduction-- our result on production in, uh, paid copper, we can see a split into Poland, Polish assets, and Foreign assets. In Polish assets, year-on-year, we have plus three thousand tons on copper, and this is also a positive contribution to the budget, uh, which we have in our production plans, about four thousand two hundred tons. As for foreign assets, and as Tomasz has already, uh, mentioned, I would like to, uh, emphasize that we, uh, are operating this year, uh, in a different phase of, uh, deposit exploitation. There is a different content of, uh, um, copper in this deposit.
The mass of our output is similar, but if we refer those results to our production plans for this year and our production plans in the budget, the situation is we were at +2% and + about 9,500 tons copper in nine months year-to-date. As regards foreign assets, Sierra Gorda International. At the KGHM International, we are at +13% versus budget. That is about 5,600 tons copper in plus in Sierra Gorda and lower content this year. Let me just remind you that last year the content of copper in Sierra Gorda was 0.51. This year it is 0.44. Sierra Gorda has the current result at 90.6%. That's a very good result.
If you track those results since the beginning of the year, you will see that this loss of 0.4% is already good compared with much greater losses previously. As for silver production, 1,022 tons, +1%. The main assets are Polish ones. We produced 1,000 tons of silver. As for foreign assets, 21 tons come from Sierra Gorda and one ton from Sudbury Basin. As for TPM, a very positive +6%, 132,000 ounces. As for molybdenum production, -66%. Let me draw your attention to the fact that this is still 16% above the budgeted target for Sierra Gorda. Let me move on to Polish assets. +0.9%, 23 million tons dry mass.
This result is higher, but we also had to catch up with the content of copper. Now it is 1.46% compared to the plan, and we managed to make up for the losses coming from copper production in recovery. As for copper production concentrate, 0.3% below the result year-on-year, also under the budget the same percentage. We have to mention that we had renovation of railway infrastructure, so that was a factor beyond our control. As a result, some of the concentrate remained in the ore settlement unit within Polska Miedź. Electrolytic copper production. We have our own input and third-party input presented here in the slide.
Our own input, 99% of the budget and third-party input, that is, 5% versus the budget. That is results from a different production timelines than we had last year. We had some relocations within the period we are discussing. Slowly we are reaching our budgeted values. The fourth quarter should turn out very positive. Silver production, +1.7%, 1,000 tons in Polish assets, a very good result. The following slides will also present more details of our assets. Now, Mr. Kensbok, who will comment financial results.
Good afternoon. Indeed, as Tomasz has just said, we have noted a solid and stable period over the first nine months of this year. I can say that it's continuation where mid-November, it's also solid and stable. I'll be speaking about this in a minute. No threats or extraordinary situations to report at this point. Now, regarding revenues, the first three quarters of this year, higher than last year by 18%. This is mostly due to the exchange rate of the Polish zloty and the relative weakening of the zloty vis-à-vis the dollar or strengthening of the dollar. This is favorable to us. We are taking advantage realistically on a transactional level from this. Also realistically, it is contributing to our profitability.
I will tell you more about this in a minute because the pace of weakening the zloty was higher than the inflation rate in Poland. That is another benefit to us. What's worth noting is the positive impact of the increased volume and of the sales of basic products, in both the copper sales volume in Polska Miedź S.A., as well as the sales of other products. Silver that we've mentioned, but we've got a whole range of other products as well. Lead, sulfuric acid, and all the other products have also positively contributed to our outcomes compared to last year. In the area of trade, we are very satisfied with our outcomes. A negative impact has been felt from the microeconomic situation, and that is the prices of copper that have dropped year-on-year. We budgeted this year quite conservatively.
We don't share budgeting details with you, but internally, we felt that the forecast that we made was quite realistic as it turned out. We also see that our evaluation of the market, which was volatile and quite weak, but had certain pillars of support, nevertheless gave us the grounds to believe that we could steadily continue our activity because the forecast that was predicting a deep recession and a breakdown, on the one hand, are not coming true. Well, of course, we don't know what the future holds. On the other hand, also the support from the demand for copper as well as the inflation rate, which causes some copper projects to fall out of the market over a certain price, and that reverses the demand situation, that also sustains the copper price, ultimately. Another plus side here is the adjustment of revenue for derivatives.
This year, our transactions were settled in the first three quarters with slightly on the negative side, but definitely less so than last year. What we sometimes talk about, something can be in negative but have a positive impact and vice versa. Well, this has actually acted to our benefit. We have a slight negative settlement of our securities transaction, but quite a positive contrast vis-à-vis last year. It's almost PLN 1 billion. Revenues, I'd say, are safe. Going on. Unit cost. C1, it's growing year-on-year. It's growing, unfortunately, despite a certain tax relief for extraction that has been applied to certain mines by the Treasury this year. Still, undoubtedly, for Polska Miedź, inflation has a role to play, increased energy costs, but also steel materials, explosives, and labor, third-party services as well.
All of that has an impact, a negative impact on us. For Polska Miedź, this is a 7% increase year-on-year, so we assume that we're still managing our increase. We are doing that every day. A lot of work has been put into trying to do the magic around inflation and renegotiate contracts so that realistic prices are put in place, and that happens every day. C1 grew much more significantly for KGHM International and Sierra Gorda, but that's related to a lower volume and a smaller production base to distribute the overhead, and we're assuming this is a temporary situation and it'll be turned around once the extraction starts growing. In Chile, we have also noted energy increases. That's quite significant. This is a country that imports 100% of their energy carriers, so that is not a surprise.
In the U.S., the energy price increase is slight. It's a lot lower. There are some inflation pressures there, but less so than in Europe and less so than in Chile. Now, regarding our operational performance, and like the President has said, EBITDA is smaller than last year by 10%, but we are happy to see the positive contribution from Polska Miedź and our operational results here are predictable and strong. Sierra Gorda has noted a significant decrease, which is due to decreased extraction by 12%. You cannot really make up for that even with increased efficiency. KGHM International also has a negative contribution year-on-year, but that's partially only related to decreased production and to a much larger degree, decrease in sales, which is due to ineffectiveness of rail transport in the U.S. We mentioned that already.
The USA is handling a systemic issue of bottlenecks in railway transportation. Unfortunately, we have felt the tremor. There aren't enough trains. There is not enough rolling stock and not enough capacity in railway transportation. This is a global situation. I do believe it's temporary. Some investment measures have been put in place already in the U.S. We have a lot of stock that we cannot take out of the U.S. and hence the negative contribution. Going to the net result, it's better by 11% year-on-year. Outside the change revenue offset by the basic core costs, we also buy materials at a marketplace. We were able to increase the throughput of third-party input, which is offset by the cost of these third-party inputs.
There are several more points that need a few words of explanation. Involvement in joint ventures, -PLN 1,770. This is PLN 717. We reversed the Sierra Gorda write-offs, but we turned them over less than we were able to do last year. We were able to turn around about PLN 1.8 billion, and this year, PLN 1.2 billion. We need to report that it's -PLN 700 million, but it's still another brick that we're putting into building the recovery of the value that was lost during the write-offs, where for Sierra Gorda, last year was a major year because it was the first one in the sequence when we actually were able to note a positive result, and that made it possible to turn around those write-offs. This year continues the trend, but not to such a great extent as before.
1.2 is already also quite significant and satisfactory for us. Now, out of the PLN 3 billion of revenue, we've got PLN 1.33 from exchange rate differences. We need to also settle the losses for the overestimation of dollar loans, and that will have an impact of PLN 1.33 on the net result. The derivative instrument is PLN 137 in plus. The profit on selling subsidiaries Inter-Ferro, Franke PLN 120 million, I think, in profit, and the sale of in-kind and non-material assets such as our shares in the Oxide project that was sold to joint venture Sierra Gorda, and that has had a positive contribution as well.
Unfortunately, we have paid a bigger corporate income tax this year because of bigger profitability on one hand, but on the other hand, because we transferred some of the settlements from previous years. The sum of the financials is PLN 5,267 million in plus. Okay, the financial flows, I have already mentioned that. Those are pretty much the same factors, but they are reflected in our cash flow. We're more or less on the same net operating cash flow that we had in the beginning of this year. That is about PLN 2 billion. We just paid a slightly higher dividend than last year. It was PLN 300 million last year, and it was PLN 600 million this year. This has not disrupted our cash flow. We are more or less on the same level.
Now, debt, that's also an area that we look at regularly. The net debt to EBITDA ratio grew from 0.6-0.8, but I remember when it was over 3. As we know, our bank covenants have a limit level of 4, a cap, and we're far from reaching that. That is a very insignificant increase, but it has to do with balancing our cash flows and our cash net position. Our net indebtedness has grown from PLN 4 billion-PLN 4.8 billion, but I would say there are no dangerous areas in there. Our loan agreements have actually improved this year. We have increased liquidity with lower financing costs. For liquidity contracts, more and more banks are offering increased limits. We are seeing that the banks are seeing receiving our cash flow as very safe.
The terms for balancing our cash flow are increasingly good for us, and there's quite a lot of resources available, still untapped, and there to be touched upon, about PLN 8 billion that is safely available at hand in our rolling credit loan agreement. Thank you.
Mr. Zdzikot, a s we have mentioned, Mr. Zdzikot has this double role, so I will ask him also for a short comment on investment and the summary.
Ladies and gentlemen, let me start with a brief summary. I would like to highlight a very good net result. We are indeed happy about it. +11% year-on-year and +PLN 505 million on operating result. Net result, about PLN 5,200 million, which is a very good result. Operating result, PLN 6,945 million. I would like to highlight here that the positive contribution of KGHM Polska Miedź had a positive contribution to this.
As for C1 cost, I would say that this is only 13% growth, taking into account cost pressure which we are facing on a daily basis. We also see it as a stable development. We are satisfied with our production levels. We maintain stability also with the growth on, you know, the holding company, Polska Miedź, is positive. If I move on now to investments, you are well familiar with this slide, and the message is also positive. KGHM is a company that has been traditionally high on capital expenditures. Annually, we are above PLN 2 billion. After three quarters, we are at 64% of the budget, PLN 1.824 billion. That is good performance taking into account the specifics of the investment process.
Normally, the last quarter is the time when projects are finalized. The overall result is good, and we are on schedule with our key projects and investment programs. They are not at risk, nor is the fulfillment of our CapEx budget. As I said at the very beginning, we want to focus very much on investment and development. We prepared for that, and we implemented a very extensive program of increasing, improving our competences, our quality, and processes at KGHM. That is dedicated to over 500 employees of our company, and this program is underway right now. We focus on investment. We focus on further improvement of processes and of our staff in this area. That will be one of our key challenges in the upcoming future.
That is it on our part. Thank you very much, gentlemen, for your comments. Now we will move on to questions and answers. Questions are invited from the room. Janusz Krystosiak will chair this session.
Good afternoon, ladies and gentlemen. I have already some questions that were sent to our email address, and we are waiting for questions from those who are present at the Warsaw Exchange.
Mariusz Marszałkowski, Business Alert. I have two questions. The first is about investments that you have just mentioned, and there are two questions here. Will KGHM continue to invest in SMRs, those small modular reactors? That was one of key investment projects of the last month. The second part of the question, what about those wind farms on the Baltic Sea with the involvement of KGHM? The second question concerning Sierra Gorda. What is the situation of the company, and what are the prospects of this venture in the future, in the context of political situation, the nature of the Chilean government and the plans for taxes, nationalization and so on? Let me start.
Of course, this cost pressure that we have already mentioned repeatedly during our today's meeting, in my assessment, justifies very much involvement of KGHM in energy projects. This is evident. This is justified even taking into account the long-term nature of those projects. They will be completed well into the future, especially in the SMR project that you mentioned. It is not really an investment project. We are pursuing it together with our partner, and we will continue this project. We will watch closely the profitability of this project once the first stage is over. The involvement of KGHM in the atom project and those renewable energy sources, be those offshore projects or the ones related to photovoltaics, all that is justified.
The strategic goal that we identified in our strategy, adopted and published in January, saying that by 2030 we would like to have at least 50% energy from our own sources, still holds. During this meeting, we have already mentioned about the impact of costs of energy on our C1. Energy projects are and will continue to be important for us. As for the project related to nationalization of the mine in Chile, this proposal was not included in the final draft of the Constitution, and that draft constitution was rejected. As for taxes, we are secured with guarantees until 2029. Those initial proposals were subsequently mitigated significantly, and they are still under debate. Sierra Gorda participates in those negotiations. Thank you very much. We have another question in the room.
Robert Maj, IPOPEMA Securities. When we are talking about energy costs, at what price on average do you hedge your energy? At what price you secure your energy for 2023? We have a new Management Board, so could you gentlemen tell us what is your view of dividend payment in the future? What the market and the shareholders can expect regarding dividend in 2023? Answering your second question, we will not change anything in our dividend policy. We will not change it in any way. The rules are clear. We are prepared for that, but the decisions will be made at the right time. We do not have any changes in this regard. As for energy-related issues, we consider two things, electrical energy and gas.
Both elements are of importance to us. As regards electrical energy, the situation has not changed much since our last conversation two months ago. We have secured about 30% of volume of electrical energy for next year. The transactions, spot transactions for next year, are priced at unacceptably high levels, and we do not buy energy for next year at those exorbitant prices, nor do other energy-intensive companies. Our view is that next year, electrical energy will be cheaper than the prices offered right now. This is linked to the situation and developments in the balancing markets. Also, we will soon have canceling of this commodities market obligation. There is another factor.
It's hard to say the overall impact in the entire energy sector, but our expectation is that the overall effect should be positive, allowing us to have greater capacity for bilateral contracting of electrical energy. The change of the formula valid in the balancing market is still uncertain. Again, we think it will have a stabilizing effect.
It will also bring our costs next year closer to the spot levels which we have seen recently and which we are seeing right now. Because we can see a certain offset of supply and demand, and we try to ensure those offsets in the national market. We assume it will be positive to us. We do not really plan to take advantage of this offsetting market to a large extent, but as any entity operating in the market, we are involved in to some extent. Maybe this share of our use of the offsetting market will increase in the context of the expected prices increases next year.
We cannot answer you about the exact price at which we bought the 30% of energy for next year, but we think in real terms, they are lower than to the spot transactions available at the moment. The situation is quite similar in gas. We secured a smallish in gas, but those who follow the market know that there have been some decreases, and we benefited from those decreases by concluding some spot transactions for next year. By now, we have secured about 40% of our gas needs. We are working on a reduction of our gas consumption next year.
As a result, the currently estimated 40% may be in real terms worth 45% or even more % if the actual consumption of gas decreases. We feel that we're on the safe side in terms of gas costs. Both legislative changes are, in our view, positive for the market and positive for us as a large consumer of electrical energy, but also generally beneficial for all participants of the market.
Roman Płaziński, Cleaner Energy. If we are talking about energy from your own production accounts for 11% of your consumption, and that is far away from the 50% that you declared in your strategy 2023-2030. Does the Management Board plan to accelerate the path of reaching the target level set out in the strategy, and if so, in what way? Outside building your own photovoltaic farms, are you interested in buying such ready-made installations? Because in the report, it says that you are negotiating the purchase of wind farms.
Ladies and gentlemen, first of all, this was not a coincidence that we have had this goal. I've been with the company for a short time. It was adopted in January, but there is no coincidence that it's put there in 2030. In 2030, we assume that we'll be having at least 50% of our energy from our own production, but that doesn't have to be a linear increase. That's the only thing it means is that 50% of it will be owned in 2030. There will be different sources, nuclear, but also renewables. Now, regarding renewables, of course, we want to be active in all the areas. Offshore is important to us, and we have demonstrated our activity by submitting the right requests for permits. Photovoltaic also, not just our own construction, but potential acquisition is an option.
We're analyzing all the areas. Can I have a follow-up question? Let me just supplement what was said now. 11% comes from the fact that we switched off gas and steam units because gas was very expensive. Electricity was cheaper on the market, quite simply, colloquially speaking. Right now, when we're about PLN 500-PLN 600, we've switched them on again and we're producing power. Our capacity of generating electricity is the equivalent of about 20%-23% of our use, consumption. This has been historically the case. This is due to the very high prices of energy at the end of last year and in the first three quarters of this year. Currently, the auto generation is coming back to a much greater extent.
In November, you concluded the first cPPA contract for the purchase of energy from an external photovoltaic farm. Are you going to continue this practice in the months to come and periods to come, or is it just an experiment that you were just trying to look at it?
We're an experiment that we're intending to continue. That is contingent on many factors. You know what it's like on the market. We've got bidders who say, well, you have to buy it anyway because you need to meet your targets, your green targets, so we're offering you a price that's higher than the market price. Now, well, we will not use such bargains, shall we say, but I understand that the partner did not really put you up against the wall, shall we say, but offered reasonable prices, right? We will seek for partners that, you know, are prepared to have a long-term relationship and look further ahead and also appreciate a certain stability of the relationship that we offer and the security of contracting from KGHM.
I believe those are components that are not to be offered by all of the consumers and suppliers. This is the suppliers we want. Majority are not like this, but we are seeking, and the market knows about that. Slowly but surely, the offers that are unacceptable will be disappearing, and we are starting to get into talks with suppliers that think like we do. Projekt-Solartechnik , this is a contract you concluded. Are you intending to continue cooperating with this company? They have a portfolio of 2 GW. I'm afraid this is too much of a detail to be disclosed. Let me just look at our Investor Relations Manager. I understand that this is a company that fulfills the criteria you have listed of reasonable supplier, reasonable prices, et cetera.
I don't believe we should be rating these components and evaluating whether our business partner meets the requirements or not. Could you say a bit more about the wind project that you are looking at? What power are we looking at? Are those ready to be built or just on paper still? Whether there's an auction that has been awarded? Okay. Well, let me take this. I think at this stage, we should not really go deeper into it. Due to our negotiating position, we should not be disclosing these details. It's not the time yet. We would like to know still whether this is something that already stands or is it just on paper that, you know. What the power is of these farms? Let me go back. Our goal is not to have specific deals.
Our strategic goal, and therefore our goal for the years to come, is to increase own energy production. From our point of view and from the point of view of our strategy, it doesn't really matter whether we acquire that or whether we develop it at the right time. What matters is the profitability and the effectiveness of the process. Thank you very much. Do we have any further questions in the room? If not, at this stage, let me just take the first question online from our inbox.
To President Kensbok. Mr. Paweł Puchalski from Santander is asking whether the assumption of the increase in cost of the mother company in 2023 at just over a dozen % year-on-year, is it realistic, and what are the biggest cost challenges for the company for 2023? Well, let me just start answering this.
We are not doing forecasts. It's very difficult to give parameters on cost increase, especially that we are still developing the budgeting process. As far as challenges are concerned, when we look at the cost dynamic and the cost pressure, well, I would like to give the floor to Mr. Kensbok. All right. With reference to this question, I can say that, well, analysts know us very well. You're also quite aware of the situation and the inflation in this country. I think the secondary inflation is also something that is very well known. Certain growth expectations that have not yet materialized but are driving the inflation, especially in the area of costs and transaction deal prices, as well as the remuneration, wages, and labor costs.
This is an area that we are facing, I think successfully so far. It is due to our understanding of the actual inflation components, which is good. I believe that because of that, our negotiation positions are good enough to meet the official cap. Now, as regards to which areas we are talking about, to be honest, all of them. Energy has grown significantly this year. We are assuming that it will not be growing quite so much until next year, but it definitely will grow as far as our cost component. Now, for the salaries budget, it is regulated by collective agreements, and, well, there isn't that much room for flexibility.
We are looking at bringing full-time equivalents and staffing our plans, and we're looking at this in much detail with Mr. Świder. We're not going to challenge the provisions of the collective agreement or amend them in any way. Now, in other areas, steel, chemicals, third-party services, we know more or less the market prices of those. Some grow at a higher pace, some at a slower pace, but the increases are notable. As any business in Poland, we are subject to the pressure of inflation, and we are counteracting it just as decidedly as other business, perhaps even more so. A question from Paweł Puchalski about dividends, but we have already spoken about our approach to the potential dividend and the recommendation. We shall wait a slight moment before that happens.
Another question from Tomasz Jurczak. At what stage of advancement is the GG-1 shaft at the moment? Have there been any more projects for this deposit? The GG-1 shaft, we have reached the bottom, 1,351. Last year, we have had the handover of the elements, the components of the shaft. Reuters. What are the components of the investment tasks of the company for 2023? Acquisitions? Development of existing assets? We're currently constructing the budget for 2023. As I said before, twice, investments will account for an important part of it. You are quite aware of that because you've seen this in today's conference, but also during the conference for the previous quarters and years. There are three basic groups, and you cannot change that.
Maintenance, reproduction, and development. We are growing. We're continuing our discussions as to how these projects will prevail. One third is recovery. The outlays are quite significant. We invest quite a lot, and that's what I want our priority to be. Work on budget is ongoing, and the work needs to be consistent with the KGHM strategy. The most important endeavors are, for example, the program of excavating the deposits. That's a very important key program for us for our core business. This is what I want to focus on, and that is going to be one of our investment axes for the budget. Thank you.
A question from Thompson Reuters. It has partially been answered by the CEO, the strategy as a document and actions to be taken as review.
What can we expected from the strategy review against the macroeconomic and security aspect? What will be the conclusions, decisions, or amendments in those areas?
Before I give the floor to our CEO, let me just say that conclusions, decisions, and changes, well, it's too early to even talk about them because the Management Board is right now not announcing any changes or updates or a review. Let me just give the floor to our CEO.
Oh, you've actually answered the question, but let me just add, if we wanted to change the strategy, we would just announce it. We are talking about changing the Board, and you know quite well, we've spoken about this already today, that the Management Board is not complete yet. It will be complete, hopefully, and that is very important to me, as soon as possible.
We'll have new members joining, responsible for very important areas, development, foreign assets. Those will be vice presidents. If we reconstruct half of the board, we need to review our strategy, and we will be doing a review of our strategy, and that will respond to the question as to whether or not we need to change it, and if so, to what extent. We cannot answer that question today, and I cannot give you a response to that question. Once we have the full board, we will embark on this process, and once we complete it, we will inform you about the outcomes. Thank you very much. Another question that I think I also can try to answer. Thompson Reuters, when more or less can we expect the constitution of the full board?
Of course, these are decisions to be made by the Supervisory Board. For us, it's hard to comment on what the Supervisory Board will decide in the right mode after the contests and so on. I can see another question, Mr. Łukasz Rudnik.
Is the weak production at Robinson a one-off effect, or can we expect it to recur in the following quarters? I'm looking at Mr. Marek Świder. I've already mentioned that we are working on a block model of the deposit. Currently, we are planning work for next year. Once we have this plan, we will be able to answer this question because the model of the deposit will determine our plans for next year. Thank you very much.
Trying to group those questions into broader issues, I can see that we have already addressed most of those things, energy, strategy, costs.
Composition of the Management Board. There seem to be no further questions. Is there anything from the room?
Yes, there is a question. Monika Borkowska, Interia. I would like to ask about economic situation because next year is likely to be a major challenge. You have already signaled that November looks quite well even though the situation in China is not good at all. What is your view of the prospects for the upcoming quarters and months? Do we indeed have a difficult year ahead of us? That's a question that a lot of people are asking themselves, and our view is that there is a certain expectation related to greater activity in the economic situation in China.
This increased activity is not something that everybody expected would follow immediately the election of a new ruler of the party. There are signals of acceleration of credit action, significant acceleration of investments in infrastructure, mainly related to the green transformation in China. That also includes building energy infrastructure. This supported very much this demand for copper on the part of investment funds. On the other hand, we can see that the situation in the U.S. and in Europe is unstable, but it is not disastrous in any way. The announcements of growing interest rates seem to be disappearing. We can see renewed interest in buying foreign assets in international markets. We are getting mixed messages.
We are in talks with major funds and their view is similar to ours. Namely, next year is bound to be a difficult year, one that will require hard work and great focus on costs and on securing revenues, while the following years are assessed as good years when the good business cycle will allow us to get up on this curve. There is a demand for raw materials. There is certain need for economic development in a number of countries, and for sure this will support demand in the following years.
If we look closely at copper sector, we can see that the mining projects which started a few years ago when copper price began to increase will be implemented in the following years, while other mining projects are likely to be closed down in the following years. There's no pipeline of new mining projects. Our assessment is very much in line with what analysts say. The following five or six years are likely to be years of oversupply and insufficient demand, which should reverse the price trend. I know it is a lengthy answer, but this is how we roughly see it. Difficult in short term, very optimistic in the long term. Let me add to this.
We repeatedly use the word stability because it is the key determinant of our functioning stability, stable foundations of our business. Let's remember that we already had prices significantly below $5,000 per ton and significantly over $10,000 per ton. We feel the cost pressure, but we monitor the market closely. The growth of C1 cost by 13%, in my opinion, is lower than what could result from macroeconomic situation. We bet very much on stability. We focus on stability even though the costs pressure is strong. At present, our focus concentrates on preparing the budget for 2023. If I may ask a further question, Mariusz Marszałkowski, Business Alert.
That's about near future, next year. Next year, your contract for copper cathodes will come to an end. Are you in talks with the Chinese partner regarding extension of this agreement? If so, could you reveal any secrets of that? Any details of that? I'm not sure if we want to discuss the negotiations with our partners. We also look at this contract in terms of the worth of the agreement, its significance. We will inform you in the right way after we have signed any agreement with any specific contractor. We will not comment on this today. I do not see here any questions from areas we haven't addressed yet. Thank you very much. I think we will end our today's meeting at this point.
Thank you very much. Thank you for your questions. The transcript of the questions and answers will be available on our website, as well as a transcript of the presentation part of the conference. We will meet next quarter when we will present the results for the whole 2022. On a daily basis, we are at your disposal. Thank you very much.