Ladies and gentlemen, it is a great honor to welcome you to our Quarterly Results Conference of KGHM S.A. We'll talk about the results for the fourth quarter and for 2022. We have the Management Board, Tomasz Zdzikot, the President of the Management Board. Mateusz Wodejko, Vice President of the Management Board for Finance. Marek Świder, Vice President for Production. Mirosław Kidoń, Vice President for Foreign Assets. Marek Pietrzak, Vice President for Corporate Affairs. We also have here the Head of Investor Relations, Mr. Janusz Krystosiak. To begin with, let me give the floor to Tomasz Zdzikot, the President of the Management Board.
Thank you very much. Ladies and gentlemen, first of all, welcome to Lubin. It's not without a reason that we meet here. As you know, our company is a global player. We operate globally. We are a global leader in copper and silver production. We are susceptible to global factors that affect our performance. Here in Poland, we are very local with strong links with the local community. This is the beating heart of KGHM. Thank you for convening here. The results that we want to present today and that have been published, they are available on our website. The results are positive, are satisfactory. They are the effect of hard and responsible work of our staff. To begin with, I would like to thank every single one of them, both in Poland and in our international assets.
For obvious reasons, it would be difficult to invite you to a conference in Chile or in Nevada, but Lubin is good enough, I believe, and we will speak about the results of the Polish copper as well. Last year, performance has been quite pleasing. Also, I would like to mention two management boards of our company, and Mr. Marek Świder and Professor Marek Pietrzak are a continuity, and because they moved from the previous board to this one. Today, they will also talk about the parts of our operations they are in charge of. The result is good, especially when you consider at the big picture, the difficulties that persisted in 2022.
The aftermath of COVID-19, which keeps affecting global supply chains, and economic demand on such major markets as China. Obviously, the war was another factor that affected our operations. The war is right outside Polish border, and such circumstances always affect economies and companies of this size as KGHM. This is yet another reason why we are very proud of the performance we delivered last year. In 2022, our revenues were nearly PLN 34 billion, up by 14% over 2021. Most of the revenues came from the sales of copper, silver, and gold. There were a few other factors that contributed to the revenues, but quite importantly, we have a growth of nearly 14%. As we spoke previously, we go for strong development. We invest heavily.
We want to harness these difficult times to build robust foundation for the future. This is why we are proud to say that in 2022, we invested over PLN 4 billion across the capital group. In 2023, we want to keep investing, especially in our core business and in our program of ensuring access to deposits in G1 and GG2 shafts. These are very important investments for us. I already thanked our employees, our staff. We are doing all we can to secure safe working conditions. I'm sure President Świder and Kidoń will talk about this as well. Last year, we had the best performance ever in terms of accident rate. The figure on the slide is our historical low.
In 2022, we dramatically reduced the number of accidents at work. We are very happy about this. Because the safety of our people in this demanding work is of paramount importance. Now, macroeconomic factors that have affected our results. Well, I'm sure you're perfectly aware of it, but why not have a look one more time? The prices of our core products are volatile. Our core product, copper, is very important in energy transformation. The prospects are good. There will be no power transformation without copper, and we believe that this growing trend is quite stable. It may not be linear, but it will still be going up. There have been no major fluctuations in copper prices as shown on the slide.
You may recall that in 2020, copper prices plunged after the outbreak of the pandemic to a level of $4,500 per ton. In 2022, in the first quarter, the price went up to $11,000 per ton and then went down again. In average, the prices in 2022 were 6% lower than in 2021. The same goes for silver, which is our second most important commodity. Conversely, the exchange rate of the dollar were favorable for us. The dollar is getting stronger, and this has had a positive effect on our operating results. We are very happy of our EBIT. That's nearly PLN 9 billion. I already mentioned, and my colleagues will tell you more about this, but there are many more factors that affect our performance.
Things like energy prices. After the Russia's invasion on Ukraine, energy prices soared in 2022. This chart shows the changes in copper prices, both in dollars and in Polish zloty. This is a combination of factors, so copper prices and dollar exchange rate. This is the reason behind our ultimate performance. Our results, once again, is satisfactory. Now, our strategy. During our previous conferences, we told you that we are reviewing our strategy right now. We are proactive in this regard, the strategy that has been adopted and communicated to you is still valid. It's still in progress. This slide shows you a number of key factors in our strategy, our key milestones, so to speak, in 2022. These are our milestones on our road to 2030.
As you will notice, we have very good performance in terms of domestic copper production, which is very close to the levels we hope for in 2030. We also have more recycling of copper, and this is the direction we want to follow. We invest heavily, especially in our plant in Legnica. We will continue these efforts. In 2022, we demonstrated that we are quite successful in doing this. Our profitability of the working capital is going up. I mentioned low accidents rate. When I was introducing my colleagues from the board, I mentioned the companies within our capital group, they have been doing very well too. You can see that we have more contracts signed externally outside the capital group, and we are happy that our group companies can attract clients from outside the parent company.
Now, production, President Świder will give you the details, but in general, the production in the Polish copper went up and is stable with a growth trend. Payable copper, 733,000 tons. That looks promising. Also in international assets, as we communicated before, that depends on... Well, in Sierra Gorda, depends on the deposit we are working in right now. Currently, the core, the copper ore concentration is lower, and my colleague will surely give you more details about this. Last but not least, and before I give the floor over to my colleagues, the operating result, nearly PLN 9 billion, and net result, nearly PLN 4.8 billion.
This morning, I read some media commentary that nearly PLN 5 billion in the macroeconomic situation dictated by the pandemic and the Chinese COVID-19 policy, the war outside the Polish border. This is a promising result. It gives us a solid foundation for the future. We can build more value, we can do more investments, both in Poland and in our international assets. That's it by way of introduction. Let me give the floor to my colleagues.
Thank you very much. President Marek Świder, Vice President of the board for production. Good morning or good afternoon. As President Zdzikot said, employee safety is a strategic priority for the KGHM Group. You will notice on the slide that our accident rates are low. They went down by 10.3% last year.
That's LTIFR. 2022 was the safest year on record in KGHM. We do have an ISO certificate for health and safety. Once again, we received the so-called Golden Card for the leader of workplace safety. Payable copper in capital group, 733,000 tons that's split into two segments, Polish assets and international assets. I will concentrate on the Polish assets only. Production results of KGHM Poland. Ore extraction, 30.5 dry weight, with 1.45 copper grade in ore. Year-over-year, that's up by 1.7%. Production of copper in concentrate, 392,000 tons, and copper content in concentrate is 22.4. That's again up by 0.3% year-over-year.
Electrolytic copper in Polish assets, that's 586,000 tons. From own concentrate, we produced 382,000 tons, up by 1.4% year-on-year. Silver, 1,298 tons of silver, metallic silver that is. Year-on-year, we had a decline of 2.6%, but you will notice the fourth quarter of 2022. In the last three months of the previous year, we had some repair works in our precious metals plant. That's why our production was a bit smaller. All these results are way above the budget. Thank you very much. Now, Mateusz Wodejko, Vice President for Finance.
Good afternoon. Before I begin, before I give you the details, I would like to emphasize what the President said.
We are very happy with our 2022 performance, because when we look at the budget and we look at the long-term perspective, 2022 was one of the best years ever. Of course, in financial reports and in the presentation here, we make comparisons to 2021, which was a unique, exceptional year. 2022, if you look deeper into the details, you will notice that there are good reasons to be happy. I would like to focus on sales alone. When we look at the sales of KGHM parent company and the capital group, the sales were just a little bit lower than in 2021. If you look at the net results, the consolidated net end result on sales, it was PLN 4 billion, 300 million, versus PLN 4.7 billion in 2021.
It's roughly PLN 0.3 billion lower. The net profit, PLN 3.9 billion versus PLN 4.04 billion in 2021, and that's despite unfavorable macroeconomic setting. Let's move on to group sales revenue. Nearly 14% growth from contracts with clients. Change in sales volumes of basic products, +51%. Then we had this slight decrease in international assets, change in prices of basic product that went down, then exchange rate up, 4.390. Another positive trend was adjustment of revenues due to derivatives. In 2021, there was minus PLN 1.5 billion. Now it's minus PLN 182 million, and that was recognized in the first two quarters. The second part of the year was much better.
We have other factors, and it's mostly Polish, the parent company and Polish companies, we had more revenues from other products other than copper and gold and silver. The fourth quarter of 2022 was very positive, up compared to the third quarter, PLN 8.865 billion. That's positive. Now C1 unit cost for the capital group up by 12%, for KGHM up by 5%, international up by 7%. C1 growing up by 5% or 7%, that's not a lot when you look at macroeconomic factors that created great pressure on in our industry. The cost pressure was caused by energy prices, gas prices, and prices of derivative materials that we use in our industry.
The underlying reason were the prices of gas and energy. For the parent company, we are grateful to the Polish government for reducing the tax on mined products. For KGHM International, this growth is attributable to a lower output in the Robinson plant in Sierra Gorda. My colleague will comment on the environmental and technological situation in Sierra Gorda. We had some technological aspects that caused the growth of C1 unit cost. This slide is a comment on energy prices. If you look at the charts, you will notice that the second half of 2022 was a period of very high energy prices.
For instance, the growth of KGHM costs, the cost of sales, sold product and sold materials and overheads, it grew by 17.6% year-on-year, whereas the cost of energy and materials went up by nearly 33%. This includes third-party charge material. The main growth factor behind the prices was the prices of energy, which was over 45%. In such a setting, we had to carry on in 2022.
Now the operating results of our group and, of course, our Sierra Gorda joint venture. As for KGHM Polska Miedź, for accumulated EBITDA changes slow, down from PLN 5.704 billion to PLN 5.4 billion. A higher drop in KGHM International and Sierra Gorda, which were also impacted by higher prices of energy and materials, and also a lower recovery copper from ore. Now financial results. Well, we can see that there is an interesting trend here, which I mentioned when we talked about sales. Change in revenues from contracts with customers and core operations is similar, more or less.
The main factor which affected the drop in the net result was. Mainly, the difference at the level of our engagement in the joint venture, PLN 1.419 billion at consolidated level. In 2021, we reversed a provision for future one for PLN 1 billion, more than PLN 1 billion, and also reversal on the provision on amortized cost of lending, so more than this year. In 2022, the situation was similar to 2021 at operating level. Main factor impacting net result were the reversals of the write-downs from 2021 and cash flows. It's also quite optimistic here.
When you look at our operations, so what we have from our consolidated cash flow, so PLN 2 billion 643 million, plus the cost of mineral extraction task, almost PLN 3 billion, and the change in working capital, then you see the results showing our potential. When you take into account this, PLN 2 billion 464 million from operations, and the spending on acquisition of property, plant, and equipment, and intangible assets of PLN 4 billion 118 million is important with miners because it shows that we're spending more and more of these investments and we're thinking about the future. Repayment of loans with those granted to a joint venture.
Joint venture, PLN 7,989 million, proceeds from the disposal of property, plant, and equipment, that's the oxide of Sierra Gorda. Also disposals of subsidiaries, mainly Franke mine and Interferie companies. Dividends paid minus PLN 600, more loans that were taken on. Debt at consolidated level, cash decreased to PLN 1.2 billion, at the unconsolidated level to PLN 980 million. We should also see an increase in working capital in stock and increase in investments. We're not worried about the level of cash. We investing and we engaging more and more of our working capital. Now, the debt of KGHM.
The structure of our equity and liabilities on the balance sheet has been improving, so the total assets increased by 11% to more than PLN 500 billion. The increase was due to working capital, 18.5%, and the total of long-term liabilities and provisions increased by 2% only. It shows us that the group is more safe in structural terms, in terms of the structure of its balance sheet. If you look at that in zlotys and in dollars, the debt is increasing compared with 2022 EBITDA. Debt to EBITDA was between 0.6 and 0.8. What's also worth mentioning here is that in terms of plans for 2023, we're basically planning to invest more.
This debt to EBITDA ratio is to increase, but probably, but we believe it will remain safe. Record-breaking investment projects, they're planning for in CapEx in property, plant, and equipment, and in equity, property, plant and equipment, so more, PLN 3.2 billion and PLN 2 billion in other CapEx is going to be significant. I think that comparing with 2022, looking at the macroeconomic situation, the right response is to invest significantly, especially in development. Now emissions, and the share of renewables. In 2022 and in 2023, and in our plans for future years, we are going to invest in renewables.
We focus on renewables and low emissions in KGHM Polska Miedź and also in our energy company. We also in focus on that at Sierra Gorda, for example, where 100% of electricity is sourced from renewables. Talking about renewables, these are PV farms which we are developing, and we would like to step up our PV development. We're thinking about acquisitions there. What we also doing is working in the area offshore wind with Polenergia, with our partner, and we're thinking about SMR for low emissions or zero-emissions approach. We continuing our efforts. Now it's at an R&D stage prior to the investment stage. We already thinking about the future, where we can offer our offtake because we are the... With three...
More than 3 terawatt-hours, we are a major Poland's consumer of electricity or off-taker and an interesting partner to those companies that would be ready to supply these technologies to us. Thank you, Mr. President. Now we have a presentation about our foreign assets. Let me give the floor to Mirosław Kidoń, Vice President for Foreign Assets.
I'm wearing two hats today, so let me begin with my development presentation. Let me emphasize that 2022 was a very successful year. We achieved or even exceeded our investment level, PLN 2 billion 808 million, 77 million, compared with the budget of PLN 208 million, PLN 2 billion 835 million. Most of that is focused on mining and smelting our core businesses.
We focusing on our efforts to maintain and increase our production capacities, as well as improving safety. Because the money we spent is also aimed at increasing the safety, and we consult our departments and include health and safety aspects. This is why we have been so successful and have had such a good safety record at our company. What you asked previously was the outcome of what we were doing in terms of providing access to the ore. This slide shows Głogów Głęboki-Przemysłowy, and you see the 8% ore extraction dry weight increase. Amount of copper in ore is also up by 7% year-on-year, and silver at the bottom is up by 6%.
As for the breakdown of our capital expenditures, let me emphasize that we're focusing on our core business of our deposit access program, GG-1, GG-2, and Retków Shaft, where we're focusing strongly on smooth developments, so that we won't have any problems or any delay to be on time. Also the exchange of machinery that we will continue this year. All of these efforts will improve the availability and efficiency of our machines and the comfort and safety of our staff. Environmental investment projects. This is the breakdown of these projects. We are spending more than PLN 250 million on these projects, including water management and the protection of the air quality and waste management. Foreign assets. First, let me...
Please allow me to go back to the slide, the safety slide that Marek Świder has shown. We have all emphasized the role of safety. Your LTIFR was 0.35 for foreign assets. This is a world-class results. Anything below 0.5 is accepted by mining bodies, authorities. This is frequently a KPI of many businesses. We have been improving every year. We have achieved a lot. In 2022 for Sierra Gorda, it was 0.17. This year, after 3 months only, we going towards our zero harm goal to have no loss of time accidents. Lost time injuries. You see the average at Sierra Gorda. The result is better than in the North of America.
We also paying attention to that, and we will be moving and using these, you know, good practices, applying them also in other assets to roll them out across our business. We have two bars, 2021, 104.4 million payable copper, and 2022, 90.8 thousand. Very briefly, I comment on that. How we managed to achieve these results. I'm very proud of that, together with the board. 2021 was a record-breaking year for payable copper production in Sierra Gorda for two reasons. In 2021, we recorded the highest head grade for the whole decade, and an almost 30% increase in throughput and delivery of minerals from our open pit mine.
Looking back, in my memory, 2014, 2015 to 2017, our throughputs ranged from 80 to 100,000 daily. Sierra Gorda project assumptions theoretically allowed us to achieve 110,000. In 2021, we achieved 129,000 of throughput. We are the only mine in Chile to exceed its design parameters. It was something that our competitors noted, as well as the government of Chile, because the government is interested in providing access to deposits with lower head grade to attract possible investors.
We are an example of a company which knows how to use and successfully mine low head grade deposits, which is a very important development because we slowly running out of high head grade deposits globally. Most leaders in the mining industry will have to change their strategy, and we are one step ahead of our competitors with these results. Now briefly, how did we achieve 130,000? We started with the defragmentation at the mine. The explosives are cheaper compared with mechanical processing, and that's the best way to improve production results.
You need to strike a balance between mine stability and safety, and the strength, and the impact of the explosion, and the timings in between the explosions. Reducing that to seven inches, we increased an excellent improvement in efficiency from 110,000 tons to 160 on the crusher. Our, in our Sierra Gorda project, which we own, but the FLSmidth is the maker of the crusher machine. We also modernized these conical crushers and the hydraulic presses, highly efficient. We achieved 3,000 tons of hourly throughput, and we increased the pressure significantly up to 150 bar. These were some very significant achievements.
We changed the pumps, hydro cyclones, mills, and achieved the ultimate result of 130,000. If you were looking at those results without the optimization, they would be 30% lower. They would have been 30% lower. We have this reverse stream flowing
From the Sierra Gorda to KGHM. Without those achievements, it wouldn't have been possible, given the result, the head grades and the results in 2015, 2016. Given the parameters or the head grades in 2022 and 2023, we would not have been able to achieve that. We are now capable of operating and mining low head grade ores, and we achieved 3 times the Guinness record. We have an excavation machine operator or miner, mechanical miner operator who achieved 200,000 tons daily. It's almost what KGHM uses in all its shafts daily. I've never shared his name, but I want to conceal his name so that he would not be taken over by our competitors.
That mechanical miner operator is so skillful that he achieved 200,000 tons, you know, daily. We achieved all that with a high improved health and safety, which is well perceived by the government and the authorities there. We also extended the TSF, or we re-received a permit to do so. It's not easy to get such a permit from the authorities, but we work closely with the authorities and local communities and the government of Chile, we're successful in those terms. This reduced our LOM CapEx. Despite 2023 being the year with the lowest head grade for copper for the whole decade, we will make money operations-wise anyway and will remain a profitable mine.
KGHM International and our production results. Here we have a 22% decline in copper, and this is attributable to the lack of production in the Franke mine, which we sold, and we had lower output in Robinson, down by 7,000. We had 13% less recovery. Robinson is quite complicated, but we can see the potential and the challenge, and we believe that the same de-bottlenecking project that we had in Sierra Gorda will allow us to identify bottlenecks and find the right balance, the compromise of the potential, so more throughput with less CapEx and ultimately higher output. We need a project like that. In Robinson, I spoke to the board, and we will go in that direction. We want to stabilize the situation in the mine. Today in Robinson, weather is unfavorable.
As you heard during the Oscar ceremony, there was a lot of rain and up the over 2,000 meters above sea level rains are even harsher. Right now we are penetrating into an intermediate layer with high zinc content, which prevents us from ensuring high quality concentrate. We also have a lot of acid-soluble copper, which reduces the kinetic performance of our machinery because it increases viscosity, and as a result, those fines just will not go up to the surface. We have a team that will be working on it. We will determine our targets for this year and a timeline for the project that will allow us to reach those targets. Now let me go back to something I already discussed, the cash flows in 2022.
This wouldn't be possible without the upgrading and optimization projects in the previous year. A lot of people were involved both in Poland and in Chile. Our team there is just fantastic. I'm talking about our Chilean colleagues, our South American engineers. We have our own development department. We have our bottlenecking project. We have some Kaizen projects as well. We communicate our results to our staff. The working atmosphere is fantastic. People are motivated and involved. I do hope that all these positive trends will be extrapolated to North America and make some improvements. If I said that everything is great in Sierra Gorda, my boss would fire me because there wouldn't be anything for me to do. We're not perfect, but we're getting there.
We are very ambitious, much more ambitious than three years ago. Sierra Gorda has a lot of potential we want to take advantage of. I'm talking about further explorations, about using the concessions we have received. I'm talking about further increase of our throughput and further efforts towards optimization of our mining plans in Chile. Thank you very much. Thank you, Mr. President. Today, we are attended by the board, and one of the members is Mr. Marek Pietrzak, President for Corporate Affairs. He will be available for Q&A. Now, before we move on to the Q&A, Mr. President of the board will make some final remarks.
Thank you very much. I'll be very brief. We are talking about difficult times and good results. These results are good.
They are beyond promising in these harsh times. Our result is affected by many external factors beyond our control. Things like copper price changes, silver price changes, cost pressure, as discussed by President Wodejko in the context of energy prices. This is extremely important to us. We are the second largest off-taker of energy in Poland, and it's quite obvious that the cost pressure, both for KGHM directly and for our business partners. What this is, and this has a strong bearing on our performance. Mr. President rightly noted that our C1 unit cost is going up, but it's still well below inflation. We are at a time when inflation in the Eurozone is in the range of 10%, and in some central European countries such as Hungary, it's in the range of 25%.
External circumstances have a strong influence on what we do, and our results do not just happen. We have to achieve it, and we are very happy with what we achieved. Before we move on to your questions, I will answer questions we often hear about our energy projects. These projects are very important for us. We are a large consumer of electricity. That's why we believe it's only reasonable and only natural to have our own power generation capacity. Gas and steam units are not always as efficient because of changing gas prices. We are active in many different aspects of the power industry, so that's both PV projects, whether built by ourselves or acquired. We are also present in offshore wind projects. We have our nuclear project, it's the most interesting for the media.
We have an American partner who is moving down the certification pathway in the US, and we are a partner of that company. We're not talking about something that will be built next year. We are talking about something that is in an R&D stage. Ultimately, we want to secure our own energy resources with stable prices. The results we have just presented to you are optimistic. They are optimistic enough. You may wonder whether we've been contemplating some layoffs. No, we haven't. Our employment level, our headcount is stable. We believe it is a great asset of ours that our people, both here in Lubin and across our group, are strongly connected with us. Usually they work us for a lifetime. They are patriots of ours, and we respect that.
Our performance is actually the effect of their hard work. As the board, we are responsible for ensuring stable operations irrespectively of copper prices. Whether copper prices were below $5,000 or above $10,000, no matter what, no matter what energy prices would be, no matter what our costs would be, we are a stable operating company, and our operating results are very good. We had nearly PLN 5 billion of net profit, and that's a profit in a very difficult time. In this context, we are very happy of these results. Thank you very much, Mr. President, all Mr. Presidents. Now, the second part of the conference Q&A, questions from you, ladies and gentlemen, present locally here and from financial market analysts who are also here with us.
You can submit your questions to IR, investorrelations@kghm.com. This conference is streamed live online. We have 25 minutes for Q&A. We have over 15 media represented here. Thank you for coming. Even when we do conferences in Warsaw, the number is usually lower than 15. Now I'll give the floor to Janusz Krystosiak, we will start with questions submitted by analysts.
Thank you very much. I will take the liberty to take a look into our mailbox, investor relations mailbox. We have two questions there. The first one is about our investment in the power mix. Mr. President of the board actually answered that question before it was asked. He spoke about our investments in this regard.
If I could ask President Wodejko to give us a little bit more details. Then there is another part of the question, which that's in English, but let me translate that into Polish. Mining capital due to high cost, power, investments, should that capital be used for financing such project? Essentially, that's a question about the nuclear power plants. I guess the question is about what CapEx will be used for the nuclear projects.
Let me start by saying that we as KGHM, we are thinking broadly. We are thinking about low emission sources such as gas or nuclear and renewables. Ultimately, it's the megawatt-hour price and CapEx that is decisive. These are the key factors for our energy projects.
In PV projects, we are at a stage where we can take investment decisions, we can submit offers to farm developers. In nuclear projects, the timeline for contracting investments or contracting power that will be generated by third-party investors, well, that's a more distant future. When we consider nuclear energy sources, we just want to stay on board. We believe that SMR energy will be competitive in terms of prices and the kilowatt hours, kilowatt hour prices will be attractive enough, and that's key. But we can't tell you today that this will happen, that this will be economically reasonable. I think that nuclear power in Poland is essential.
Another question, the other question also related to the power industry. It came from Jason Fairclough from Bank of America.
What is your power contract book today? Did you sign any power supply agreements when the power prices were at the peak?
When it comes to contracting energy or gas, well, we have a certain mix. As KGHM, we are both the generator and the off-taker and the grid operator, we have a lot of room of maneuver in the power industry. We, well, we have a mix of contracts that hedge or secure our prices. We also do a lot of spot transactions or CFD contracts. We want to ensure a mix that best reflects the average market prices. Of course, if you have the average price, you may win or you may lose. From today's perspective, we can never guess what the prices will be in December, so we don't know if our strategy is optimized or not, but it's surely reasonable.
Thank you very much. In expectation of more questions that keep coming in by email, let me give the floor to the journalist here. Before you ask your questions, please introduce yourself and the medium you represent.
Jacek Saja, Radio Plus. A question as follows: With such an ambitious level of investments in 2023, will you share the profits with the shareholders? I'm not asking for specific recommendations. I'm asking about the dividend policy in general. The second question is about Sierra Gorda. If we may, let's first answer the first question, and then we'll move on to the second question.
Okay. Let me take that question. As you noted, we don't have a recommendation yet. From the perspective of the board, well, our decision will be a resultant of many factors. What is of key importance is our long-term strategy, and we talk about long-term investments, and we want to fuel those investments with cash. If you want to have a stable, sustainable company, you have to keep investing. On the other hand, we look at our investors and the expectations of the market, and our final recommendation after the analysis will be the result of these variables. The other question?
Right. Yes. The other question is about Sierra Gorda. With less copper, silver, and moly production and growing C1 costs, is this temporary? Is it that today the deposits are poorer, or is it going to be permanent? Thank you very much.
As I explained in my presentation before, in 2023, the head grade is the lowest, is the poorest head grade over the last decade, but we are ready for that in terms of our technology, and this is temporary. Open-pit mining, when we have block caving projects. Well, in such projects, the fluctuation in head grade are much higher than in deep mining, such as we do in Poland. Of course, these fluctuations are predictable. We know what we can expect. We do deep boreholes, we update our 5-year plans, and we try to be ready, to be prepared. Answering your question directly, the years to come will surely be better.
The head grade quality will improve. We can expect better production results and automatically better financial performance in Sierra Gorda. In combination with our improvement and optimization projects, we expect positive results in the next five years when it comes to our block model and forecasting of our resources and production plans. One more question, right?
Yes, one more question. In one of the slides in the presentation, you showed 100%, a planned 100% growth of scrap copper production by 2030. Will it require additional investments, or perhaps the current capacity of the refining furnace and the logistics is sufficient to increase your scrap copper production by 100%?
When it comes to this particular area, we are in a project stage. The project will involve reconstruction of our furnace in our Legnica smelting plant, but the decisions are still to come. Any other questions?
Joanna Dudzik from Logistyka.pl portal . As a main request , that's my question. Given the process you have with NuScale, will we learn it about the location this year?
Well, this is an important question. Thank you for that. Now,
The entity that is preparing the report is working on proposed optimal theoretical sites. Therefore, are the future SMR plant. We will certainly be provided with this report this year, but it's hard to tell whether the location, the site will be approved for us this year, because it depends on the large nuclear program and other things. This is about not duplicating our locations or overlapping with large nuclear projects. When we know when the final location of the site for large nuclear is selected, we will be able to accelerate our work on siting our SMR plant. The potential sites that would be interesting, these are already known. We know which sites are could be beneficial, but we would like to choose the optimal location.
We will try to speed up our work on selecting the location, but there are also other factors which come into play. We are part of an ecosystem of the future of nuclear energy in Poland.
Tomasz Zdzikot. We have different divisions and, just to add about the nuclear and scrap. Scrap processing project, especially for low-grade scrap, is considered to be highly promising and important for the both Legnica smelting plant and also our subsidiaries, including Metraco. It's a promising market offering an increase in production of our Legnica smelting plant. It will obviously require further investment, but it is a forward-looking project for both our company and this smelting plant, and also the whole company.
You can expect us to report on further milestones in the future, and we're ready to invest in that. As for SMRs, as Mr. Wodejko has mentioned, there are a number of nuclear projects ongoing in our country, because this is about our strategic energy security. This is not a race. We're not racing against other projects because we have the common goal of all parties involved to ensure energy security of Poland. In our case, this is crucial for KGHM, the company itself, and the energy security of KGHM is Poland's energy security, because if we are the second-largest consumer or offtake of electricity in Poland, if we are secure, energy-secured for us, it means that to a large extent, energy is secured for Poland.
There are large projects out there, including the Korean and the US project. I believe the Korean project has already chosen the location, but we are analyzing the situation. Of course, it's linked to the large ongoing projects and also the legal aspects, because we have a lot of re-regulations and laws about where we can build a nuclear plant and where we must not build it. There are a number of laws limiting the number of possible locations. We have to take that into account. We are part of that process. We have a partner helping us. So that is a professional partner. I believe we will be able to receive that report this year.
Okay, we can have two or three questions from the media, but let me first give the floor to Director Krystosiak. These will be investor relations mailbox questions.
Thank you. Question from Paweł Puchalski from Santander. I will answer one of them. What are the budget plans for the average annual prices of copper, silver, and dollar for 2023? Well, I can reply by saying that we are not revealing these data in accordance with our disclosure policy, and also our budgets show volumes for segments and the total unit cost for electrolytic copper production in Poland. What we're also showing is the planned CapEx. The price paths, or assumptions, or plans, concerning currencies and exchange rates, these are not published. We're not disclosing that.
Pavel is asking, "When will you revise the volumes for 2023 regarding KGHM International?" Another question from Pavel about the foreign assets, but the President has already replied. The question was about the operations and results of KGHM International and Sierra Gorda. If Mr. Kidoń would like to add anything, if and when could you revise international volumes plans?
The main project and most important mining plant in terms of that volume is our Robinson Mine. I've just come back from Nevada. Well, I came back from there last week, and I visited that mine, and had many working meetings to evaluate the plant. It was also because of the difficult weather conditions and geological situation, the block model.
The high soluble copper content and zinc content have a significant adverse impact on our throughput. But the weather itself, with the heavy snowfall and rainfall, statistics show them to be the highest over the last 130 years. These have significantly impacted our asset efficiency and availability of mining machines. We adopted a plan, right, to mitigate the effects of these weather conditions. We've initiated our measures, and we will be waiting for the results. It's too early today to tell you what it will yield, and too early to talk about revisions of our budgets.
I have a question from our mailbox, if I may. What measures are you undertaking to optimize your portfolio of assets?
I understand this is a question in the context of optimizing the group, the wider group, including also our servicing company, companies. This question goes to Marek Pietrzak. Optimization or streamlining of our assets portfolio is what we're doing every day as part of our supervision department, meeting with managements of those companies, boards, and also on our board in our day-to-day work. We're looking for possibilities to optimize the way in which our assets are used. We've had these large projects. Last year in quarter one of 2022, we sold the hotels to Polski Holding for PLN 200 billion. The money is there in the accounts, waiting to be used for investments in the second part of our business, which is health.
What we also did was to reorganize the structure of our funds. We moved assets from health resource to CUPRUM Zdrowie operating company. These were moved last year. That was about exiting from the funds structure in December last year, where we liquidated Season Seven, which was struck off the register. We worked with a third-party consulting company. With a transparent proposal we could select a company bidder who acquired a portfolio of these investment funds from us. We thinking about how to optimize and streamline operations and processes every day. From the energy perspective, if I may add, we also investing in our Energetyka company. We increased the share capital to re- change the sources in terms of the gas-fired plant in Legnica to reduce emissions.
This is about our responsibility also for lowering the emissions. Thank you. If I may, I'm just scanning my mailbox. Some of these questions are repetitions of what we've already said. The budget goals for 2023, and also questions about our prices and expectations of the commodity prices, currencies, the budget for 2023. It would really take too much time if I was to show you all the budget lines for 2023. We have that in our report and our budget, which is published, and you can find a list of our objectives in our budget with reference to the line's first time investor question.
The second question, the strategic direction of KGHM business model. Can KGHM become a more diversified mine as BHP or is KGHM looking towards carve-out?
That's a question about the strategic business model of the company. We working hard on a review of our strategy. This strategy involves the entire organizational structure of our company. I've had experience, some experience with such strategies and revisions in many companies. What it's generally said that a strategy should be formed as a grassroots effort, and the bottom to top approach. We engaging all the managers of our company to be involved in this review of our strategy to revise the strategy as necessary. This revision is very important to us.
As I told you many times, and I would like this to be so really, we would like to focus on our core business, which is not only mining, but also smelting, which includes the low-grade scrap and the project we have at the Legnica smelting plant. We are a production company. We also have goals which are about increasing the chain of our products. There are many things we can boast about in relation to energy, low losses, low emissions. It can be an interesting product on that market. Also focusing on our core business, KGHM is not and will not be an energy company. There are many questions. I think too many questions are asked about the energy projects. We do have and will have energy projects.
We're not withdrawing from any of them because we are a large consumer of energy. Our business ambitions lie in the field of mining and smelting. As I've read all the questions here on my part, and there will be a transcript after the conference with questions that were asked and also the answers that were provided by the board to questions about the budget. I will include the full text of the report together with the budget and the objectives for 2023 in accordance with our disclosure policy. I will have to remind you that you will not find any answers on our pricing plans. We're nearly there. We have to stick to our time limit because of the broadcast. This will be the last question officially.
When the official part is finished, board members will be available, so you can talk to them individually.
My name is Andrzej Andrzejewski from Polish Radio, Wrocław. In this room, when we heard from the previous board members about SMR projects for the first time, they said that in 2027 or 2028, electricity could be generated for the first time. When? I know it's not a race, but it's an important sector of Polish economy.
Yes, it's not a race. It's true. Because it has to be optimal. These plants have to provide optimal prices and be based on optimal technologies.
We are dependent on on the technological progress abroad that is in behind the Atlantic and also in the West when work is ongoing on SMR technologies, and it is being postponed because of the complex work that is involved there and certification that is necessary in the U.S., Canada, the U.K. or France. Also the dates for the commissioning of the first plant in the U.S. or Canada are delayed where there is the highest progress. I understand the question about the first SMR plant, when it's going to be commissioned in Poland. I think it should be in the first half of the third decade, and we hope that SMR technology is going to be developed. It is the future of energy in Poland.
If I may, with this role, because I also talk to you about our projects. I'm not sure if we declared 2027 so that we could really speak of any delay here. 2029, optimistic scenarios, maybe these dates maybe were mentioned somewhere. In the first report showed 2029 as the first model date. Just in addition to what Mr. President said. Thank you. Ladies and gentlemen, let me close the official part. The board of KGHM Polska Miedź will be available now for individual interviews. Also let me thank all the board members today. Thank you.