Integrated
Annual Report
2023
About this report
Integrated Annual Report 2023
On 7 March 2024, Polymetal International plc (“Polymetal”, the “Company” or the Group)
completed the disposal of its Russian business. The Company continues to operate with two
production facilities (Kyzyl, Varvara) and a major development project (Ertis POX) in Kazakhstan.
For that reason, the primary focus of this Integrated Annual Report is on these operations
located in Kazakhstan, with the results for the Russian business presented in aggregate.
This approach provides for the needs of Polymetal
International stakeholders, who (along with management)
have a greater vested interest in the operations and
prospective assets in Kazakhstan. This manner of
presentation in the Integrated Annual Report is for the
2023 results as the Company looks to the future and a new
era in its development.
Sustainability-related information in this Integrated Annual
Report is presented for the entire Group as it stood prior to
disposal of Russian assets in 2024, i.e. without clear
demarcation between assets in Russia and Kazakhstan
unless clearly stated. The separation of all sustainability
figures between assets in Kazakhstan and Russia is
presented in the Sustainability data annex.
Reporting scope and boundaries
This report covers Polymetal International plc’s policies,
business approach and strategic decisions. The scope
excludes JSC Polymetal and its subsidiaries since its
entire decision-making process came under the remit of
the management of JSC Polymetal. Polymetal International
plc had no involvement in such decision-making process,
including implementation of policies and procedures.
The governance and management of the Group was
restructured in 2023. In order to ring-fence the Group’s
Russian subsidiaries and ensure sanctions compliance,
the top management at Polymetal International
(the Company) resigned from all positions at
JSC Polymetal in June 2023.
The management of all Russian operations was therefore
delegated to the executives of JSC Polymetal, while the
Board and management of Polymetal International are
focused on the operations of those assets located in
Kazakhstan.
Based on circumstances existing as of 31 December 2023,
the Company has determined that JSC Polymetal and its
subsidiaries did not meet the definition of a disposal group
in accordance with IFRS 5 Non-current Assets Held for
Sale and Discontinued Operations. For 2023, the results
for JSC Polymetal continue to be recognised in the
financial statements of the Group.
To avoid confusion, the presentation of performance
across the Group’s operations, including all our
subsidiaries, associates and joint ventures, provides
detailed analysis of the Kazakhstan segment. Aligning with
the financial statements, aggregated results of the Russian
segment are shown separately. This covers the reporting
period from 1 January to 31 December 2023 and provides
comparative data for previous years. To read more about
our significant subsidiaries refer to page 143.
Reporting boundaries for environmental and social metrics
of assets in Kazakhstan are different and based on the
materiality of impacts made by respective entities. Detailed
information regarding boundaries is presented in
Sustainability data annex.
Reporting standards and external assurance
This report is prepared in accordance with the Astana
International Financial Centre (AIFC) regulations, in
particular with Corporate Governance Principles set out in
the AIFC Market Rules, as well as the recommendations of
the Financial Stability Board’s Task Force on Climate-
related Financial Disclosures (TCFD). We inform our
reporting process by using the International Integrated
Reporting Council’s (IIRC) International Integrated
Reporting Framework and are committed to
continuously improving the adoption of integrated thinking
and reporting.
We remain committed to the disclosure of transparent and
verifiable information. The financial statements were
prepared in compliance with the applicable laws and
International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board
(IASB), and were audited by AO Business Solutions and
Technologies. Ernst & Young Advisory LLP provided
limited assurance over sustainability-related information of
Polymetal International’s operations located in
Kazakhstan, prepared in accordance with the Global
Reporting Initiative (GRI) Sustainability Reporting
Standards, the Metals & Mining Sustainability Accounting
Standard published by the Sustainability Accounting
Standards Board (SASB).
Polymetal International plc is a leading precious
metals mining group and the second largest gold
producer in Kazakhstan. The Company is one of the
most sustainable and responsibility-driven in its sector.
Strategic report
About this report
02
04
At a glance
06 Where we operate
08
10
12
14
16
18
20
28
SID’s statement
Group CEO’s statement
Business model
Our strategy
Key performance indicators
Market review
Operating review
Financial review
Sustainability
39
40
42
46
50
56
62
64
How we manage sustainability
Material issues
Health and safety
Employees
Environment
Climate and energy
Communities
Ethical business
Risk management
68
Risk management
98
100
Governance
86
88
94
Board of Directors
Corporate governance
Audit and Risk
Committee report
Safety and Sustainability
Committee report
Nomination Committee
report
Remuneration Committee
report
Stakeholder engagement
Going concern
Directors’ responsibility
statement
116 Directors’ report
113
114
115
102
Financial statements
120
124
Independent auditor’s report
Consolidated financial
statements
Notes to the consolidated
financial statements
128
Appendices
168
Alternative performance
measures
Reserves and Resources
175
170
173 Group production statistics
Financial highlights
173
Non-financial information
174
statement
Independent practitioner’s
assurance report
Sustainability data
Tailings Storage Facilities
Disclosure
GRI and SASB content
indices
178
190
191
201 Glossary
204 Share information
205 Contacts
For more information,
visit our website:
polymetalinternational.com
02
03
03
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 At a glance
Focused on restoring
shareholder value
Polymetal International plc is the second largest gold producer
in Kazakhstan. Listed on Astana International Exchange (AIX) and
Moscow Exchange, Polymetal operates two producing assets while
developing the Ertis POX project and exploring further growth
opportunities.
Polymetal today
2nd
largest in Kazakhstan
for gold production
AIX
listed since 2019
MOEX
listed since 2013
>$1 bn
five-year capital
expenditure plan
Asset base (Kazakhstan)
Ore Reserves
Mineral Resources
11.6 Moz of GE
average grade 3.2 g/t
+3% year-on-year
4.0 Moz of GE
average grade 2.9 g/t
+25% year-on-year
Sustainability
(Kazakhstan)
Zero
fatalities
Zero
lost-time injuries recorded
in Kazakhstan
>90%
of water use on sites
is in a closed cycle
>20%
of electricity consumption
will come from our own
renewables by 2027
Sustainalytics
ESG Risk Rating: 22.6
(Medium Risk, TOP-12 in Precious
Metals industry)
Sustainalytics Low Carbon
Transition Rating
Climate strategy alignment: 1.9°C
(Medium Risk, TOP-5 in Gold industry)
ISS ESG
Corporate Rating: B-
(TOP-15 in Mining & Integrated
Production Industry)
CDP
Relevant Climate & Water disclosure
available on the platform
Key financial figures (Kazakhstan)
$893m
Revenue
$439m
Adjusted EBITDA
$903/GE oz
Total cash cost
0.39x
Net debt/Adjusted
EBITDA
30%
of total Group revenue
30%
of total Group Adjusted
EBITDA
What distinguishes Polymetal
1 Focus on
high-grade assets
` Read more on pages 6, 21-27, 170-172
2 Leading competence
in treatment of
refractory ores
` Read more on pages 9, 11, 13, 15, 26-27, 89
3 Strong capital discipline
` Read more on pages 15
4 Commitment
to sustainability
` Read more on pages 38-67
5 Investing in exploration
` Read more on pages 15, 21-25, 35
6 Operational excellence
` Read more on pages 11, 14, 20-25
Return on investment in the precious metals industry is driven by
grades and mining conditions. We achieve better returns and lower
risks from our project portfolio by setting appropriate thresholds on
head grades and, where possible, opting for open-pit mines.
Ertis POX facility will be Kazakhstan’s first large-scale and high-tech,
full-cycle POX plant for refractory ore processing. It will have a solid
foundation as a result of our expertise in building and operating
Amursk POX in Russia. As more and more gold resources globally
tend to be refractory, our technological expertise in environmentally
friendly refractory ore processing will be a key strategic advantage,
including being in the market buying third-party feedstock.
We engender a strong focus on capital discipline throughout the
business; maximising risk-adjusted return on capital is our priority in
all investment decisions. By prioritising high-return investments, we
have created a resilient business that generates significant capital
returns across cycles and acts as a platform for sustainable growth.
We ensure this through impact assessment and responsible capital
allocation, which means investing in green and more efficient
technologies, delivering tangible socioeconomic value to communities
and creating safe and inclusive workplaces.
Investment in both greenfield and near-mine exploration provides us
with a cost-effective increase in our reserve base and, along with
successful acquisitions, is the key source of our long-term growth.
We pride ourselves on our operational excellence and delivering on
our promises. Despite challenging trading conditions, we beat our
production guidance for the 12th consecutive year.
04
Polymetal International plc Integrated Annual Report & Accounts 2023
Polymetal International plc Integrated Annual Report & Accounts 2023
05
Where we operate
Focus on Kazakhstan
and Central Asian countries
Continued investment in projects, infrastructure and exploration
in Kazakhstan, including the construction of Kazakhstan’s first large-
scale, full-cycle, high-tech refractory ore processing hub, will be the key
to drive operating performance.
Varvara hub
Ertis POX
Kyzyl
Uzbekistan
Kyrgyzstan
China
Turkmenistan
Tajikistan
Varvara hub
Kyzyl
Reserves 2.1 GE Moz
2042 Life of mine
216 GHG emissions
Reserves 9.6 GE Moz
2054 Life of mine
244 GHG emissions
(Scope 1+2), kt CO2e
` Full asset review on page 25
(Scope 1+2), kt CO2e
` Full asset review on page 24
Ertis POX
250-300 Ktpa
Concentrate capacity
2028 Launch
` Full asset review on pages 26-27
Key:
Operating mine
Development projects
Headquarters
City/town
Projected grid
conneсtion
Grid access
Projected renewable
energy sources
Renewable
energy source
Find out more:
` GHG emissions reduction, read more on pages 56-61 and 185
` Green energy implementation, read more on pages 56-61
` Biodiversity and nature-related projects, read more
on pages 50-55 and 60-61
` Communities and social engagement, read more
on pages 49 and 62-63
Strategic changes
Polymetal post restructuring
Facilitating future actions to unlock shareholder value
On 7 March, Polymetal disposed of its
Russian assets. Post the disposal, the
Company is well-positioned to change the
strategy and continue creating shareholder
value due to:
• Fully de-risking ongoing operations and
restoring the Company’s access to
international financial markets
• Significant de-leveraging and increase in
liquidity to fund strategic transactions for
growth and, when appropriate, the
resumption of dividends
• Freeing the funds to pursue further growth
opportunities and unlocking the Western
counterparty engagements necessary to
procure for, engineer and finance the
construction of the Ertis POX project in
Kazakhstan
De-leveraging
• $2,383m Net debt
~$130m Net cash
De-risking
• No metals and mining operations
in Russia
• Head office in AIFC, Kazakhstan
• No UBOs in Russia, 75% free float –
mostly Western shareholders
Increase in liquidity
• Revenues generated from sales to
Kazakhstan and China
• Positive free cash flow
Following the disposal of its Russian assets, Polymetal no longer owns or controls these assets. These
now constitute a completely separate and independent business with its own shareholder, board and
management teams.
Tolling agreement with Amursk POX
Transition period until the launch
of Ertis POX
• Kyzyl concentrate will be toll-treated at
Amursk POX with the treatment charge
paid in local currencies
• Tolling agreement continues until 2031
to allow time for the Ertis POX facility
to become operational and fully replace
need for Amursk POX
Start-up of Ertis POX in H1 2028
• Total benefits of $300-350/oz
• +15-20 Koz of gold per annum
• Single technological hub with Kyzyl
Temporary transitional agreement with
Amursk POX, a subsidiary of JSC Polymetal,
pursuant to the tolling agreement. This
ongoing operational relationship will be
consistent with and in compliance with all
applicable local and international regulations
and sanctions laws.
Ertis POX would help to unlock the potential
for new assets with refractory reserves and
the provide security of in-house downstream
processing and independence of Kyzyl
refractory gold production from the Amursk
POX plant in Russia.
06
Polymetal International plc Integrated Annual Report & Accounts 2023
07
Polymetal International plc Integrated Annual Report & Accounts 2023 SID’s statement
Polymetal’s future
in Kazakhstan
and beyond
We are confident
that operating in
Kazakhstan's more
favourable macroeconomic
climate will restore the
value of Polymetal’s
shares."
Evgueni Konovalenko
Senior Independent
Director
It has been gratifying to see the Company’s financial and
operating performance stabilise during 2023 against the
continuing and tightening backdrop of continued Russia-
Ukraine conflict, new sanctions (including the designation of
the Russian business of the Company by the US in May
2023) and counter-sanctions. The Board believed that
under these circumstances fully divesting the Russian
assets and pursuing growth in Kazakhstan and other
Central Asian countries would greatly increase the
Company’s ability to generate value for shareholders. And,
already in 2024, the long-anticipated restructuring of the
business has been completed and we are looking positively
to the future.
Re-domiciliation to Kazakhstan
Given the rapid deterioration of the business environment
caused by the Russian invasion of Ukraine, the Board set
up a Special Committee, comprised of Independent
Non-Executive Directors, to review the options open to the
Company, which would enable it to preserve business
continuity and restore shareholder value. Its first
recommendation was that Polymetal International should
switch its domicile from Jersey to Kazakhstan. It had been
the first foreign company listed on the Astana Stock
Exchange (AIX) in 2019 and, following re-domiciliation in
August 2023, Polymetal has been able to switch its primary
listing from the London Stock Exchange (LSE) to AIX.
This decision was not taken lightly since, as a consequence,
its premium listing on the LSE was cancelled. However, this
was felt to be necessary in order to mitigate the impact of
Russian counter-sanctions being imposed against entities
incorporated in unfriendly jurisdictions (including Jersey), as
well the prospect of further reprisals. Both would place
significant restrictions on the Company and expose it to
unmanageable risk.
Choosing the Astana International Finance Centre (AIFC) as
the jurisdiction for our re-domiciliation was also prudent
given AIFC’s own adoption of English common law and
adherence to best practice. We too will continue to uphold
the standards that we have set ourselves over the last 25
years in corporate governance and health and safety, and
our approach to environmental matters.
Change of a major shareholder
I want to express my gratitude to all our shareholders and
investors for the continued support that they have shown us
over the years. We also welcome our new significant
shareholder Maaden International Investment, representing
the government of the Sultanate of Oman.
We are pleased that the shareholders have confirmed their
full support of Polymetal’s strategy and the actions
undertaken to secure the future of this business, as well our
intention to further develop the asset base in Kazakhstan
and the wider region.
Brighter future
Now that the Company has significantly de-risked its
operations and finances, and established stable operations
in Kazakhstan, the favourable macroeconomic conditions
will allow it to generate sufficient cash flows to fund growth
and repay debt. With divestment now complete, we also
expect better stock trading conditions for Western
shareholders as infrastructure providers gradually remove
the limitations previously placed on Polymetal’s shares. The
Board is also set on maintaining high standards of
corporate governance and ESG in the new environment,
which will ensure the creation of further sustainable value.
Evgueni Konovalenko
Senior Independent Director
The divestment of Russian assets
However, a further strategic pivot was required following the
US Department of State designation of JSC Polymetal and
its subsidiaries in Russia. The Special Committee was once
again deployed to develop an appropriate response in the
light of these new sanctions. In the first instance, the
Group’s Russian subsidiaries were ring-fenced, with
management of all Russian operations delegated to the
executives of JSC Polymetal, and management of Polymetal
International resigning from their positions in the Russian
entities. At the same time, all service agreements between
the Company and its non-Russian subsidiaries, and JSC
Polymetal and its subsidiaries, were terminated and all
payments from the Company and its non-designated
subsidiaries under other inter-Group agreements with JSC
Polymetal and its subsidiaries were discontinued.
The Special Committee, after a thorough review, also
recommended the divestment of the Group’s Russian
assets as the most viable option for mitigating the legal,
financial and operational risks that emerged as a result of
designation, as welll as the optimal path towards re-
establishing shareholder value. This would be the
Company’s way to restore access to international financial
markets, enable the resumption of dividend payments and
eliminate the discounts being applied by international capital
markets to businesses associated with Russia. With
divestment completed in March 2024, Polymetal’s Board
and management team is now able to concentrate on
expanding its asset base within Kazakhstan and also look
to other countries in Central Asia, which present a number
of interesting options for further growth.
Dividend decision
Both the re-domiciliation and divestment of the Russian
business, along with related de-leveraging, have improved
the balance sheet of the Company considerably. However, it
will need to invest in excess of $1 billion over the medium
term in projects in Kazakhstan, most notably the new Ertis
POX, and M&A activities in order to achieve its ambitious
long-term growth plans.
As yet, the Company has not restored its access to major
sources of debt funding and, in the light of this, the Board
considers that it would not be prudent to pay dividends for
the full year 2023. This will allow the Group to maintain both
strategic and operating flexibility. The Board will further
consider the dividend in first half of 2024.
08
09
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Group CEO’s statement
A new chapter
for Polymetal
Our successful
re-domiciliation in
Kazakhstan, primary listing
on AIX and divestment of
Russian assets mark the
beginning of a new chapter
in Polymetal’s corporate
story.”
Vitaly Nesis
Group CEO
We started 2023 facing many of the frustrations of the
previous year: namely, the ongoing Russia/Ukraine war with
the resulting upheavals of sanctions and counter-sanctions,
and disruptions in supply chains and financing options. With
this in mind, from the outset, we planned to pursue re-
domiciliation to a 'friendly' jurisdiction with a view to also
engineering a subsequent split of the business in order to
restore shareholder value. However, due to geopolitical
interventions beyond our control, this reorganisation did not
proceed as we originally planned.
Key corporate events in 2023
For a number of reasons, we quickly identified Astana
International Financial Centre (AIFC) as the optimal re-
domiciliation jurisdiction: because of its basis on English
common law, our long-standing presence and listing in
Kazakhstan, and its neutral position on western and
Russian counter-sanctions. For AIX to become our primary
exchange, however, we also had to accept the hard reality
that this would necessitate discontinuing our 12-year
premium listing on the London Stock Exchange. And, this in
turn, would entail management resolving a separate,
complicated set of infrastructural issues in order to enable
trading for all categories of shareholder post re-domiciliation.
As we progressed our plans for re-domiciliation to AIFC, the
Group was hit by the designation of its Russian business,
JSC Polymetal, by the US Department of State, which
made any plans to spin off the Russian operation totally
impracticable. As a consequence and in response to the US
designation, the Board formed a Special Committee to
develop appropriate measures with regard to sanctions
compliance and to oversee the divestment of the Russian
business – JSC Polymetal and its subsidiaries.
Since then, we have made substantial progress in redefining
Polymetal’s status for the long term. In August 2023, the
Company successfully completed re-domiciliation to AIFC
and resumed trading on AIX as a Kazakhstani issuer. This
also kicked off the process of searching for potential buyers
for the Russian business and culminated in the
announcement of its disposal at a total effective valuation of
$3.7 billion on 19 February 2024. The deal successfully
closed on 7 March 2024.
Seen from a purely financial perspective, due to the
inevitable Russian discount, the transaction has not
generated a great deal of value for Polymetal. Nevertheless,
in removing numerous operational, financial, legal and
sanctions risks, I truly believe that it is in the best interest of
all our shareholders since it enables the Company to open a
new chapter in its corporate history. Polymetal is now
well-positioned to implement a new strategy and restore its
track record of creating sustained shareholder value.
Production and performance
In 2023, the Company avoided major operational business
disruption and successfully met its original production
guidance. The Company’s gold equivalent production
demonstrated solid results, despite the difficult environment
experienced by the Russian part of the business and some
repercussions from the designation of JSC Polymetal for the
Company on the Kazakhstan side.
In spite of persistent geopolitical headwinds, Polymetal
retained its profitability and reduced its leverage. An
improvement in financial results was driven by robust
production and stable cost performance coupled with
favourable commodity price dynamics, with revenue
increasing by 8% year-on-year to $3 billion. We also
reported an impressive 43% increase in EBITDA at
$1.5 billion, thanks to both growth in ounces sold through
release of working capital and in the devaluation of the
local currency in Russia.
Total cash costs (TCC) were 8% lower and all-in sustaining
costs (AISC) were 5% lower than in 2022. Both were below
the announced guidance range of $950-1,000/GE oz and
$1,300-1,400/GE oz, respectively, attributing to the
substantial positive impact of Rouble devaluation on
local-currency costs. Net debt was largely stable year-on-
year at $2.38 billion ($0.17 billion in Kazakhstan and
$2.21 billion in Russia); however, it decreased in relative
terms in 2023 to 1.64x net debt/Adjusted EBITDA ratio from
2.35x in 2022.
Safety remains our top priority
We remain committed to ensuring a safe working
environment for all our employees and contractors.
Significantly, for the fourth consecutive year, there were no
fatal accidents during 2023 among Polymetal’s workforce
and nor, for the second year running, among our
contractors. I am also pleased to report that none of the ten
lost-time accidents (in Russia) resulted in permanent
disability or serious damage to health. Employees’ lost-time
injury frequency rate (LTIFR) decreased by 30% year-on-
year and is a testament to our investment in promoting a
zero-harm safety culture.
Our new POX development project in Kazakhstan
Our major development focus now is on Kazakhstan’s first
large-scale, full-cycle pressure oxidation (POX) plant for
refractory ore processing: the Ertis POX project. This will be
a new, state-of-the-art facility in the Pavlodar region and will
ensure that Kyzyl (and potentially other Kazakh assets) will
no longer have to rely on the temporary POX-processing
arrangement made with Amursk POX in Russia.
We have already identified the site and signed contracts for
this and the critical processing equipment. We plan to start
construction early next year with completion due by 2028.
We are partnering once again with international engineering
consultancy, Hatch, who are tasked with both basic and
detailed engineering for the project. We are also proceeding
with the permitting process. Capitalising on our experience
in developing POX sites in Russia, we believe that this
project will involve fewer construction risks. Compared with
the Russian Far East, the logistics in Kazakhstan are much
better as is the cost of materials and labour.
Our next steps
With the sale of Russian assets completed in Q1 2024, the
Company is now able to pursue its future growth plans
while, at the same time, ensuring the long-term free cash
flow potential of the existing assets in Kazakhstan. We
expect stable operational results in Kazakhstan in 2024
and, following a positive investment decision from the
Board, expected in H2 2024, will accelerate the
construction schedule for the Ertis POX.
Our priorities during the year will be centred on safety, cost
control and operational improvement. Alongside this, we
also plan to make tangible progress in terms of securing
new growth opportunities for the business. Together, these
will ensure that we deliver substantial financial returns for
our shareholders over the coming years.
We could not have achieved the continued operation of the
business over the last year without the loyal support of our
employees and I would like to formally thank them on behalf
of the whole senior management team. Their skills,
expertise and commitment are vital to Polymetal’s future.
Vitaly Nesis
Group Chief Executive Officer
10
11
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Business model
Defining our capabilities for the future
Our outputs (in Kazakhstan)
Our business model, based on key competencies and
driving sustainable value, has proved its resilience in difficult
times and as a basis for the future.
Our purpose
Deliver long-term value to all stakeholders through responsible and efficient mining
Factors influencing long-term performance
Market trends and
opportunities
` Read more on page 18
Our capitals
Risk management
and sustainability
` Read more on page 68
Governance
` Read more on page 85
Financial
We aim to improve both the Company's
liquidity and balance sheet.
` Read more on pages 15, 28
Human
Attracting and retaining high-potential
employees across Kazakhstan.
` Read more on pages 46-49
Natural
Portfolio of high-grade reserves; water,
energy and fuel to run our operations.
` Read more on pages 170, 181, 186
Intellectual
Investment in skills and expertise; use of
leading technologies in refractory gold
processing; selective mining; development
of know-how.
` Read more on pages 46-49, 86-87
Manufactured
Robust performance of our operating mines
by driving continued operating improvement;
a strong growth pipeline; continuous
extension of life-of-mine by investing in
near-mine exploration.
` Read more on pages 20-27
Social and relationship
Constructive relationships with local
government and communities; transparent
and productive dialogue with stakeholders.
` Read more on pages 62-67
Our values
Putting safety at the
heart of our business
Leading through sustainability
and innovation
Delivering
on our promises
Excelling through
teamwork and trust
486 Кoz
GE production
28% of Group GE production
` Read more on pages 20-21
11.6 Moz of GE
Ore Reserves
41% of Group Reserves
` Read more on pages 22-23
Ertis POX
Kazakhstan’s first large-scale and
high-tech, full-cycle POX plant for
refractory ore processing
` Read more on pages 26-27
3,202
average number
of employees
22% of Group headcount
` Read more on pages 46-49
0.39x
Net debt/Adjusted EBITDA
1.64x Group leverage ratio
` Read more on pages 29, 37
$7.3m
Community investment
41% of Group community
investments
` Read more on pages 62-63
Tr ansport
Process
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` Read more on
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12
13
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Our strategy
Reshaping our strategy
Polymetal aims to achieve superior shareholder returns while maintaining high
standards of corporate governance and citizenship. To achieve this aim,
we will pursue the following strategy:
Focus on Kazakhstan and
selected Central Asian countries
• maintaining stable production and cash flow at existing
operations in Kazakhstan
• safeguarding employment
• contributing to tax revenue
• social development and contribution to local communities
Risks
• Production risk
• Supply chain risk
• Political risk
• Taxation risk
KPIs
• Revenue
• Gold equivalent production
Focus in 2024
• De-risking the legal, financial and operational aspects of the business
post divestment of Russian operations
Best practice in corporate
governance and sustainable
development
• full compliance with applicable sanctions laws, including the
mitigation of secondary sanctions risks
Risks
• Health and safety risk
• Environmental risk
• Human capital risk
• Legal and compliance risk
KPIs
• GHG intensity
• Fresh water withdrawal
intensity
• Lost time injury frequency
rate (LTIFR)
• Share of female
employees
Focus in 2024
• Development of renewable energy projects at Varvara and Kyzyl to
accelerate our decarbonisation and contribute to energy stability in
the region
Our
strategy
Strong cash flow generation and
a strong balance sheet
• pursue growth opportunities
• resume the payment of dividends
Risks
• Market risk
• Currency risk
• Liquidity risk
KPIs
• Free cash flow
• Total cash costs
• All-in sustaining cash
costs
Focus in 2024
•
Increase in liquidity to fund strategic initiatives for growth and
ultimately, when appropriate, the resumption of dividends
• Positive free cash flow generation
Growth in chosen jurisdictions
• invest in excess of $1 billion in projects, infrastructure, and
exploration in Kazakhstan over the next five years, including,
most notably, the Ertis POX facility
• invest in near-mine exploration to expand the reserve base:
in particular, Kyzyl, Varvara, North Balkhash, Komar flanks, Baksy
• invest in stand-alone exploration in Kazakhstan and
Central Asia to establish the feasibility of the construction of
new stand-alone mines
• pursue selected acquisition opportunities
Risks
• Construction and development risk
• Supply chain risk
• Exploration risk
KPIs
• Ore Reserves
• Adjusted EBITDA
• Capital expenditure
Focus in 2024
•
• Continue exploration efforts to unlock resource potential of
Investment decision for Ertis POX
Kazakhstan and selected Central Asian countries
14
15
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Key performance indicators
In this Integrated Annual Report, the primary focus is on Polymetal’s operations located in Kazakhstan, which represent the future
direction of the business. For this reason, the KPI results in the charts below highlight the results of our Kazakhstan assets only.
The Group performance in 2023 is presented separately below the charts.
Financial
Revenue
($m)
Total cash costs¹
($/GE oz)
All-in sustaining cash costs¹
($/GE oz)
984
933
893
903
728
643
1,263
1,067²
817
Sustainability
GHG intensity (Scope 1+2)
(kgCO₂e/GE oz)
765
771
Freshwater use for processing
intensity³
(m³/Kt of processed ore)
947
194
188
178
Operating
Gold equivalent production⁴
(Koz)
558
541
486
2021
Total Group
2,890
2022
2,801
2023
3,025
2021
Total Group
730
2022
942
2023
861
2021
Total Group
1,030
2022
1,344
2023
1,276
2021
Total Group
677
2022
629
2023
634
2021
Total Group
155
2022
138
2023
125
2021
Total Group
1,677
2022
1,720
2023
1,714
Top-line indicator, heavily dependent on
commodity prices but also driven by the
delivery of production volumes.
High-grade, full capacity utilisation and
continued operational improvement, as well
as foreign exchange rates and oil price are
the key drivers behind total cash costs (TCC)
per ounce.
All-in sustaining cash costs (AISC) are based
on total cash costs and provides investors
with better visibility into the true cost of
production.
In line with the goals of the Paris Agreement,
we seek to decarbonise our operations by
switching to low-carbon electricity supplies
and mining fleet, generating more solar
energy and improving energy efficiency. We
aim to reduce our GHG intensity by 30% by
2030 and develop long-term goals further.
Our approach is to minimise fresh water
withdrawal by recycling water at our plants
and capturing mine water and storm run-off
for further reuse. Alongside monitoring water
use volumes, we take full responsibility for
the efficient treatment of water that we
discharge to local water bodies.
Annual target for gold equivalent (GE)
production is an indicator to the market of
our confidence in delivering stable and
reliable growth.
Relevance to strategy
Relevance to strategy
Relevance to strategy
Relevance to strategy
Relevance to strategy
Relevance to strategy
Focus on Kazakhstan and selected
Central Asian countries
Strong cash flow generation
and a strong balance sheet
Strong cash flow generation
and a strong balance sheet
Best practice in corporate governance
and sustainable development
Best practice in corporate governance
and sustainable development
Focus on Kazakhstan and selected
Central Asian countries
KPI linked to executive remuneration
KPI linked to executive remuneration
KPI linked to executive remuneration
KPI linked to executive remuneration
KPI linked to executive remuneration
Capital expenditure
($m)
Adjusted EBITDA¹
($m)
Net debt
($m)
Lost time injury frequency rate
(LTIFR)
Share of female employees
(%)
Ore reserves
(Moz)
145
601
1,348
0.04
19
20
20
12.1
11.3
11.6
102
86
516²
439
2021
Total Group
759
2022
794
2023
679
2021
Total Group
1,464
2022
1,017
2023
1,458
2021
Total Group
1,647
277
2022
2,393
174
2023
2,383
Our rigorous approach to all investment
decisions ensures tight controls on capital
expenditure, boosting the return on capital
invested for shareholders and the
sustainable development of the business.
Adjusted EBITDA provides an indicator of
our ability to generate operating cash flows
from the current business.
Net debt is a liquidity metric that determines
how much debt a company has on its
balance sheet relative to cash in hand.
2021
Total Group
0.12
0
2022
0.10
0
2023
0.07
An improvement in the health and safety
record at our operations, with a goal of zero
fatalities, is a key priority. There were no fatal
accidents in 2023.
2021
Total Group
21
2022
21
2023
21
2021
Total Group
29.9
2022
27.3
2023
28.0
We value a diversity of views and
backgrounds among our employees, aiming
to attract more women to careers in the
male-dominated mining industry. Our
diversity action plan sets gender diversity
targets for our existing development
programmes and introduces new initiatives
to inspire women into leadership roles.
Extending life-of-mine through near-mine
exploration and new discoveries from
greenfield exploration both contribute to the
Company’s long-term growth prospects.
Relevance to strategy
Relevance to strategy
Relevance to strategy
Relevance to strategy
Relevance to strategy
Relevance to strategy
Growth in chosen jurisdictions
Growth in chosen jurisdictions
Strong cash flow generation
and a strong balance sheet
Best practice in corporate governance
and sustainable development
Best practice in corporate governance
and sustainable development
Growth in chosen jurisdictions
KPI linked to executive remuneration
1 Defined in the Alternative performance measures section on pages 168-169. Reconciliation to IFRS measures on pages 33-34.
2 Allocation factors for corporate costs were revised in 2023 and previous periods were restated accordingly.
3 Excluding water for non-technological purposes.
4 Based on 80:1 Au/Ag conversion ratio and excluding base metals. Comparative data for previous years restated accordingly (120:1 Au/Ag conversion ratio was used previously).
16
17
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Market review
Successfully responding to global tensions
In 2023, the international market’s take on the confluence of continuing global geopolitical
tensions, slowing growth pace of the Chinese economy and recessionary fears were
reflected in the gold price reaching a new, all-time high.
Commodity price momentum
and demand
Despite another year of high interest rates and bond yields,
markets were again perturbed by looming recessionary fears and
ongoing global geopolitical conflicts, which made investors lean
towards safe-haven assets such as gold. In first half of 2023, along
with peaking interest rates, the gold price reached its lowest point
at $1,811/oz before beating the 2022 all-time high and reaching
$2,078/oz during the second half of the year on the back of
elevated geopolitical and security risks, along with indications of
rate cuts in 2024. The average LBMA gold price in 2023 was
$1,943/oz, an increase of 8% compared with the previous year.
In 2023, gold demand remained strong at 4,448 tonnes, only 5%
below the very exceptional 2022, when the world saw post
pandemic re-opening and escalating military conflict between
Russia and Ukraine. The momentum for gold accumulation, as
seen in recent years, continued into 2023 – over 1,037 tonnes were
added to central banking reserves, with China purchasing the
most, while Kazakhstan was one the biggest sellers in efforts to
support the local Tenge.
Despite an elevated gold price, jewellery demand proved strong
and remained on a par with 2022 at 2,093 tonnes. The removal of
COVID restrictions in China – the world’s largest jewellery
consumer – paved the way for a substantial hike in the demand for
jewellery in 2023. China’s annual jewellery consumption increased
by 10% year-on-year to 630 tonnes, which was partially offset by
India’s price sensitivity and as a result lower-carat gold jewellery
purchases.
The third consecutive annual gold ETF outflow, along with the
weakening demand for bars and coins, pulled overall investment
demand down to 945 tonnes – a 15% year-on-year drop (2022:
1,113 tonnes). In 2023, soaring global inflation, record-high bond
yields and waves of liquidity issues within the banking sector
attracted investors to a strong US dollar and risk-free government
bonds away from the gold investments.
COVID-relief payments from governments to re-energise business
did not spare the technology market. Notwithstanding advances in
artificial intelligence, major chip manufacturers experienced a
downturn, which was in turn reflected in gold demand. Tech
demand for gold dropped by 4% year-on-year to 298 tonnes,
sinking below the 300 tonnes mark for the first time.
Having started the year by largely tracking gold dynamics, the
silver price reached an annual low of $20.1/oz in March. It did not
then, however, see the same dramatic upturn as gold with
investors more inclined to stick to the more reliable safehaven
offered by gold. And, although silver briefly rallied to $26/oz in April
on the back of geopolitical and economic uncertainties, it failed to
maintain the momentum and averaged $23.3/oz for the year, up
7% (2022: $21.8/oz).
Supply chain disruptions
During 2023, the US, the EU and Japan continued to apply
sanctions against Russia and prohibited industrial goods and
technologies exports.
Implications for Polymetal and responses
The lack of access to consumables, spare parts and equipment
imposed a risk to the Company’s operations and development
projects. Procurement continued to adapt to the current
environment by replacing sanctioned equipment, consumables
and spare parts with alternatives from Russia, China and other
countries.
Sanction risks
In 2023, Russia and Russian companies, banks and individuals
continued to be exposed to international sanctions, which affected
ongoing business, investment projects, international trade and
financing. Russia in turn introduced counter-sanctions, which
among others included restricted capital movements and
corporate actions for residents of ‘unfriendly’ jurisdictions.
Implications for Polymetal and responses
The Group strictly adheres to all relevant laws and has
implemented comprehensive measures to ensure compliance
with all international sanctions and counter-sanctions. In 2023,
the Company completed re-domiciliation from Jersey to Astana
International Financial Centre (AIFC) in Kazakhstan to avoid
further unfavourable treatment in Russia and ensure that the
Company is able to execute corporate actions aimed at
restoration of shareholder value.
Unfortunately, on 19 May 2023, the US Department of State
designated Polymetal’s Russian subsidiary. The Board of
Directors of the Company set up a Special Committee of
Independent Non-Executive Directors to develop an
appropriate response and ensure that this external challenge
was addressed in the best interests of the Company, its
shareholders and other stakeholders. In February 2024, the
Group entered into contracts for the divestment of its Russian
business through a sale of 100% JSC Polymetal’s shares to a
third party, JSC Mangazeya Plus. On 16 February 2024, US
Department of the Treasury’s Office of Foreign Asset Control
(OFAC) confirmed to the Company that it would not impose
sanctions on non-US persons, including Polymetal International
plc, for participating in or facilitating such a transaction. On
7 March 2024 the transaction was approved by the
Shareholders General Meeting and, following receipt of required
regulatory approvals, was completed on the same day.
Worldwide inflation
Throughout 2023, the global economy continued to face the
consequences of soaring inflation. Moreover, demand-pull factors,
supply chain disruptions, ongoing geopolitical tensions and
sanctions against Russian commodities all contributed in elevating
consumer prices. Estimated 2023 global inflation reached 6.8%
(Russia – 7.4%, Kazakhstan – 9.8%, US – 3.4%).
Economy and local currencies
The Russian Rouble demonstrated significant devaluation relative
to 2022. Continuous geopolitical escalation, capital outflows and a
$169.4 billion decrease in exports, as a result of deteriorating oil
prices, pulled the Rouble rate to a staggering 101 RUB/$ in August
2023. Towards the year end, the Rouble improved on the back of
an emergency 8.5 cumulative percentage points rate hike (to 16%)
by the Central Bank of Russia and the introduction of capital
control measures. The average annual Rouble rate was 85.3
RUB/$ (2022: 68.6 RUB/$).
Although consistent geopolitical tension within the CIS region,
strengthening of the US Dollar and the weakening average oil price
of $82 per barrel (2022: $101 per barrel) posed significant
pressure, the Kazakhstan Tenge remained steady at 456 KZT/$
(2022: 461 KZT/$), on the back of increased oil exports along with
the significant realisation of foreign currency and gold reserves by
the National Bank of Kazakhstan.
Implications for Polymetal and responses
The Group’s revenue and over 72% of borrowings are denoted
in US Dollars and China's Renminbi, while the majority of the
Group’s operational costs are denoted in Russian Rouble and
Kazakh Tenge. As a result, changes in exchange rates affected
the Company’s financial results and performance.
Revenue for 2023 grew by 8% to $3.0 billion ($0.9 billion in
Kazakhstan and $2.1 billion in Russia) due to higher gold and
silver prices. Although domestic inflation imposed significant
pressure on costs, the devaluation of the Rouble in the second
half of 2023 allowed the Company to meet its cost guidance.
Gold and silver price
($/oz)
Gold
Silver
Gold
2,100
2,050
2,000
1,950
1,900
1,850
1,800
1,750
1,700
1,650
1,600
Jan 23
Mar 23 May 23
Jul 23
Sep 23
Nov 23
Dec 23
Source: World Gold Council, LBMA
Currency and oil price
RUB/$
$/barrel
KZT/$
RUB/$, Brent crude oil, $
105
100
95
90
85
80
75
70
65
60
55
Silver
29
28
27
26
25
24
23
22
21
20
19
KZT/$
100
95
90
85
80
75
70
65
60
55
Jan 23
Mar 23 May 23
Jul 23
Sep 23
Nov 23
Dec 23
Source: Yahoo Finance, Central Bank of Russia, National Bank of the Republic of Kazakhstan
Gold demand
(tonnes)
4,699
4,700
4,600
4,500
4,400
4,300
4,200
4,100
4,000
-11
-27
-33
-45
4,448
-135
Technology Jewellery
Gold
demand
2022
Total bar
and coin
Central
banks &
other inst.
ETFs and
similar
products
Gold
demand
2023
18
19
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Operating review
Maintaining a strong operating performance
In 2023, the Company managed to avoid business disruption, successfully met the
original production guidance and maintained a solid safety track record.
Robust production
In 2023, operations continued undisrupted despite the
difficulties caused by the imposition of US sanctions against
JSC Polymetal and its subsidiaries.
The Company’s gold equivalent (GE) production for the year
was stable at 1,714 Koz, comprising 486 Koz in Kazakhstan
and 1,228 Koz in Russia, and in line with the original
production guidance of 1.7 Moz. Kazakhstan’s
GE production declined by 10%, mostly driven by a planned
grade decline and lower share of high-grade, third-party
feed at the flotation circuit at Varvara. Russian GE
production grew by 4% to 1,228 Koz, in line with the original
production plan.
Gold production for the full year was up 3% to 1,492 Koz,
while silver output decreased by 15% to 17.7 Moz. Gold
sales of 1,400 Koz increased marginally year-on-year, while
silver sales decreased by 10% to 16.6 Moz. The gap
between production and sales is considered a temporary
one: significant tightening of concentrate export regulations
in Russia led to material accumulation in seaports for
concentrates in transit. Management is working to resolve
this issue in 2024.
No fatal accidents occurred among the Group’s employees
and contractors in 2023 nor were any lost time injuries
recorded in Kazakhstan. The lost-time injury frequency rate
(LTIFR) among the Company’s workforce decreased by
30% year-on-year to 0.07. Two serious and eight minor
lost-time accidents were recorded in 2023, all in Russia.
Days lost due to work-related injuries (DIS) increased by
32% year-on-year to 1,156 and again only relates to Russia.
Wherever possible, Polymetal applies digital technologies to
improve the safety of workplaces.
To read more about precautionary and safety procedures at
all production sites and offices, please refer to page 42.
Kyzyl continues as the largest individual contributor to the
Group’s overall output: full-year gold production came in at
316 Koz. Varvara GE output decreased by 20% to 169 Koz,
driven by a decrease in Komar ore grade at the leaching
circuit and a lower share of high-grade, third-party feed at
the flotation circuit. In total, operations in Kazakhstan
delivered 486 GE Koz, which accounts for 28% of the
Group’s production.
The Company has successfully secured a land plot for the
Ertis POX project in the Special Economic Zone near
Pavlodar. Evaluation of the site conditions and logistics
planning have begun in preparation for delivery of the
autoclave. Additionally, the Company has once again
selected Hatch for basic and detailed engineering, as well
as procurement support. Hatch has an exceptional track
record of working with Polymetal on several other projects.
Base engineering is already in progress, enabling
accelerated commencement of construction. The
investment decision is expected to be made by the Board in
the second half of 2024, with the start-up in 2028.
2nd
largest gold producer
in Kazakhstan
>3,200
average number of employees
in Kazakhstan
2023
2022
Change
Key operating highlights
PRODUCTION (Koz of GE)¹
Kazakhstan
Kyzyl
Varvara
Russia
Safety
LTIFR² (Employees)
Kazakhstan
Russia
DIS³
Kazakhstan
Russia
Fatalities
Employees
Contractors
1,714
486
316
169
1,228
0.07
0
0.09
1,156
0
1,156
0
0
1,720
541
330
211
1,178
0.10
0
0.12
877
0
877
0
0
Average headcount
Kazakhstan
Russia
14,647
3,202
11,445⁴
14,694
3,219
11,475
Our exploration
sites
Operating mine
Development projects
Exploration areas
Competence centre
City/town
-0%
-10%
-4%
-20%
+4%
-30%
n/a
-25%
+32%
n/a
+32%
n/a
n/a
-0.3%
-0.5%
-0.3%
Baksy
Komar flanks
Tavrichenskaya
Bakyrchick flanks
Tarbagatay
Kalba
Varvara hub
Ertis POX
Kyzyl
Kyzyl
Uzbekistan
Uzbekistan
Kyrgyzstan
Kyrgyzstan
China
Turkmenistan
Turkmenistan
North Balkhash
Tajikistan
Tajikistan
1 Based on 80:1 gold/silver conversion ratio and excluding base metals. Discrepancies in calculations are due to rounding. Mayskoye production reporting approach
was amended to record production as soon as the ownership title for gold was transferred to a buyer at the mine site’s concentrate storage facility. Previous
periods were restated accordingly.
2 LTIFR – lost time injury frequency rate per 200,000 hours worked. This only includes Company employees.
3 DIS – days lost due to work-related injuries. Company employees only are taken into account.
4 The average number of employees was revised compared with the actual (number reported in January 2024) to include average headcount of all assets in Russia,
which were deconsolidated during the reporting year and not part of Group as at 31 December 2023, for the period that they were part of the Group.
20
21
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Operating review continued
Exploration areas and volumes
(mine site exploration excluded)¹
Drilling, km
Kazakhstan²
Russia²
Total
2023
59.4
167.2
226.6
2022
91.1
223.1
314.2
In 2023, exploration activities in Kazakhstan were carried
out at 11 licensed and contract areas. In total, 59.4 km of
drilling was completed, a 12% decrease year-on-year.
Reserves and resources
In 2023, Group Ore Reserves increased by 2% year-on-year
to 28.0 Moz of gold equivalent (GE), while the average grade
in Ore Reserves decreased by 5% year-on-year and stood at
3.5 g/t of GE.
Ore Reserves in Kazakhstan increased by 3% year-on-year
to 11.6 Moz of GE on the back of the revised estimate for
underground mining at Kyzyl and positive exploration results
(an increase of 249 Koz). The average grade in Ore Reserves
in Kazakhstan was 3.2 g/t of GE – a 2% decrease year-on-
year driven by a 4% grade decline at Varvara, which was
partially offset by positive grade revaluation at Kyzyl.
Share of Ore Reserves for open-pit mining in Kazakhstan
decreased by 4% compared with the previous year and
stood at 45% on the back of underground reserves extension
at Kyzyl.
Group’s Mineral Resources (additional to Ore Reserves) grew
by 3% year-on-year to 26.7 Moz of GE. The average GE
grade in Mineral Resources was down 7% year-on-year to
4.2 g/t. Mineral Resources in Kazakhstan increased by 26%,
while the average GE grade increased by 8% to 2.9 g/t,
mainly driven by the Mineral Resources grade appreciation at
Kyzyl by 13%, from 4.1 to 4.6 g/t of GE.
Ore Reserves and Mineral Resources summary3,4
1 January
2024
1 January
2023
Change
Ore Reserves (Proved +
Probable), gold equivalent
Moz
Gold, Moz
Silver, Moz
Average reserve grade, g/t
GE
Mineral Resources
(Measured + Indicated +
Inferred), gold equivalent
Moz
Gold, Moz
Silver, Moz
28.0
25.4
210.0
27.3
24.7
211.3
+2%
+3%
-1%
3.5
3.6
-5%
26.7
24.1
209.2
25.8
23.1
212.9
+3%
+4%
-2%
Average resource grade, g/t
GE
4.2
4.5
-8%
Ore Reserves reconciliation
Kazakhstan
Russia
Total
Ore Reserves, 1 January 2023
Depletion
Revaluation
Change in ownership
Initial Ore Reserve estimate
Ore Reserves, 1 January 2024
11.3
-0.5
+0.9
–
–
11.6
16.0
-1.6
+1.7
-0.2
+0.5
16.4
27.3
-2.1
+2.5
-0.2
+0.5
28.0
1 Discrepancies in calculations are due to rounding.
2
3 Ore Reserves and Mineral Resources from continuing operations. Base metal are not included in GE calculation as they are insignificant. Ore Reserves of rare
Including joint ventures with more than 50% share owned by Polymetal.
earths metals are given separately and not included in GE calculation.
4 Mineral Resources are additional to Ore Reserves. Mineral Resources of platinum group metals and rare earth metals are given separately and are not included in
the calculation of GE. Discrepancies in calculations are due to rounding.
Ore Reserves and Mineral Resources
as at 1 January 2024⁴
Tonnage
Mt
Grade
GE, g/t
Content
GE, Moz
Ore Reserves
Proved (Kazakhstan)
Proved (Russia)
Probable (Kazakhstan)
Probable (Russia)
Proved+Probable (Kazakhstan)
Proved+Probable (Russia)
Proved+Probable
Mineral Resources
Measured (Kazakhstan)
Measured (Russia)
Indicated (Kazakhstan)
Indicated (Russia)
Measured+Indicated (Kazakhstan)
Measured+Indicated (Russia)
Measured+Indicated
Inferred (Kazakhstan)
Inferred (Russia)
Measured+Indicated+Inferred
(Kazakhstan)
Measured+Indicated+Inferred
(Russia)
Measured+Indicated+Inferred
28.9
45.5
82.4
95.4
111.3
140.9
252.2
6.5
22.7
17.8
41.9
24.4
64.6
88.9
19.3
89.9
1.7
3.2
3.8
3.8
3.2
3.6
3.5
0.9
4.0
2.5
4.0
2.1
4.0
3.5
3.9
5.0
1.6
4.7
10.0
11.6
11.6
16.3
28.0
0.2
2.9
1.4
5.4
1.6
8.3
9.9
2.4
14.3
43.7
2.9
4.0
154.4
198.1
4.6
4.2
22.6
26.7
2024 outlook for Kazakhstan business
Safety remains a top priority for Polymetal. We will continue
to focus on further improvements in health and safety metrics
and maintaining zero fatalities across our operations and
among on-site contractors conducting business on behalf of
the Group.
In 2024, we expect stable operational results in Kazakhstan
as well as a positive investment decision on the Ertis POX.
The Company expects its Kazakhstan assets to deliver
sustained production at 475 Koz of GE.
We will continue running a number of development projects
at existing operations, aimed at either extending the life-of-
mine or reducing costs despite the planned depletion of
higher-grade ore sources. At Kyzyl, the Company intends to
push the throughput further to the 2.6 Mtpa level by the
second half of 2024. We are in the process of reducing our
reliance on diesel power, and with it our environmental
impact, through renewable energy projects. This includes
upgrading dump trucks from diesel fuel to gas at Kyzyl and,
at Varvara, progressing the 23 MW solar power plant and
40 MW gas power plant.
At the same time, we will focus on advancing our long-term
project pipeline. At Ertis POX, we plan to undertake
engineering work, order technological equipment and
prepare the construction site. The investment decision is
expected to be made by the Board in the second half of
2024, with the start-up in 2028.
22
23
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 to Amursk POX
1
2
Semey
Operating review continued
Operating assets
Kyzyl
Our major contributor
to cash flow and
production
316 Koz
payable production (-4%)
$332m
adjusted EBITDA (-8%)
$704/GE oz
total cash costs (+17%)
Feed sources
1 Bakyrchik
Processing
Kyzyl (flotation)
Sales/Downstream
Concentrate to
Amursk POX¹/
Ertis POX after its
commissioning
Doré bars
to Kazakhstani state
refinery
Concentrate
to third parties
Key exploration projects in 2023
2 Bakyrchik flanks
Town
Railway
18%
Share in Group’s production
Location:
Abai Region,
Kazakhstan
Employees: 1,547
Mining: Open-pit
(until 2032) followed
by underground
Processing:
2.4 Mtpa flotation +
Amursk POX until
2028, then Ertis POX/
concentrate offtake
Production start date:
2018
Life of mine: 2054
Operating assets
Varvara
No accidents or injuries
since 2017
169 GE Koz
payable production (-20%)
$137m
adjusted EBITDA (-22%)
$1,189/GE oz
total cash costs (+29%)
10%
Share in Group’s production
Feed sources
1 Komar
2 Varvara
Thrid-parties ore
Processing
Varvara (leaching for gold ore,
flotation for copper ore)
Sales/Downstream
Doré bars
Concentrate to thrid parties
Key exploration projects in 2023
3 Komar flanks
4 Baksy
5 Tavrichenskaya
Town
Road
Employees: 1,410
Mining: Open-pit
Location:
Kostanay Region,
Kazakhstan
Managing director:
Abdurakhman Isaev
Kostanay
4
2
5
1
3
Processing:
3.2 Mtpa leaching
for gold ore, 1.0 Mtpa
flotation for copper ore
Production start date:
2007 (operated by
Polymetal since 2009)
Life of mine: 2042
Operational highlights
Innovation and efficiency
Operational highlights
Safety
LTIFR
Mining
Waste mined, Mt
Ore mined, Kt
Gold grade, g/t
Processing
Ore processed, Kt
Gold grade, g/t
Gold recovery
Production
Gold, Koz
2023
2022
Change
• Debottlenecking at the concentrator and increased
throughput
0.00
0.00
NA
• ‘Brigade’ camera monitor system for all-round visibility
• Improvement of automated dispatch system.
81.3
2,427
5.0
2,443
5.0
88.2%
83.2
2,223
5.5
2,200
5.5
88.9%
-2%
+9%
-9%
+11%
-8%
-1%
Exploration and resources
• In 2023, exploration drilling was carried out at East
Bakyrchik to confirm the prospects for expanding the
open-pit and increasing the mineral resource base for
open-pit mining. 251 Koz were converted into the
Indicated category. Deeper levels of ore body 1 were
traced, increasing the Inferred resources by 1,041 Koz.
41.8 km of core drilling was completed.
316
330
-4%
Operating results 2023
For the fifth consecutive year, Kyzyl made the largest
contribution to the Group’s robust operating performance.
In 2023, Kyzyl produced 316 Koz of gold (down 4% year-on
year). Planned decline in gold grade versus the high base of
2022 was partially compensated by the concentrator
capacity extension (2.4 Mtpa) as well as larger volumes of
processed concentrate. The mining and processing
volumes grew steadily throughout the year to align with
increased concentrator capacity.
In 2024, the Company intends to push the throughput
further to 2.6 Mtpa.
1 Kyzyl retains ownership of the gold throughout its processing by the Amursk
POX plant and sells the gold doré bars to, and receives payment from,
a Kazakhstan state-owned refinery without involvement of the Amursk POX
plant, compliant with the sanctions. The purchaser of the Russian business
has guaranteed the continued service under the tolling agreement.
24
Green highlights
• Grand Prix award at the prestigious nationwide contest
‘Paryz’ for the outstanding corporate social responsibility
projects in the Abai region, Kazakhstan
• 17 MW solar power station under development (16% of
electricity consumed will be provided by solar generation)
• Six electric excavators in operation
• Purchased more than 10% of electricity from renewable
energy sources
• More than 90% of water use on site is in a closed cycle
or treated waste water.
Priorities for 2024
• Further increase in throughput to 2.6 Mtpa
• Further expansion of tailings storage facility
• Technological improvements in order to increase
recovery
• Cost-saving upgrade of dump trucks from diesel fuel to
gas.
Safety
LTIFR
Mining
Waste mined, Mt
Ore mined, Kt
Gold grade, g/t
Processing
Leaching
Ore processed, Kt
Gold grade, g/t
Gold recovery
Flotation
Ore processed, Kt
Gold grade, g/t
Gold recovery
Production
Gold, Koz
2023
2022
Change
0.00
0.00
NA
40.7
2,834
1.4
43,3
3,857
1.6
3,136
1.4
88.8%
762
2.3
87.0%
3,199
1.6
90.0%
752
2.7
85.9%
-6%
-27%
-12%
-2%
-14%
-1%
+0%
-15%
+2%
169
211
-20%
Operating results 2023
Varvara recorded the planned 20% year-on-year decline in
production to 169 Koz.
Gold production at the leaching circuit decreased by 24% to
129 Koz due to lower grade in the Komar ore. The decrease
in the gold grade from 1.6 g/t to 1.4 g/t was driven by the
completion of mining at the deep levels of the northern and
central parts of the open-pit mine with high grade.
At the flotation circuit, production decreased by 3% to
40 Koz year-on-year due to a lower share of high-grade,
third-party feed.
Innovation and efficiency
• Dust extraction equipment vastly improved working
conditions at the processing plant
• In-vehicle driver behaviour analysis cameras based on
artificial intelligence to enhance safety
• Modernisation of equipment in the smelting department,
installation of a new induction furnace.
Exploration
• In 2023, 1.8 km of confirmatory, exploration drilling at
Tavrichenskaya and Shekara areas was completed. 4.2
km of reverse circulation drilling was completed during
the deep geochemical exploration at the Altyn–Dala area
• In 2024, the Company plans to verify geophysical and
geochemical anomalies within the Tavrichenskaya area
and continue infill drilling at Elevator with the aim of
conversion from the Inferred category into Indicated.
Green highlights
• Three electric excavators in operation at Komar mine
• Pilot afforestation project with planned area of 1500 ha
under development
• Up to 90% of water use on site is in a closed cycle or
treated waste water
• Engineering works for the 23 MW solar power plant (25%
of the site’s electricity consumption will be powered by
solar generation) and 40 MW gas power plant.
Priorities for 2024
• Stable throughput and production
• Commissioning the second stage of tailings dam #2,
a year ahead of schedule
• Advancing the 23 MW solar power station project.
25
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Fully independent mining operations
in Kazakhstan
1
Development of Kazakhstan's first large-scale,
high-tech, full-cyclee pressure oxidation plant
for refractory ore processing based on
Polymetal assets in the country
Unlocking Kazakhstan's huge resource
potential by developing new, refractory ore
deposits for which there is currently insufficient
processing capacity
Creation of economic benefits from processing
in-house versus off-take
Pressure oxidation is one of the most
sustainable and safe technologies in the
hydrometallurgical industry
Creation of ~500 permanent jobs, including
employment of highly qualified personnel with
a priority of employing local people
Conceptual project timeline
H2 2022
Q2 2023
H2 2024
Q2 2025
Q4 2025
H1 2025
H2 2025
H1 2026
H2 2027
H1 2028
Relocation to Kazakhstan and project site
selection
Flowsheet approved
Investment decision
Completion of basic engineering
Hydrometallurgical complex and tailings
projects state expert review
Completion of civil construction works/POX
buildings winterisation
Autoclave delivery to site
Completion of detailed engineering
Mechanical completion and start of
commissioning
End of commissioning and production
start-up
Operating review continued
Development assets
Ertis POX
Kazakhstan’s first
large-scale, full-cycle,
pressure oxidation (POX)
plant for refractory ore
processing
Feed sources
1 Kyzyl
Third-party
concentrates
Processing
Ertis POX (POX+cyanidation)
Sales/Downstream
Doré bars
Pavlodar
250-300 Ktpa
annual concentrate processing
capacity
~500 Koz
expected annual gold
production
~ $800 million
start-up capital expenditure
1
Town
Road
Railway
Location:
Pavlodar Region,
Kazakhstan
Processing:
High-temperature
POX, intensive
cyanidation
Capacity:
~ 250-300 Ktpa
of gold concentrate
Production start date:
2028
Life of mine:
over 30 years
Development
The Company is now evaluating the construction of a new
POX facility in Kazakhstan, located in a developed industrial
region with good infrastructure and aimed at processing its
own high- and low-carbon concentrate from Kyzyl as well
as third-party gold concentrates.
Green highlights
• Pressure oxidation is one of the most sustainable and
safe technologies in the hydrometallurgical industry
• Over 1,000 jobs will be created during the construction
phase, plus over 500 permanent jobs
• Minimal CO₂ emissions and absence of sulphur oxide
In 2023, the Company successfully secured a land plot for
the Ertis project in the Special Economic Zone near
Pavlodar, signed the agreement and obtained resident
status. Base engineering and equipment marketing is
already in progress, enabling accelerated commencement
of construction. The Company has signed an agreement
with an engineering contractor, who has an exceptional
track record of working with Polymetal on several other
projects for basic and detailed engineering.
The flowsheet is identical to Amursk POX-2 with minor
changes incorporated, which are based on the results of
detailed engineering. Subject to Board approval, the
investment decision is expected in H2 2024 and the
potential start-up in the second half of 2028. The Ertis POX
will facilitate full operational independence for the
Kazakhstani operations with no further requirement for
Russian or Chinese offtake.
and arsenic oxide emissions
• Closed water cycle with efficient waste water treatment.
Single technological hub with Kyzyl
• Due to the lack of processing capacity in the country,
refractory concentrates are currently exported to Russia
and China for processing
• Creating a full-cycle hydrometallurgical hub will solve this
issue and contribute to achieving Kazakhstan
government's goals for national development
• The proposal for building the hub is based on Kyzyl’s
estimated gold equivalent reserves, Kazakhstan’s
second largest and Polymetal International plc’s largest
operation in Kazakhstan.
26
27
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Financial review
Financial performance impacted
by inflationary and logistical pressures
• Capital expenditure was $679 million⁴, down 14%
compared with $794 million in 2022 and 3% below the
lower end of the guidance range of $700-750 million, as
a result of the substantial positive impact of Russian
Rouble devaluation on local-currency costs.
• Net operating cash inflow was $575 million (2022: $206
million). The Group reported negative free cash flow¹ of
$128 million in 2023, which is still a significant
improvement over the 2022 negative free cash flow of
$445 million.
• Net debt¹ was largely stable at $2,383 million
($174 million in Kazakhstan and $2,209 million in Russia),
compared with $2,393 million as at 31 December 2022
($277 million in Kazakhstan and $2,117 million in Russia).
This represents 1.64x of Adjusted EBITDA and is
significantly below the 2022 leverage ratio of 2.35x.
• On 19 February 2024, the Group announced its intention
to sell 100% of JSC Polymetal and its subsidiaries to
JSC Mangazeya Plus for an effective total consideration
of approximately $3.69 billion, valuing JSC Polymetal and
its subsidiaries at 5.3x EV/EBITDA based on Adjusted
EBITDA of JSC Polymetal and its subsidiaries for the 12
months ended 30 June 2023 ($694 million) and at 3.6x
based on a full-year 2023 Adjusted EBITDA of JSC
Polymetal and its subsidiaries (approximately $1.0 billion).
On 7 March 2024 the transaction was approved by the
Shareholders General Meeting and, following receipt of
required regulatory approvals, was completed on the
same day.
• Following the disposal, the Group’s net cash position of
approx. $130 million.
• No dividend will be proposed for the full-year 2023.
Following the recent completion of the divestment of the
Russian business, the Board will actively reconsider the
dividend policy and intend to share an update in first half
of 2024.
Financial highlights
• In 2023, revenue increased by 8% year-on-year, totalling
$3,025 million (2022: $2,801 million), of which $893
million (30%) was generated from operations in
Kazakhstan and $2,132 million (70%) from operations in
the Russian Federation. Average realised gold price
increased by 9% while silver price increased by 4%, both
closely tracking market dynamics. Gold equivalent (GE)
production was stable at 1,714 Koz year-on-year. Gold
sales increased by 2% year-on-year to 1,400 Koz, while
silver sales decreased by 10% to 16.6 Moz. Significant
tightening of concentrate export regulations in Russia led
to material accumulation of concentrates in sea ports.
• Group Total Cash Costs (TCC)¹ for 2023 were $861/GE
oz, down 9% year-on-year, and 9% below the lower end
of the Group’s guidance of $950-1,000/GE oz. This was
predominantly on the back of a weaker Rouble which
outweighed inflationary pressures. In Kazakhstan, TCC
were $903/GE oz, up by 24% year-on-year, on the back
of a planned grade decline combined with a 14%
decrease in sales volumes and inflationary headwinds.
Across the Group’s Russian mines, TCC were at
$845/GE oz, down by 19% year-on year, mainly on the
back of Rouble depreciation.
• All-in Sustaining Cash Costs (AISC)¹ amounted to
$1,276/GE oz, down 5% year-on-year, 2% below the
lower end of the Group’s guidance of $1,300-1,400/GE
and driven by the same factors. In Kazakhstan, AISC
increased by 18% to $1,263/oz, mostly driven by a
decrease in sales volume. In Russia, AISC decreased by
13% to $1,281/oz, on the back of a sales increase
coupled with lower stripping volumes after completion of
large stripping campaigns in 2023.
• Adjusted EBITDA¹ was $1,458 million, 43% higher than in
2022, on the back of higher commodity prices and lower
cash costs. Of this, $439 million (30%) was earned from
operations in Kazakhstan and $1,019 million (70%)
earned from operations in the Russian Federation. The
Adjusted EBITDA margin increased by 12 percentage
points to 48% (2022: 36%).
• Underlying net earnings² increased by 40%, totalling
$615 million (2022: $440 million), with a basic EPS of
$1.11 per share. Reflecting the increase in operating
profit, the Group recorded a net profit³ of $528 million in
2023, compared with a net loss of $288 million due to
one-off impairment charges in 2022.
Key figures5
Revenue, $m
Kazakhstan
Russia
Total
Total cash cost⁶, $/GE oz
Kazakhstan
Russia
Total
All-in sustaining cash cost⁶, $/GE oz
Kazakhstan
Russia
Total
Adjusted EBITDA⁶, $m
Kazakhstan
Russia
Total
Average realised gold price⁷, $/oz
Average realised silver price⁷, $/oz
Net earnings/(loss), $m
Underlying net earnings⁶, $m
Return on assets (underlying)⁶, %
Return on equity (underlying)⁶, %
Basic earnings/(loss) per share, $
Underlying EPS⁶, $
Net debt⁶, $m
Kazakhstan
Russia
Total
Net debt/Adjusted EBITDA
Kazakhstan
Russia
Total
Capital expenditure, $m
Kazakhstan
Russia
Total
Net operating cash flow, $m
Free cash flow⁶, $m
Free cash flow post-M&A⁶, $m
2023
2022
Change
893
2,132
3,025
903
845
861
1,263
1,281
1,276
439
1,019
1,458
1,929
22.8
528
615
17%
15%
1.11
1.30
174
2,209
2,383
0.39
2.17
1.64
145
534
679
575
(128)
(131)
933
1,868
2,801
728
1,046
942
1,067⁸
1,480⁸
1,344
516⁸
501⁸
1,017
1,764
21.9
(288)
440
9%
11%
(0.61)
0.93
277
2,117
2,393
0.54
4.23
2.35
101
693
794
206
(445)
(473)
-4%
+14%
+8%
+24%
-19%
-9%
+18%
-13%
-5%
-15%
+103%
+43%
+9%
+4%
n/a
+40%
+8%
+4%
n/a
+40%
-37%
+4%
-0%
-27%
-49%
-31%
+43%
-23%
-14%
+179%
+71%
+72%
1 The financial performance reported by the Group contains certain Alternative Performance Measures (APMs) disclosed to complement measures that are defined
or specified under International Financial Reporting Standards (IFRS). For more information on the APMs used by the Group, including justification for their use,
please refer to the “Alternative performance measures” section below.
2 Adjusted for the after-tax amount of impairment charges, write-downs of metal inventory, foreign exchange gains/losses and other changes in fair value of
contingent consideration.
3 Profit for the year
4 On a cash basis, representing cash outflow on purchases of property, plant and equipment in the consolidated statement of cash flows.
5 Totals may not correspond to the sum of the separate figures due to rounding. % changes can be different from zero even when absolute amounts are unchanged
because of rounding. Likewise, % changes can be equal to zero when absolute amounts differ due to the same reason. This note applies to all tables in this release.
6 Defined in the “Alternative performance measures” section below.
7
In accordance with IFRS, revenue is presented net of treatment charges which are subtracted in calculating the amount to be invoiced. Average realised prices are
calculated as revenue divided by gold and silver volumes sold, without effect of treatment charges deductions from revenue.
8 Allocation factors for corporate costs were revised in 2023, previous periods were restated accordingly.
28
29
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Financial review continued
Revenue analysis
Sales volumes
Gold
Silver
Gold equivalent sold1
Sales by metal
Gold
Average realised price2
Average LBMA gold price
Share of revenues
Silver
Average realised price
Average LBMA silver price
Share of revenues
Other metals
Share of revenues
Total revenue
$m
$/oz
$/oz
$m
$/oz
$/oz
$m
$m
Koz
Moz
Koz
2023
2,640
1,929
1,943
87%
363
22.8
23.4
12%
22
1%
2022
2,392
1,764
1,802
85%
383
21.9
21.8
14%
26
1%
2023
1,400
16.6
1,608
Change
+10%
+9%
+8%
-5%
+4%
+8%
-15%
3,025
2,801
+8%
(13)
237
In 2023, revenue grew by 8% year-on-year driven by the growth of gold and silver average realised prices. Gold sales
increased marginally by 2% year-on-year. Silver sales decreased by 10% due to significant tightening of concentrate export
regulations in Russia, which led to material accumulation in sea ports of concentrates from Russian assets.
The Group’s average realised gold price was $1,929/oz in 2023, up 9% from $1,764/oz in 2022, slightly below the average
market price of $1,943/oz. The Group’s average realised silver price was $22.8/oz, higher by 4% year-on-year, but 3%
below the average market price of $23.4/oz since two-thirds of annual sales were skewed towards the first half of 2023
with weaker average prices.
The share of gold sales as a percentage of total revenue increased from 85% in 2022 to 87% in 2023, driven by
a corresponding shift in production and sales volume by metal.
Analysis by segment/operation
Operation
Kazakhstan
Kyzyl
Varvara
Other³
Russia
Total revenue
Revenue, $m
Gold equivalent sold, Koz
2023
893
518
365
10
2,132
3,025
2022
933
554
379
–
1,868
2,801
Change
-4%
-7%
-4%
n/a
+14%
+8%
2023
459
271
188
5
1,144
1,608
2022
533
322
212
–
1,089
1,622
Change
-14%
-16%
-11%
n/a
+5%
-1%
The decrease in sales volumes during the period had a negative impact on revenues at all operating mines in Kazakhstan,
which was partially offset by higher commodity prices. Difficulties with inventory conversion into sales were particularly
pronounced with concentrates going through Russian Far Eastern ports, including Kyzyl concentrate being sold to China.
Management will continue to work to resolve this issue during the first half of 2024, particularly focusing on Kyzyl.
At Varvara, sales volumes broadly followed production volumes, which decreased as a result of planned grade decline.
1 Based on actual realised prices.
2 Without the effect of deductions for treatment charges from revenue.
3 Commission sales of third-party materials.
30
2022
1,376
18.5
1,622
Change
+2%
-10%
-1%
Volume
variance,
$m
41
Price
variance,
$m
206
Cost of sales
$m
Cash operating costs
On-mine costs
Smelting costs
Purchase of metal inventories from third parties
Mining tax
Costs of production
Depreciation and depletion of operating assets
Rehabilitation expenses
Total change in metal inventories
Increase in metal inventories
(Reversal)/Write-down of inventories to net realisable value
Idle capacities and abnormal production costs
2023
1,454
632
532
127
163
1,734
280
–
(282)
(276)
(6)
7
2022
1,513
741
567
69
136
1,836
324
(1)
(152)
(216)
64
6
(40)
20
Total cost of sales
1,459
1,690
Change
-4%
-15%
-6%
+84%
+20%
-6%
-14%
n/a
+86%
+28%
n/a
+17%
-14%
2022
Share
38%
29%
19%
9%
5%
1%
Cash operating cost structure
Services
Consumables and spare parts
Labour
Mining tax
Purchase of metal inventories from third parties
Other expenses
Total cash operating cost
2023
$m
490
406
257
163
127
11
2023
Share
34%
28%
18%
11%
9%
1%
2022
$m
576
438
285
136
69
9
1,454
100%
1,513
100%
The total cost of sales decreased by 14% in 2023 to $1,459 million, reflecting the positive impact of the Russian Rouble
depreciating by 24%. The devaluation impact from Russian operations offset domestic inflation (9% in Kazakhstan and 7% in
Russia, year-on-year) and increase in mining tax.
The cost of services and of consumables and spare parts were down 15% and 7%, year-on-year, caused mostly by a weaker
Rouble compared with 2022.
The cost of labour within cash operating costs was $257 million, a 10% decrease over 2022, mainly stemming from local
currency devaluations, which outweighed the annual salary increases (tracking domestic CPI inflation).
Mining tax increased by 20% year-on-year to $163 million, mainly driven by an increase in average realised prices, as well as
gold mining tax rates in Kazakhstan increasing from 5% to 7.5%.
The increase in purchases of third-party metal inventories by 84% was mostly driven by larger volumes of high-grade third-
party ore processed at the Varvara flotation circuit.
Depreciation and depletion was $280 million, down 14% year-on-year, largely driven by the positive effect of a weaker Rouble.
$26 million of depreciation cost are included within the total increase in metal inventories (2022: $52 million).
In 2023, a net metal inventory increase of $276 million (2022: $216 million) was recorded. The increase was mainly
represented by concentrate build-up at Russian assets, due to the tightening of concentrate export regulations in Russia. The
Company expects the bulk of this increase to be reversed during the course of 2024, particularly at Kyzyl.
The Group recognised a $6 million reversal (2022: $65 million write-down) to the net realisable value of heap leach ore at
Russian mines (see Note 21 of the consolidated financial statements).
General, administrative and selling expenses
$m
Labour
Services
Share-based compensation
Depreciation
Other
Total general, administrative and selling expenses
2023
215
19
11
7
22
274
2022
Change
243
15
13
10
30
311
-11%
+27%
-15%
-30%
-27%
-12%
General, administrative and selling expenses (SGA) decreased by 12% year-on-year from $311 million in 2022 to
$274 million in 2023, mainly reflecting a decrease in staff costs in US Dollar terms driven by devaluation of the Rouble.
31
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Financial review continued
Other operating expenses
$m
Exploration expenses
Social payments
Bad debt allowance
Provision for investment in Special Economic Zones
Taxes, other than income tax
Additional tax charges/fines/penalties
Change in estimate of environmental obligations
Other expenses
Total other operating expenses
2023
2022
Change
35
34
19
15
14
–
(7)
7
62
44
(1)
14
15
2
(2)
7
117
142
-44%
-23%
n/a
+7%
-7%
n/a
n/a
n/a
-18%
Other operating expenses decreased to $117 million in 2023 (2022: $142 million), mainly due to the reduction in exploration
costs and a scheduled decrease in social payments in accordance with existing partnership agreements.
Total cash costs
In 2023, total cash costs per gold equivalent ounce sold were $861/GE oz, down 8% year-on-year. The depreciation of the
Russian Rouble against the US Dollar outweighed inflationary pressures and planned grade decline.
Total cash costs by segment/operation
Operation
Kazakhstan
Kyzyl
Varvara
Russia
Total Group TCC
Kazakhstan
Cash cost per GE ounce, $/GE oz
Gold equivalent sold, Koz
2023
903
704
1,189
845
861
2022
728
602
920
1,046
942
Change
+24%
+17%
+29%
-19%
-9%
2023
459
271
188
1,144
1,603¹
2022
533
322
212
1,089
1,622
Change
-14%
-16%
-11%
+5%
-1%
• Kyzyl’s TCC were at $704/GE oz, significantly below the Group’s average level, albeit up 17% year-on-year, because of a
planned gradual grade decline towards the open-pit reserve average (8% decrease in 2023) and an 16% decrease in
sales volumes.
• At Varvara, TCC were at $1,189/GE oz, up by 29% year-on-year on the back of a planned grade decline of 13%,
combined with a 11% decrease in sales volumes and inflationary headwinds.
Russia
• Across the Group’s Russian mines, TCC were at $845/GE oz, down by 19% year-on-year, mainly on the back of Rouble
depreciation.
All-in sustaining and all-in cash costs
All-in sustaining cash costs amounted to $1,276/GE oz, down 5% year-on-year, broadly in line with TCC dynamics,
reflecting the decrease in capitalised stripping on the back of completed stripping campaigns at Dukat.
All-in sustaining cash costs by segment/operation
$/GE oz
Operation
Kazakhstan
Kyzyl
Varvara
Russia
Total Group AISC
2023
1,263
920
1,592
1,281
1,276
2022
Change
1,067²
852
1,144
1,480²
1,344
+18%
+8%
+39%
-13%
-5%
All-in sustaining cash costs by operation:
• AISC at all operating mines generally followed TCC dynamics.
• In Kazakhstan, AISC increased by 18% to $1,263/oz, which was mostly driven by the decrease in sales volume, resulting
in the spread of sizeable sustaining capital expenditure (including investments in new tailing storage facilities at Varvara)
over a limited amount of ounces sold.
• In Russia, AISC decreased by 13% to $1,281/oz on the back of sales increase, coupled with lower stripping volumes
after completion of large stripping campaigns in 2023.
Reconciliation of all-in costs
Total, $m
$/GE oz
2023
2022
Change
2023
2022
Change
Cost of sales, excluding depreciation,
depletion and write-down of inventory to net
realisable value (Note 5 of financial statements)
Adjusted for:
Corporate expenses
Idle capacities
Treatment charges deductions reclassification
to cost of sales
SGA expenses, excluding depreciation,
amortization and share-based compensation
(Note 5 of financial statements)
Adjusted for:
SGA expenses of development projects
Total cash costs
Corporate SGA expenses and other segment
and other operating expenses
Capital expenditure excluding development
projects
Exploration expenditure (capitalised)
Capitalised stripping
(10)
(7)
77
116
(7)
1,381
225
365
10
65
1,212
1,355
-11%
0
(6)
60
n/a
+14%
+28%
133
-13%
837
-10%
0
(4)
37
n/a
0%
+30%
82
-12%
754
(5)
(4)
48
72
(4)
861
140
228
6
40
(10)
942
167
170
9
57
1,276
1,344
84
30
135
68
22
144
1,526
1,579
150
12
260
25
1,688
1,865
(16)
1,528
271
275
15
92
-57%
-10%
-17%
+33%
-37%
-30%
-6%
+22%
+38%
-8%
-5%
-44%
-51%
-11%
-60%
-9%
-16%
+34%
-33%
-30%
-5%
+24%
+36%
-6%
-3%
-42%
-52%
-9%
33
93
22
25
1,276
All-in costs
Finance costs (net)
Capitalised interest
Income tax paid
After-tax all-in cash costs
Capital expenditure for development projects
SGA and other expenses for development assets
135
49
216
2,445
241
20
2,705
111
35
234³
2,562
422
40
3,024
Reconciliation of AISC movements
(AISC, $/oz)
1,344
1,200
1,100
1,000
900
800
(209)
Cost per GE oz 2022
RUB and KZT rate change
Domestic inflation
Change in average grade
processed
Sustaining capex increase
and other
Cost per GE oz 2023
All-in sustaining cash costs
2,045
2,181
1 Excluding commission sales of third-party materials
32
2 Allocation factors for corporate costs were revised in 2023, previous periods were restated accordingly.
3 Prior year restated: income tax on cash basis is considered more relevant for cash costs calculation instead of income tax on accruals basis.
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Financial review continued
Adjusted EBITDA¹ and EBITDA margin
$m
Profit/(loss) for the year
Finance cost (net)2
Income tax expense/(benefit)
Depreciation and depletion
EBITDA
Net foreign exchange loss
Impairment of non-current assets, net
(Gain)/loss on disposal of subsidiaries, net
Share-based compensation
Change in fair value of contingent consideration liability
Other non-cash items
Adjusted EBITDA
Adjusted EBITDA margin
Adjusted EBITDA per GE oz
Adjusted EBITDA by segment/operation
$m
Kazakhstan
Kyzyl
Varvara
Attributable corporate and other costs
Russia
Total Group Adjusted EBITDA
2023
528
135
315
261
1,239
174
126
(113)
11
8
13
1,458
48%
907
2023
439
332
137
(30)
1,019
1,458
2022
(288)
111
(44)
282
61
32
825
2
13
20
65
1,017
36%
628
Change
n/a
+22%
n/a
-7%
n/a
n/a
n/a
n/a
-15%
n/a
n/a
+43%
+12%
+44%
2022
Change
516
361
177
(22)
501
1,017
-15%
-8%
-22%
+36%
+103%
+43%
In 2023, Adjusted EBITDA increased by 43% year-on-year to $1,458 million, with an Adjusted EBITDA margin of 48% (2022:
36%), driven by the cost dynamics described above combined with a 9% increase in the gold average realised price.
Other income statement items
Polymetal recorded a net foreign exchange loss in 2023 of $174 million compared with an exchange loss of $32 million in
2022, mostly attributable to the revaluation of the US Dollar-denominated borrowings of Russian operating companies, the
functional currency of which is the Russian Rouble. This was partially offset by a foreign exchange loss on intercompany
loans with different functional currencies in lending and borrowing subsidiaries.
The Group does not use any hedging instruments for managing foreign exchange risk, other than a natural hedge arising
from the fact that the majority of the Group’s revenue is denominated or calculated in US Dollars.
In 2023 the Group recognised an impairment charge of $165 milllion in respect of Amursk POX, due to continued use of
Amursk POX processing facility to treat Kyzyl refractory concentrate on the terms of a new tolling agreement, as entailed by
provisions of JSC Polymetal divestment. See Note 3 to the consolidated financial statements.
Income tax expense for 2023 was $315 million compared with a $44 million benefit in 2022. For details refer to Note 16 of
the consolidated financial statements.
Net earnings, earnings per share and dividends
The Group recorded a net profit of $528 million in 2023, compared with a loss of $288 million in 2022 which was largely
driven by impairment charges.
In September 2023, the Group effectively disposed of 50.1% stake in Amikan and recognised a gain on disposal of $113
million. See Note 3 to the consolidated financial statements.
The underlying net earnings attributable to shareholders of the parent company were $615 million, compared with $440
million in 2022.
Reconciliation of underlying net earnings3
$m
Profit/(loss) for the financial period attributable to shareholders of the parent company
(Reversal)/write-down of inventory to net realisable value
Foreign exchange loss
Change in fair value of contingent consideration liability
(Gain)/loss on disposal of subsidiaries, net
Impairment of non-current assets, net
Tax effect
Underlying net earnings
2023
528
(6)
174
8
(113)
126
(103)
615
2022
(288)
64
32
20
2
825
(216)
440
Change
n/a
n/a
+444%
-60%
n/a
n/a
-52%
+44%
Basic profit per share was $1.11 compared with a $0.61 loss per share in 2022. Underlying basic EPS⁴ was $1.30,
compared with $0.93 in 2022.
Capital expenditure5
$m
Development projects
Kazakhstan
Ertis POX
Other
Russia
Operating assets
Kazakhstan
Varvara
Kyzyl
Russia
Total capital expenditure
Sustaining
Development
Stripping and underground
development
Exploration
Total
2023
Total
2022
–
–
–
–
–
365
79
55
24
286
365
241
23
23
–
218
–
–
–
–
–
241
–
–
–
–
–
65
42
13
29
23
65
1
1
–
1
1
9
–
–
–
9
10
242
24
23
1
218
438
121
68
53
319
679
249
–
–
–
249
543
102
39
62
442
794
In 2023, total capital expenditure was $679 million⁶, down 14% year-on-year and 3% below the lower end of the guidance
range of $700-750 million, because of the substantial positive impact of the Russian Rouble devaluation on local-currency
costs. Capital expenditure excluding capitalised stripping costs was $614 million in 2023 (2022: $679 million).
The major capital expenditure items in 2023 were as follows:
Development projects
• In Kazakhstan, capital expenditure of $23 million was related to initial investments for the Ertis POX facility, which is
being developed in order to fully sever the link between the Company's subsidiaries in Kazakhstan and its blocked
subsidiaries in the Russian Federation. A land plot in the Pavlodar Special Economic Zone was successfully secured.
• Capital expenditure at development projects of $218 million in Russia mainly covered Amursk POX-2 to ensure project
completion according to plan in the second half of 2024, as well as mining fleet purchases, spare parts and
consumables purchases at Veduga.
Stay-in-business capital expenditure at operating assets
• At Varvara, capital expenditure of $55 million was mainly related to the construction of a tailings storage facility and
upgrading the mining fleet.
• At Kyzyl, capital expenditure in 2023 comprised $24 million, mainly represented by scheduled technical upgrades and
expansion of the concentrator capacity to 2.4 Mtpa.
• Across the Group’s Russian mines, capital expenditure of $286 million was mostly related to infrastructure upgrades,
regular mining fleet replacements and maintenance capital expenditure at processing facilities.
Exploration and stripping
• The Group continues to invest in standalone exploration projects. Capital expenditure for exploration in 2023 was
$10 million (2022: $17 million).
• Capitalised stripping and underground development costs totalled $65 million in 2023 (2022: $115 million) and are
attributable to operations with 2023 stripping ratios exceeding their life-of-mine averages during the period, particularly
Kyzyl ($29 million), Varvara ($13 million) and Russian mines ($23 million).
1 Adjusted EBITDA is a key measure of the Group's operating performance and cash generation capacity (excluding impact of financing, depreciation and tax) and a
key industry benchmark allowing peer comparison. Adjusted EBITDA also excludes the impact of certain accounting adjustments (mainly non-cash items) that can
mask underlying changes in core operating performance. The Group defines Adjusted EBITDA (a non-IFRS measure) as profit for the period adjusted for
depreciation and amortisation, write-downs and reversals of inventory to net realisable value, share-based compensation expenses, gains and losses on disposal
or revaluation of investments in subsidiaries, joint ventures and associates, rehabilitation expenses, bad debt allowance, foreign exchange gains or losses, changes
in fair value of contingent consideration, finance income, finance costs, income tax expense and other tax exposures accrued within other operating expenses.
Adjusted EBITDA margin is Adjusted EBITDA divided by revenue.
2 Net of finance income.
3 Underlying net earnings represent net profit for the year ,excluding the impact of key items that can mask underlying changes in core performance, such as
after-tax amount of impairment charges, write-downs of metal inventory, foreign exchange gains/losses and other changes in fair value of contingent consideration.
4 Underlying basic EPS are calculated based on underlying net earnings.
5 On a cash basis.
6 On accrual basis, capital expenditure was $756 million in 2023 (2022: $883 million).
34
35
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Financial review continued
Cash flows
$m
Operating cash flows before changes in working capital
Changes in working capital
Total operating cash flows
Capital expenditure
Net cash (outflow)/inflow on M&A
Other
Investing cash flows
Financing cash flows
Net changes in borrowings
Repayments of principal under lease liabilities
Acquisition of non-controlling interest
Contingent consideration paid
Total financing cash flows
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
2023
1,074
(499)
575
(679)
(3)
(24)
(706)
380
(21)
–
–
359
228
633
(19)
842
2022
679
(473)
206
(794)
123
(8)
(679)
838
–
(24)
(27)
787
314
417
(98)
633
Change
+58%
+5%
+179%
-14%
n/a
n/a
+4%
-55%
n/a
n/a
n/a
-54%
-27%
+52%
n/a
+33%
Total operating cash flows in 2023 strengthened year-on-year. Operating cash flows before changes in working capital grew
by 58% year-on-year to $1,074 million, as a result of an decrease in adjusted EBITDA. Net operating cash flows were $575
million, compared with $206 million in 2022, affected by an increase in working capital of $499 million (2022: $473 million).
Total cash and cash equivalents increased by 33% compared with 2022 and comprised $842 million, with the following
items affecting the cash position of the Group:
• Operating cash flows of $575 million
• Investment cash outflows totalling $706 million, up 4% year-on-year, mainly represented by capital expenditure (down
14% year-on-year to $679 million) and cash flows on acquisitions and disposals ($3 million)
• The gross borrowings increase of $380 million, mostly driven by financing of the Group’s short-term working capital
requirements
• Repayments of principal under lease liabilities of $21 million.
Balance sheet, liquidity and funding
The Group’s net debt decreased to $2,383 million as of 31 December 2023, representing a Net debt/Adjusted EBITDA ratio
of 1.64x, significantly below the 2022 leverage ratio of 2.35x.
The proportion of long-term borrowings of total borrowings was 69% as at 31 December 2023 (83% as at 31 December
2022). As at 31 December 2023, the Group had $1.4 billion (31 December 2022: $0.35 billion) of available undrawn facilities
from a wide range of lenders, which allows the Group to maintain its operational flexibility in the current environment.
Gross debt increased by 7% to $3,225 million, of which 73% is denominated in hard currency. Kazakhstan represents 16%
of the total debt outstanding, while Russia represents the remaining 84% of the debt.
The average cost of debt increased to 8.3% in 2023 (2022: 5.08%). In Kazakhstan, average interest rates remained low at
3.95%, while for Russian subsidiaries it reached 9.1% as re-financing was available mostly in Roubles or in China's
Renminbi at elevated interest rates.
77% of available cash balances of $842 million is denominated in hard currency. The Group is confident in its ability to
repay its existing borrowings as they fall due.
$m
Total Net debt
Total Net debt /Adjusted EBITDA
Kazakhstan
Short-term debt and current portion of long-term debt
Long-term debt
Gross debt
Less: cash and cash equivalents
Net debt
Net debt /Adjusted EBITDA
Russia
Short-term debt and current portion of long-term debt
Long-term debt
Gross debt
Less: cash and cash equivalents
Net debt
Net debt /Adjusted EBITDA
Inventories
31 Dec 2023
31 Dec 2022
Change
2,383
1.64
145
356
503
329
174
2,393
2.35
76
719
795
518
277
0.39x
0.54x
860
1,864
2,724
514
2,209
2.17x
439
1,797
2,236
119
2,117
4.23x
-0%
-31%
+91%
-50%
-37%
-36%
-37%
-38%
+96%
+4%
+22%
n/a
+4%
-95%
Inventory levels increased by $104 million to $1,294 million for 2023. $274 million of inventory balance relates to Kazakhstan
and $1,020 million of inventory comes from Russia.
The increase of $95 million for the second half of 2023 relates mostly to accumulation in sea ports of concentrates from
Russian assets.
$m
31 Dec 2023
Change
30 Jun 2023
Change
31 Dec 2022
Kazakhstan
Сopper, gold and silver concentrate
Ore stock piles
Doré, work in-process, metal for refining and refined metals
Non-metal inventories
Russia
Сopper, gold and silver concentrate
Ore stock piles
Doré, work in-process, metal for refining and refined metals
Non-metal inventories
Total inventory
274
66
86
51
71
1,020
266
173
247
333
1,294
+8
+7
+0
-3
+3
+86
+15
-19
+81
+10
+95
267
59
86
54
68
934
252
192
167
323
1,199
+77
+20
+14
+26
+16
-66
-6
-55
+7
-12
+9
190
39
71
29
51
1,000
248
247
170
335
1,190
Payable metals in inventory accumulated at 31 December 2023 were as follows:
GE Koz
Concentrate and precipitate
Bullions
Doré
Total payable metals
Kazakhstan
Russia
Total Group
65
–
12
78
206
291
23
519
271
291
35
597
2024 outlook for Kazakhstan business
• The Company expects its Kazakhstan assets to deliver stable production at 475 Koz of GE.
• Costs are estimated in the ranges of $900-1,000/GE oz for TCC and $1,250-1,350/GE oz for AISC¹. A year-on-year
increase is expected, largely because of the sharp increases in power and railway tariffs in Kazakhstan.
• Capital expenditures are expected to be approximately $225 million, including $60 million for Ertis POX.
• The Group currently forecasts positive free cash flow in 2024.
36
37
1 Based on 500 KZT/$ and 13% inflation in Kazakhstan.
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability
39 How we manage sustainability
40 Material issues
42 Health and safety
46 Employees
50 Environment
56 Climate and energy
62 Communities
64 Ethical business
Sustainability
ESG excellence: upholding core values
In the face of significant challenges, Polymetal remains committed to upholding high ESG
standards. We consider these principles to be key to the strategic stability of the business
and continue to integrate them into all Company processes. This requires leadership from
the very top of the organisation, with our sustainability approach and performance
overseen by Board-level committees, while accountability ultimately lies with our Group
CEO; ESG-related remuneration KPIs are implemented across the Group.
How we manage sustainability
The Board defines business strategy, assesses risks and
monitors performance. During the year, our Board
conducted several sustainability performance reviews, as
well as approving sustainability initiatives and reporting.
The Safety and Sustainability Committee has a mandate to
provide support to the Board on a wide range of
sustainability issues, such as health and safety, stakeholder
engagement, social impact assessment, environmental and
climate change risks. It also oversees the implementation of
short- and long-term policies and standards, making sure
that we work ethically, transparently and responsibly. Given
the sanctions imposed against JSC Polymetal and its
Russian subsidiaries prior to their disposal, in 2023, the
Board focused on the strategic development and
adaptation of the Kazakhstan segment of the Group.
Oversight of compliance with all adopted policies and
standards in the field of sustainable development at Russian
enterprises has been delegated to the executives of
JSC Polymetal.
Maintaining an effective corporate governance system for
sustainable development issues remains one of our top
priorities. With the support of the Safety and Sustainability
Committee, the Board reviewed and updated key corporate
policies and internal standards in 2023. This included
Environmental and Climate Management Systems, which
now prioritise the specificities and development priorities of
the Group’s enterprises in Kazakhstan. The scope excluded
JSC Polymetal and its subsidiaries since its entire decision-
making process came under the remit of the management
of JSC Polymetal due to sanctions. On 7 March 2024,
Polymetal International completed the disposal of its
Russian business. Read more on the Safety and
Sustainability Committee’s activity in 2023 on pages 98-99.
Our Remuneration Committee continues to set the
framework and broad remuneration policy for the Chair,
Group CEO and the executive management team, as well
as monitoring the gender pay gap. The Nomination
Committee is responsible for recommending Board and
Committee members and ensuring that a balance of skills,
knowledge, independence, experience and diversity are
reflected.
Our strict approach to sustainability issues is underpinned
by ESG remuneration KPIs that cascade down from Group
CEO and COO to mine directors, subsidiary directors and
their deputies, senior managers, heads of operational units
and other levels of employees. In addition to safety KPIs
and penalties for work-related fatalities and severe injuries,
our ESG scorecard outlines remuneration-linked targets on
Climate Action Plan implementation, water management,
gender diversity and impact on local communities (read
more on page 111).
Our contribution to the UN SDGs
By addressing the UN Sustainable Development Goals
(SDGs), we make sure that we contribute to a more
sustainable world with every business decision. Our
sustainability agenda is built around 12 SDGs that
complement and depend on each other.
With our efficient mining operations and new development
projects, such as Ertis POX in the Pavlodar region in
Kazakhstan, we stimulate development and economic
growth within communities (SDG 8), while ensuring the
health and well-being of the people we work with (SDG 3).
We contribute to community development not only through
the taxes we pay and the jobs that we create, but also by
directly supporting local healthcare (SDG 3) and educational
institutions (SDG 4), renovating local infrastructure (SDG 9),
making charitable donations (SDG 1) and implementing
other projects that our neighbouring communities find most
relevant to them. We also contribute to these SDGs by
providing our employees with safe working conditions,
decent remuneration and professional development.
We oppose any kind of discrimination and particularly aim
to eliminate gender stereotypes when it comes to women
working in the mining industry (SDG 5).
We do all we can to minimise the impact of mining on
natural resources by using these efficiently and taking
responsibility for environmental risks (SDG 12). This includes
reducing fresh water withdrawal and ensuring discharge
water quality (SDG 6), managing waste and hazardous
materials responsibly, reducing land use through backfilling
and monitoring biodiversity (SDG 15). We also recognise
that mining activities can result in adverse consequences
for the climate while, at the same time, they are exposed to
climate-related risks. Our Climate Strategy and energy
management approach underpin our commitment to
SDG 13.
Finally, SDG 16 and SDG 17 reflect our overall approach to
business and stakeholder engagement. We strive to work in
an ethical and fair way, and embrace partnerships for
positive change.
38
39
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability
Material issues
We consider sustainability issues at all stages of a mining
project, focusing on those that matter most for our
Company and stakeholders. These issues inform our ESG
agenda and disclosures, and are integrated into our
business strategy and risk management procedures. Our
materiality determination process involves both external and
internal sources:
• Identifying social and environmental impacts in the
mining sector described in academic research and
market reviews
• Analysing internal and external stakeholders
expectations
• Monitoring non-financial reporting standards such as
GRI and SASB, TCFD recommendations, new IFRS S1
and S2 standards and reviewing peers’ reports
• Reviewing our internal risk registers and external global
risks reports
• Analysing social, economic and environmental contexts
via available sources and tools.
For each issue identified as material, we set measurable
targets and report on performance. Considering the
strategic focus on developing our business in Kazakhstan,
in 2023, we conducted an in-depth reassessment of our
material issues. While these remain unchanged, we have
revised, reprioritised and clarified focus areas for 2024 to
ensure a smooth transition of the Group post-restructuring
following divestment of JSC Polymetal and its subsidiaries
in Russia in March 2024.
Material issues
Targets for 2023
Performance in 2023
Areas of focus 2024
Health
and safety
Ensure zero fatalities
Maintain LTIFR below 0.2
Year-on-year decrease in absent days
following accidents
` Read more
on pages 42-45
Employees
Zero fatalities Group-wide and zero
fatalities in Kazakhstan (2022: zero
fatalities)
Ensure zero fatalities among
employees and contractors
Group-wide LTIFR 0.07 (2022: 0.10)
LTIFR in Kazakhstan 0 (2022: 0)
Maintaining LTIFR at zero
level at our operations in
Kazakhstan
32% year-on-year Group-wide increase
(1,156 days in 2023 compared with 877
in 2022, including 0 days in Kazakhstan
in 2023 and 2022)
Maintaining zero level of
absent days following
accidents in Kazakhstan
Maintain voluntary turnover rate
below 10%
4.7% Group-wide voluntary turnover
and 1.4% in Kazakhstan (2022: 8.4%
and 4.6%, respectively)
Maintaining voluntary
turnover rate in Kazakhstan
at minimal level
Improve equality and diversity,
including women’s representation of
33% in the Talent Pool in 2023
21% women in total workforce and 20%
in Kazakhstan (2022: 21% and 20%,
respectively); 27% in Group-wide Talent
Pool and 25% in Kazakhstan
(2022: 35% and 35%, respectively)
Improving equality and
diversity, including women’s
representation in total
headcount in Kazakhstan
Support labour rights
` Read more
on pages 46-49
Water
55% decrease in fresh water
withdrawal¹ per tonne of ore
processed by 2030 (2019 baseline)
77% of employees under collective
agreements Group-wide and 91% in
Kazakhstan
Maintaining the share of
employees under collective
agreements in Kazakhstan at
more than 90%
53% decrease Group-wide (125 and
268 m3/Kt of processed ore in 2023
and 2019 respectively). 47% decrease in
Kazakhstan (178 and 336 m3/Kt of
processed ore in 2023 and 2019
respectively).
Maintaining fresh water
consumption intensity per
tonne of ore processed in
Kazakhstan at the achieved
minimal level
` Read more
on pages 50-53
Increase share of water recycled/
reused
93% of water reused/recycled
Group-wide and 90% in Kazakhstan
(2022: 91% and 90%, respectively)
Maintaining the share of
water recycled/reused Kyzyl
and Varvara hub at the 2023
level and ensure the
implementation of water
recycling technologies in the
design of the EPOX project
Key:
Target achieved
Target on track
Target not achieved
Target postponed
1 Excluding water for non-technological purposes.
40
Material issues
Targets for 2023
Performance in 2023
Areas of focus for 2024
Climate &
Energy
30% decrease in GHG emission
intensity per ounce of gold equivalent
by 2030 (Scopes 1 and 2, 2019
baseline)
35% decrease in absolute GHG
emissions by 2030 (Scopes 1 and 2,
2019 baseline)
` Read more
on pages 56-61
Achieve 7% of total electricity
self-generation from renewable
sources by 2025
15% decrease Group-wide
(10% increase in Kazakhstan)
15% decrease Group-wide
(8% increase in Kazakhstan)
9,413 GJ generated Group-wide
(1.0% of electricity self-generation)
including 19 GJ in Kazakhstan
(6.5% of electricity self-generation)
Waste and
pollutants
Increase share of waste reused and
recycled by backfilling overburden
waste whenever possible
17% of waste reused/recycled
Group-wide and 8% in Kazakhstan
(2022: 23% and 10%, respectively)
` Read more
on pages 52-55
Achieve 50% dry-stack tailings
storage of tailing total waste by 2030
(interim target for 2023 – 13%)
30% of Group-wide tailings dry
stacked (2022: 28%) and four
operating dry tailings stacking facilities
in Russia (there are no dry stacking
facilities in Kazakhstan)
Biodiversity
and lands
By 2023 design a framework to
evaluate Polymetal’s biodiversity
footprint
Target has been postponed
Updating the Climate
Strategy, including climate
management in the supply
chain, and developing an
approach to achieving
carbon neutrality, considering
changes in the Group's
structure
Ensuring the timely and
properly implementation of
plans for the construction of
solar power stations at
Varvara hub and Kyzyl
Analyse the potential for
increasing the share of waste
reused/recycled in
Kazakhstan and ensure the
implementation Cyanide
Code principles for the EPOX
project
Target to be removed from
2024, since following the
divestment of Russian
assets in March 2024, we
have no operational or
projected dry stacking
facilities
Ensuring the full compliance
to the applicable national and
international biodiversity
standards in Kazakhstan
By 2025 reforest 2,750 ha
` Read more on
page 50-55, 60-61
Communities
200 ha of land reforested in Russia in
2023 (2,066 ha in Russia in 2021-
2023, no land in Kazakhstan has yet
been reforested)
Ensuring the timely and
properly implementation of
the afforestation project in
Kostanay region in
Kazakhstan
Ensure zero community conflicts
Zero conflicts Group-wide and zero
conflicts in Kazakhstan
Ensure zero community
conflicts
Ensure positive engagement
780 inquires received and resolved
Group-wide and 335 in Kazakhstan
(2022: 839 and 223 respectively)
Ensure positive engagement
Maintain the level of financial giving
$17.6m invested in social projects
Group-wide and $7.3m in Kazakhstan
(2022: $23.2m and $8.8m, respectively)
Maintain the level of financial
giving
` Read more
on pages 62-63
Supply chain
50% share of regional procurement
by 2024
36% Group-wide and 38% in
Kazakhstan
Maintaining the share of
regional procurement in
Kazakhstan at more than
35%
ESG score for key suppliers by 2023
` Read more
on pages 64-67
ESG assessment is obligatory for
contractors working on our premises
and it is voluntary for new suppliers
while the supplier pool undergoes
significant changes. Target has been
postponed for 2024-2025
Developing an ESG-score
approach for key suppliers,
due to potential changes in
the Group's structure
41
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Sustainability continued
Health and safety
In our high-risk industry, the growth and sustainability of the business depend
on healthy, resilient employees and local communities. We put safety first and
our health strategy goes beyond compliance, enhancing well-being and
fostering a sustainable future.
Assets in Kazakhstan at a glance
Zero
fatalities among
employees and
contractors
100%
operating sites
certified to ISO 45001
Zero
lost-time incidents
among employees and
contractors
Areas of focus
• Ensure zero fatalities and maintaining LTIFR at
zero level among employees and contractors
• Maintaining zero level of absent days following
accidents
• Compliance with the applicable operational health
and safety legislation and international standards
• Safety culture based on risk assessment and
employee engagement
• Continuous improvement of safety management
by applying up-to-date technologies and
equipment.
Which guidelines do we follow?
External: UN Global Compact, ISO 45001, EBRD
Environmental and Social Policy, Responsible Gold
Mining Principles, national occupational safety
standards.
Corporate: Health and Safety Policy, Occupational
Health and Safety Management System, Code of
Conduct.
Further information
Additional data is available in:
• Polymetal ESG datapack
• Polymetal quarterly and annual production reports
42
Our approach
At Polymetal, we believe that all work-related injuries and
illnesses are preventable. Our top priority is ensuring the
safe return after each working day of every person who
works for and with Polymetal. Key to our health and safety
strategy is effective leadership, fostering a zero-harm
culture and rigorous risk management practices.
Our CEO, COO, mine directors and other senior managers
are personally accountable for safety. Health and safety
metrics are integral to their performance evaluations, with
potential penalties of up to 50% of their annual bonus for
safety lapses resulting in severe incidents or fatalities,
whether involving contractors or our own employees.
Moreover, 25% of their annual bonus is tied to the number
of days lost due to work-related injuries – a key
performance indicator reflecting both the quantity and
severity of injuries. We have also prohibited performance-
based incentives for employees engaged in hazardous
on-site work, aiming to eliminate scenarios where safety
might be compromised for production outcomes.
Our comprehensive Occupational Health and Safety
Management System (OHSMS) is implemented at all operating
sites and undergoes annual audits for ISO 45001 compliance.
It establishes stringent criteria for risk assessment, safety
training, equipment maintenance, contractors engagement
and involvement, and emergency preparedness. We aim to
apply the same standards to our exploration sites, prioritising
employee safety from project inception.
Our Group-wide Health and Safety Policy fosters a zero-
harm culture, empowering employees to refuse unsafe work
and promptly report identified hazards to site management.
This proactive approach ensures effective responses to
operational safety concerns and suggestions.
Risk assessment and mitigation
Our OHSMS hinges on robust risk assessment. Employing a
PDCA (plan-do-check-act) approach, we annually review and
update risk assessments and implement mitigation measures,
assess their effectiveness and adjust the action plan as
necessary. This process considers historical data on
accidents, lost-time incidents and near misses, and
employees’ and contractors’ shift-by-shift risk assessments.
Each industrial process and site has a specific risk map and
mitigation plan, which is subject to regular safety checks. In
2023, we conducted 12,461 safety checks, including 3,415
among our contractors. At our sites in Kazakhstan in 2023, we
conducted 1,180 safety checks¹, including 268 among our
contractors.
If a lost-time accident takes place at our site, we conduct a
thorough investigation applying a ‘five whys’ approach to
identify root causes. We involve authorities and
communicate findings to the relevant teams. If the accident
involves a contractor, we request that their organisation
conducts the investigation together with a Polymetal
representative. Additionally, near-miss incidents, like vehicle
collisions, are also analysed for potential safety risks, even if
they did not result in lost time.
Our Health and Safety Action Plan addresses both recent
materialised risks and other common safety hazards
attributed to our industry. This comprehensive approach
takes into consideration those safety risks that have been
identified as critical:
• jamming by a rotating mechanism
• slipping and tripping while walking
• being hit by an object
• road transportation accidents
• falling rock
• combustion and others.
Guided by the list of critical safety risks, we develop an
annual action plan. For each risk, operational sites
implement mitigation measures, encompassing
administrative steps (e.g. assigning a responsible person),
risk elimination, engineering enhancements (e.g. adopting
digital technologies), additional training and visualisation.
In 2024, we will continue focusing on improving safety at
our exploration sites and development projects, as well as
ensuring that all our facilities – from work camp blocks to
plants – are constructed and equipped in compliance with
strict safety standards.
Digitalising safety
We aim to minimise the human factor by applying digital
technologies. Positioning systems enable dispatchers to
track workers’ precise locations in the mine or on the plant
and prevent them from entering hazardous areas. Similar
fleet dispatching systems have been developed and
implemented to enhance road safety, while circular review
systems on board vehicles aid collision avoidance. In our
underground mines, drilling machinery is equipped with
sensors that automatically stop drilling if a worker
accidentally enters the hazardous area.
To enhance the effectiveness of the daily risk assessment
carried out by workers at the beginning of each shift, we are
also digitalising this process. Employees are equipped with
dedicated devices with built-in safety checklists, allowing
them to submit details about any near-miss incidents during
their shift. This transition streamlines the risk identification
process, enabling site management to better analyse and
improve workplace safety. Our 2024 plans include
expanding the use of digital risk assessment and other
above-mentioned technologies across all operating sites
wherever possible.
1 The number reported comprises speed monitoring, comprehensive safety checks and safety inspections by safety managers.
43
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability continued
Health and safety
In 2023, no fatal accidents occurred, but there were
lost-time incidents among both Polymetal’s workforce and
contractors. While not a single accident occurred and not a
single severe or minor injury was reported in Kazakhstan in
2023, 10 lost-time incidents were recorded among
employees in Russia (13 in 2022) and 4 among Russian
contractors (12 in 2022). Most incidents were the result of
slipping or tripping while walking, being hit by an object or
falling rock.
Group-wide lost-time injury frequency rate (LTIFR ) for 2023
decreased to 0.07 for employees (0.10 in 2022) and 0.08 for
contractors (0.21 in 2022). Days lost due to work-related
employees’ injuries for the full year increased by 32%
year-on-year to 1,156 (877 in 2022). While most of the
incidents that took place during the year were classified as
minor, we still registered two severe injuries among our
employees, related to tripping while walking and falling from
heights. We took responsive measures for each incident,
whether minor or severe, by updating risk maps for relevant
facilities, providing additional instructions to employees and
encouraging contractors to carry out the investigation if the
accident involved a contractor’s worker.
Polymetal employees health and safety
Injuries, including:
Fatalities
Severe injuries
Minor injuries
LTIFR1
Days off work following accidents²
Occupational deseases and health difficulties
Near-misses
Contractor employees safety
Injuries, including:
Fatalities
Severe injuries
Minor injuries
LTIFR1
1 Lost-time injury frequency rate per 200,000 hours worked.
2 Read more on our Health and safety performance in Kazakhstan on page 178.
44
Workers engagement and safety culture
Enforcing ‘zero-harm’ relies on the engagement of each
worker, supported by strong leadership and regular safety
training. Our safety communication campaign involves
articles and interviews in our corporate newspaper,
checklists, videos and visual toolkits. The initiative
encourages active participation by employees at all levels
across the business through contests, project proposals,
non-monetary awards and safety cross-checks between
sites. The goal is to eradicate stereotypes about safe work
and highlight the value of human life and health in day-to-
day operations.
In addition to mandatory safety training from accredited
external training centres, we use an internal virtual learning
system, OLYMPOKS. This platform covers various topics
such as industrial processes, energy, environment,
transport, fire, civil defense, emergencies and first aid. Over
the last year, 6,887 employees participated in mandatory
training on safety, provided both internally and externally
(including 2,972 employees in Kazakhstan). Our
commitment to ongoing safety awareness includes a
comprehensive set of measures on daily basis. We strive to
equip our employees with sufficient training and tools: for
example, each site holds daily safety briefings that include
quick knowledge tests and Q&As.
When working with our contractors, we prioritise safety by
emphasising risks and offering our expertise to assist them
in mitigating these risks. We conduct regular inspections of
contractor operations, work together to address any issues
through health and safety committees, and encourage their
involvement in professional contests alongside our
employees. We also provide training for contractors on the
principles of hazard identification, risk assessment and
procedures for ongoing production control and workplace
monitoring. Ensuring regular hazard identification and risk
assessment is now a standard part of all contractor
agreements.
Units
number
number
number
number
rate
number
number
number
Units
number
number
number
number
rate
Total Group
Assets in Kazakhstan
2023
10
0
2
8
0.07
1,156
8
4,881
2022
13
0
0
13
0.10
877
9
4,770
2023
2022
0
0
0
0
0
0
0
477
0
0
0
0
0
0
0
327
Total Group
Assets in Kazakhstan
2023
4
0
0
4
0.08
2022
12
0
0
12
0.21
2023
2022
0
0
0
0
0
0
0
0
0
0
Kazakhstan:
Ensuring a robust safety culture at all our sites
We apply a zero-tolerance approach to health and safety
hazards and equally strict safety standards at all our
assets. While this is also true for our operations in
Kazakhstan, risks are currently much lower since, at this
stage of development, there are no underground mining
activities. In line with our corporate Health and Safety
Strategy, we emphasise continuous training for our
employees and contractors, foster their awareness of
best practices in industrial safety and strive to provide
them with the most effective tools for risk analysis,
assessment and mitigation.
In 2023, Polymetal’s employees in Kazakhstan
demonstrated the highest level of professionalism, achieving
zero LTIFR rate. However, 477 near-misses were recorded,
emphasising the need for ongoing efforts to ensure safety.²
Digitisation and automation are key to mitigating human
error and ensuring a safe working environment for all
employees. Polymetal’s sites in Kazakhstan utilise digital
control systems for quarry boards and tailings dams, fleet
despatching systems, personnel positioning systems and
automated employee health monitoring.
AI-powered positioning systems for open-pit mining
optimise truck routes, minimising the risk of congestion
and collision accidents. Equipping trucks and excavators
with surround-view systems and driver behaviour analytics
significantly enhances workplace safety. At our processing
plants, light indication systems and personal positioning
systems are deployed to prevent employees from entering
hazardous areas. In 2023, local positioning systems were
implemented at the Varvara plant; hazardous zone light
indication system were expanded at the Kyzyl plant;
wireless connection systems was strengthened at the
Komar and Kyzyl quarries, and behaviour analysis cameras
were added to trucks at the Komar site. Combined with
training in occupational safety, fire drills, defensive driving
courses and professional skills competitions, these
measures all confirm our confidence in our employees and
a robust safety culture.
With zero incidents in 2023, there were also no recorded
cases of occupational diseases or minor injuries at our
assets in Kazakhstan. Recognising the importance of
preventive measures for health care, we conduct regular
pre-shift medical examinations for employees and provide
medical insurance programmes. Caring for our
employees’ well-being, we strive to enhance the
accessibility of medical services and improve the
functionality of our on-site medical centres. For example,
at Kyzyl in 2023, we introduced a test-run for an
automated medical examination system, capable of
testing up to 60 persons per hour: automatically
measuring temperature, pulse, blood pressure, analysing
the central nervous system’s condition and identifying
other critical health issues. In 2024, we will uphold our
Health and Safety Policy, sustaining the already high
safety culture and providing our employees and
contractors with everything necessary to prevent injuries
and hazardous situations in the workplace.
Health and well-being
Employee performance and, consequently, overall
corporate productivity both rely on good health and
well-being. We aim to foster positive occupational health
and contribute to the broader well-being of our employees
and their families.
Occupational health
In 2023, eight cases of occupational diseases were
reported by employees at our Mayskoye, Omolon and
Dukat mines in Russia. All of the employees have worked
extensively in underground mines, and will receive
appropriate payment from the Social Insurance Fund of the
Russian Federation. Employees diagnosed with an
occupational disease may decide to leave the Company,
but those who decide to stay with us are offered another
job with less harmful working conditions. To avoid such
cases occurring again, third-party organisations conduct
regular assessments of working conditions at Polymetal
sites. Dedicated contractors are responsible for ensuring
the highest hygiene standards, while employees receive
regular medical check-ups (including daily health checks
with an automated health monitoring system) and paid leave
for health appointments.
Encouraging well-being
The well-being of our employees is a pivotal aspect of our
HR strategy. We prioritise not only their safety but also their
physical and mental health. Our comprehensive private
health insurance plans provide access to medical
assistance irrespective of employee location or position,
and also cover employees’ children aged below ten without
additional fees. The insurance plan includes health
consultations, a second medical opinion, vaccination,
emergency hospitalisation and other benefits,
complemented by online resources on well-being topics
such as healthy eating and stress management.
To promote a healthy lifestyle, we establish our own fitness
facilities at operational sites and subsidise gym membership
for office workers. Additionally, we organise various
corporate sports events, including hockey, tennis, volleyball
and football tournaments.
45
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Sustainability continued
Employees
Our employees form the foundation and key value of our business, ensuring
the sustainability of our current operations and the success of development
projects. We consider it a fundamental priority to guarantee the development,
self-realisation, protection of rights and well-being of all our people.
Assets in Kazakhstan at a glance
>3,200
average number of
employees
100
hours of training per
employee per year
20%
female employees
100%
of operating site
employees covered by
collective agreements
Areas of focus
• Attracting, retaining and developing best talents and
maintaining voluntary turnover rate in Kazakhstan at
a minimal level
• Ensuring favourable working conditions and
supporting labour rights, including maintaining the
share of employees under collective agreements in
Kazakhstan at more than 90%
• Improving equality and diversity, including women’s
representation.
Which guidelines do we follow?
External: Universal Declaration of Human Rights, UN
Global Compact, ILO Declaration and ILO Conventions,
Responsible Gold Mining Principles, National Labour
Codes.
Corporate: Code of Conduct, Human Resources
Policy, Diversity Policy, Employment and Labour
Corporate Standard, Regulation on Social Conditions
and Service Quality Control, collective agreements.
Further information
Additional data is available in:
• Polymetal ESG datapack
46
Our approach
Attracting and retaining the best talents currently pose
challenges for the mining industry. We aim to provide equitable
and inclusive work environments, competitive salaries and
professional growth prospects, as well as maintaining
communication and motivation through ongoing dialogue and
engagement, particularly during uncertain times.
Our corporate culture is founded on mutual trust and
respect, transparency and integrity, and an unyielding
commitment to development and enhancement. Ongoing
training and mentoring programmes are crafted and revised
to assist employees throughout the Group in enhancing
their expertise in engineering, geology, minerals processing,
environmental protection and other fields. We consistently
ensure that frontline workers have equal access to training
and engagement tools, eliminating any disadvantages
associated with the remote locations of our mining sites.
In addition to talent development, we prioritise the well-
being and satisfaction of our employees. Our internal
communication system allows employees to voice any
issues or concerns without fear of reprisal, ensuring that
appropriate remedial measures are implemented. Complex
or Group-wide issues are escalated to a Board-level
Committee for resolution.
The integrity of our business hinges on the adherence of all
employees and contract workers to our Corporate Code of
Conduct, delineating the expected ethical behaviours
towards all stakeholders. We adopt a zero-tolerance
towards any manifestation of discrimination or harassment,
fostering a culture of equal opportunity. Our dedication to
diversity and inclusion is reinforced by a comprehensive
programme encompassing training, mentoring, talent
attraction and internal communications.
Remuneration and social benefits
We are facing heightened competition in the labour market
and increased demand for mining experts year-on-year, which
is a critically important factor in the planning and
implementation of our development projects. Recognising the
significant role of monetary reward in attracting and retaining
employees, we continuously monitor average salaries in our
operational regions to ensure that Polymetal’s salaries are
equal to or exceed them. Our performance-based
compensation system guarantees fair and equal growth
opportunities for employees. Specifically, for those working in
hazardous environments, the remuneration system prioritises
safety over productivity. Annually, we align wage growth with
the inflation rate: in 2023, salary increases were 20% for
employees in Kazakhstan and 9% for those in Russia.
While the base salaries for individuals performing the same
role are consistent regardless of gender, variations arise due
to the types of tasks commonly associated with male and
female roles. As of 2023, the gender pay gap² decreased to
20% compared with 23% in 2022 (in Kazakhstan, 29% and
30% respectively). We address this pay gap by closely
monitoring the representation of women across different
levels and departments, actively promoting women’s
participation in leadership roles.
For employees with families, we provide paid parental leave
for a duration of up to three years and offer financial
support for nursery fees, after-school activities and holiday
camps. Additionally, those working in remote locations,
along with their families, are entitled to a complimentary
‘health holiday’ every two years. Financial assistance is
extended to employees facing illness or emergencies, as
well as those seeking support for mortgages or retirement
(see our Employment and Labour Corporate Standard).
Acknowledging that nearly half of our employees work on a
fly-in/fly-out basis, we prioritise ensuring comfortable living
conditions and also focus on hygiene, well-being and
recreational facilities.
Training and talent development
Re-skilling and upskilling our employees, coupled with
creating opportunities for idea-sharing and implementation,
allows us to address talent gaps and stay abreast of
technological advancement.
We maintain collaborations with higher education
institutions and colleges to feed our talent pipeline, seeking
to align academic education with our job requirements. Our
partnerships with leading universities in our operational
regions aim to introduce joint educational programmes
focused on digital technologies in mining.
We harness our robust in-house expertise in geology,
exploration, construction, metal processing, ecology and
other aspects of mining. This is achieved by offering online
training and conducting in-person workshops for
employees throughout the Group. Our ongoing geologist
training programme encompasses both theoretical and
practical aspects, covering topics such as geochemical
modelling, big data analytics, exploration methods,
resources classification and ore processing.
Our procurement managers participate in a tailored training
initiative that aids them in acquiring goods and services,
and managing logistics amid the current volatile conditions.
We also provide a specially tailored online training course
on mining for non-mining specialists, including finance and
accounting professionals. These lectures are integrated into
introductory training to enhance participants’
comprehension of the industry.
In addition to honing hard skills, we focus on nurturing soft
skills among our employees. We introduced an operational
management training course for line managers,
incorporating real-life case studies. Our commitment to
employee development extends to various programmes
and engagement initiatives, including our Talent Pool,
Best-in-Profession Competition and the Research and
Development Conference.
Mentoring and succession planning
We consistently invest in tools that empower our workforce
and promote internal mobility. Our Talent Pool, designed for
cultivating future leaders, serves as a crucial internal resource,
effectively meeting most of our staffing requirements. Any
eligible employee can apply for a position or express interest
in joining the Talent Pool. Various assessment methods,
including 360-degree evaluations, assessment centres and
competency-based interviews, are employed to groom
prospective leaders. Participants receive constructive
feedback and a personalised development plan. In 2023, the
Talent Pool consisted of 456 employees and 17% of them
gained a promotion (including 170 employees in Kazakhstan,
11% of whom were promoted in 2023). Our emphasis is on
building a pool of internal candidates for leadership roles in
engineering, construction, mine management and finance.
Planning for succession is equally critical for senior
management positions. We assist potential candidates for
these roles with a training programme that encompasses
operational and strategic management, critical thinking,
communications and change management.
As part of our commitment to transition from a traditional
‘top-down’ approach to talent development, we are
implementing a corporate mentorship programme. Similar
to the Talent Pool programme, it facilitates a more seamless
exchange of knowledge and expertise within the Company,
as mentees engage with their mentors to explore career
goals and strategies for achieving them.
1 Measured as average male wage minus average female wage divided by the average female wage.
47
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Sustainability continued
Promoting knowledge exchange
Facilitating knowledge sharing across the Group is crucial
for successful innovation implementation, requiring a shift in
mindset and active cross-functional collaboration. Our
ProgressorLAB initiative brings together talented and
creative people from our various sites, forming working
groups to collaboratively address challenges in geological
surveying, engineering, operational efficiency and data
analytics. At the end of 2023, 121 people Group-wide were
registered as participants in ProgressorLAB group projects
and 48 people as experts.
Every employee can utilise the corporate Knowledge Base,
housing insightful case studies of investment project
execution, industrial trial outcomes and optimal operational
efficiency solutions as proposed by fellow colleagues. This
collaborative knowledge exchange empowers employees
across the Group to address complex issues related to
mining, processing, safety and more.
Fostering a culture of healthy competition
Our Best-in-Profession Competition, ongoing since 2015,
engages around 1,000 employees annually. This
competition recognises the most skilled employees,
enhances motivation, facilitates the sharing of corporate
best practice and promotes working professions. In 2023,
1,400 employees and contractors’ workers Group-wide
participated in skills competitions.
The Best-in-Profession Competition assesses both
knowledge and practical skills, with a specific emphasis on
safety and environmental management. It aids in pinpointing
knowledge gaps and devising refresher training plans,
especially in terms of safety rules. Polymetal encourages
contractors to join skill competitions alongside Company
employees, offering them a chance to immerse themselves
in Polymetal’s safety culture.
To boost employee participation, we continually seek ways
to improve the Best-in-Profession Competition. For
example, competitions for geologists and surveyors now
include tasks performed using Datamine software.
Diversity and inclusion
We value diverse perspectives and backgrounds among our
employees, as outlined in our Diversity and Inclusion Policy.
Our hiring practices are free from discrimination based on
any grounds, be they gender, race, religion, disability or
political affiliation. When advertising a role and recruiting
candidates, assessors outline qualification requirements
and avoid any conscious or unconscious bias during the
interview process. Remuneration decisions are solely based
on competence for the role, irrespective of any other
attributes. We actively monitor and address discrimination-
related incidents through our feedback systems, such as
our Hotline, providing a platform for anonymous reporting
and resolution by the relevant department.
To address and eliminate workplace bias, promote diverse
teams and attract and retain people with varied
backgrounds, we have implemented a Diversity and
Inclusion Programme. This comprehensive initiative includes
training, engagement activities, diversity metrics and
targets, collaboration with educational institutions and
ongoing internal communication.
Gender equality
We track the percentage of women at each level, in key
departments and among the participants in development
programmes. The number of women employed Group-wide
in 2023 remained at 21% of the total workforce (2022: 21%)
and in Kazakhstan the number remained at 20%
(2022: 20%). We also track the gender pay gap, the number
of female applicants for our job vacancies, as well as female
representation in the Talent Pool and among participants of
the Research and Development Conference.
Our commitment to fostering equal access to technical
education, removing the barriers to career advancement
and championing women both within and beyond our
Group remains a constant. We actively encourage women
to join our industry and progress into leadership roles. This
encouragement takes the form of motivating online
workshops, networking opportunities with female leaders
from peer companies and participation in the cross-industry
competition: Talented Women Award. Held for the third
consecutive year in 2023, the competition attracted 450
applications from 57 companies within the mining,
manufacturing, chemical and oil and gas industries
(including 25 applications and four finalists from Polymetal).
Surveys among our employees have revealed that women
often face challenges in visualising their future career paths
and achievements, despite the high level of professionalism.
To address this, we promote the participation of our female
employees as lecturers at various conferences, thematic
forums and as guest lecturers in universities. In 2023, we
launched a dedicated section on female leadership within
our corporate informational portal in order to enhance
networking and educational opportunities.
We also work with universities and provide career guidance
in schools. We hold meetings with students who have
already begun to think about their futures and make a point
of inviting female Polymetal employees along to these, in
order to destroy existing gender stereotypes and inspire
girls to work within the mining industry.
Inclusive environment
We recognise that different types of physical and mental
disability require a tailored approach to hiring and it is our
responsibility to establish an inclusive environment for those
with special needs. As an employer of 74 people with
disabilities (including 23 people in Kazakhstan), we partner
with a specialised recruitment agency that connects
candidates with disabilities to employers offering accessible
work places, even in remote regions.
To assist colleagues in developing improved and more
efficient relationships with people with special physical or
mental needs, we have created an interactive online course
on inclusion practices. This course provides an informed
understanding of disability, highlighting the potential risks of
bias at work and has also been incorporated into the
induction programme for new employees.
Employee engagement at various management levels
• Direct Line
• Board site visits
Board of
Directors
Group
leadership
•
Employees survey
(every three years)
Direct Line (Group CEO)
•
• Hotline
• E-mail address
Communication
channels
•
Quarterly meetings with
workforce
• Dedicated walk-in sessions
•
Meetings with Young
Leaders and Talent Pool
participants
Site
management
Branch
managers
•
Regional universal
phone number
• Pulse survey
• Newspaper • Intranet • Information boards
• Brochures, posters, video • WhatsApp messenger, corporate e-mail • Meetings
Age diversity
At the end of 2023, our workforce included 17% of those
aged 50 and above (21% in Kazakhstan), who represent a
significant source of expertise and mentorship in many
areas. We provide flexible hours and remote work options
or transition them from physically demanding roles to those
focused on teaching and mentoring younger colleagues.
Additionally, our comprehensive corporate medical
insurance programme covers all employees, supporting
their health and well-being.
Communications and engagement
Our internal feedback system provides an avenue for
employees to express concerns, and we ensure a prompt
and confidential response. Employees have multiple
channels to send confidential feedback, including a
corporate Hotline (anonymous via telephone or email), a
messenger app or discussions with their managers. All
employees are informed about these channels during their
induction and information is easily accessible through
corporate media. In 2023, we received 2,244 enquiries to
these channels (including 332 enquiries from our employees
in Kazakhstan) covering topics such as living and working
conditions, social benefits and remuneration. Each enquiry
is thoroughly investigated and addressed accordingly.
Quarterly analysis of reported issues is conducted and
anonymised responses to common enquiries are shared
through our Company newsletter, corporate portal, info-
boards and meetings.
In 2023, we surveyed over 8,800 employees Group-wide
and conducted approximately 50 focus groups Group-wide
as part of our employee satisfaction survey. The objective is
to evaluate employee perceptions of our corporate culture,
utilising the findings to consistently enhance our workplaces
in alignment with our core values. Additionally, throughout
the year, we seek feedback from employees on various
matters, ranging from on-site living and leisure facilities to
new training programmes.
We utilise corporate volunteering as another tool to engage
employees and offer them opportunities to contribute
positively. The volunteering initiative has expanded to over
20 cities in our regions of operation, involving more than
3,000 Polymetal employees Group-wide in 2023.
To enhance the effectiveness of volunteering efforts, we
have established a Volunteer School to educate those
interested in the proper and efficient organisation and
participation in volunteering events. Our volunteers are
actively involved not only in projects initiated by the
Company, but also launch their own initiatives focusing on
positive social or environmental impacts.
Freedom of association
We recognise the right of our employees to join
organisations that advocate for and uphold their interests.
This encompasses the right to elect representatives in
accordance with the laws and practices of the countries
where we operate. In 2023, 77% of all employees and 100%
of operating site staff were covered by collective bargaining
agreements (in Kazakhstan, 91% and 100% respectively). At
each operating site, employees have established Workers’
Councils, with elected employee representatives serving on
the Commissions for Regulation of Social and Labour
Relations to facilitate discussion between employees and
Polymetal.
Headcount and turnover
In 2023, our average headcount decreased by 0.5% to
14,647 employees, including 3,202 employees in
Kazakhstan, with over half of them working on a fly-in/
fly-out basis at remote sites. The voluntary turnover rate
significantly decreased to 4.7% in 2023, compared with
8.4% in 2022; in Kazakhstan, this was 1.4% in 2023
compared with 4.6% in 2022. In 2024, we will continue to
develop digital systems that enable better tracking and
analysis of people-related metrics that would, in turn,
enable better decision-making about our HR policy.
48
49
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability continued
Environment
As caretakers of the lands under our temporary stewardship, we strive to take
every possible action to ensure the safety of the environment and local
communities, as well as the preservation of natural wealth for future
generations.
Assets in Kazakhstan at a glance
>90%
of water is reused or
recycled
8%
of mineral waste
reused and recycled
80%
of non-mineral waste
reused and recycled
Areas of focus
• Adhering to our goal of reducing and maintaining
fresh water withdrawals to the lowest possible level
• Analysing the potential for increasing the share of
waste reused/recycled
• Environmental impact monitoring across all sites with
the focus on efficient use of resources
• Eliminating adverse biodiversity impacts at each
stage of the life-of-mine.
Which guidelines do we follow?
External: UN Global Compact, ISO 14001, EBRD
Environmental and Social Policy, International Cyanide
Management Code, the Global Industry Standard on
Tailings Management, Responsible Gold Mining
Principles, World Bank Guidelines and Policies, Science
Based Targets for Nature, ICMM and IUCN guidelines.
Corporate: Code of Conduct, Environmental Policy,
Environmental Management System, Tailings and
Hydraulic Facilities Management Policy, Mine Closure
Policy.
Further information
Additional data is available in:
• Polymetal ESG datapack
• CDP Water Disclosure
50
Our approach
Recognising the unavoidable impact of the mining industry
on the environment, minimising our environmental footprint
is a key strategic objective. This commitment is realised
through diligent monitoring, optimal resource utilisation and
continuous innovation. The implementation of our
Environmental Policy is carried out on-site through the
Group-level Environmental Management System (EMS),
complemented by specific systems addressing cyanide,
tailings and mine closure management.
The EMS incorporates stringent controls to prevent water,
air and land contamination, noise pollution, as well as
mitigate adverse effects on biodiversity. The EMS enables
us to establish targets, continuously measure performance
and adhere to national legislation. Recognising that specific
environmental risks could impact the Company’s
operational outcomes and reputation, we have established
a comprehensive risk assessment system within our EMS.
Environmental management plans undergo annual review at
each operational site, emphasising preventive measures
over compensatory actions.
In light of the sanctions imposed on JSC Polymetal and its
Russian subsidiaries, in 2023, we made adjustments to our
EMS in Kazakhstan, refining our approaches and updating
the assessment of risks and key focus areas. All processes
related to the implementation of EMS at our facilities in
Kazakhstan were restructured and centralised under the
Board and the management of Polymetal International.
At the same time, the responsibility for the EMS at our
assets in Russia were delegated to the executives of
JSC Polymetal. On 7 March 2024, Polymetal International
completed the disposal of its Russian business.
In our role as long-term stewards of natural resources, we
are dedicated to minimising environmental risks throughout
every phase of a mine’s life cycle. During the design phase,
we meticulously consider all potential environmental issues
through a comprehensive multi-stakeholder process,
namely an Environmental Impact Assessment. While our
sites are operational, local environmental teams actively
monitor impacts and environmental compliance is regularly
scrutinised by governmental bodies, our internal audit
function and external experts. In preparation for mine
closure, we strategically plan rehabilitation activities to
guarantee that our infrastructure poses no harm to people
or the environment once the mine reaches the end of its
operational life.
We acknowledge the significance of environmental
awareness and feedback mechanisms. All stakeholders
have the opportunity to provide comments on our approach
or raise concerns or grievances formally and anonymously.
This can be done through various channels, such as public
hearings and direct contact. We systematically record all
feedback and take appropriate actions in response. In
2023, we received 14 enquiries related to our impact on the
environment (all of them about Russian assets), all of which
were resolved.
utility providers. In instances of last resort, we secure limited
quantities from rivers, dams and groundwater aquifers
through permits issued by local or state authorities.
Importantly, we abstain from drawing water from surface
sources in environmentally sensitive areas or where
ecological and biological services hold significant
importance for local or indigenous communities. Our water
usage is diligently tracked through meters or, when
necessary, estimated based on the operational time of
pumps.
Environmental requirements also apply to our contractors,
particularly those operating at our sites. Our contracts
include penalties for non-compliance, specifically
addressing issues such as pollution, packaging, noise and
emergency preparedness. We regularly conduct formal
assessments and audits of contracted suppliers to ensure
environmental compliance and adherence to best practice.
All contractors undergo an induction into our EMS and must
demonstrate responsible practices and a commitment to
continual improvement. In 2023, we carried out 252
environmental checks and 53 in-depth environmental audits
of our contractor organisations in Kazakhstan.
Water stewardship
Water plays a crucial role in our processing operations. Our
operational facilities are engineered and continuously
improved to minimise the extraction of fresh water and
guarantee the safe discharge of water.
The monitoring of both water quantity and quality is a key
focus within our EMS. Given the predicted physical impacts
of climate change on our operations, vigilance in monitoring
water risks is crucial for our assets in Kazakhstan. We strive
to continually enhance our water efficiency by employing
metering and auditing practices for water consumption,
coupled with the meticulous management of the quality of
wastewater. The majority of the water we use in ore
processing is circulated in closed water cycles. Some
operations necessitate obtaining additional water from local
Recognising water as a shared resource, our approach is
inherently community-centric. We acknowledge access to
safe and clean water as a fundamental human-rights
concern. In every operational region, we conduct
assessments of potential water risks, incorporating
feedback mechanisms that empower individuals to voice
concerns without fear of reprisal, ensuring a thorough
investigation of each raised issue.
We also collaborate with local government and community
organisations to contribute to long-term water security. This
involves funding infrastructure projects and providing
assistance in implementing initiatives significant to local
communities.
Environmental teams at operational sites, as part of our
EMS and Climate Management System, are responsible for
identifying and assessing water risks. For EMS risks, a
one-year time horizon is adopted, relying on historical data
related to incidents like pollution or water scarcity, as well as
plant technology data. Medium- and long-term risks, such
as flooding or changes in precipitation, are evaluated within
our Climate Management System, aligning with IPCC
climate change projections and the World Resources
Institute (WRI) Aqueduct tool, which assesses water-related
risks at the catchment level, identifying potential locations
facing water scarcity (further details are available in the
Climate & Energy chapter on page 58 and in our CDP Water
disclosure).
Bringing green ideas to life: the Varvara Spring restoration
We are consistently focused on raising the environmental
awareness of our employees and motivating them to
actively contribute to Polymetal’s sustainability goals. The
corporate Green Ideas Contest is one of the most
effective tools for engaging our workforce, allowing us to
identify and implement creative projects, which address
environmental challenges at our sites and in the regions
where we operate.
Last year, the winning project involved reclaiming a
natural spring area near the Varvara site, close to
Zhuravlevka village in Kazakhstan. This particular area
holds cultural and historical significance for the local
community and residents believe the water from this
spring possesses sacred qualities, granting strength and
vitality to those who drink it. The Varvara initiative group
put a great deal of effort into cleaning up the area
surrounding the spring: removing undergrowth,
enhancing access, upgrading roads, reconstructing water
pipes, building masonry structures and improving the
overall environment and water quality. In addition, we
teamed up with local residents, volunteers and
environmental activists to help clear up rubbish and
debris in the area.
We expect the project to be completed in 2024 and
anticipate that this location will become a new focal point
for the local community. We hope that this sets a positive
example for the stewardship of sustainable environmental
and water resources.
51
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability continued
Water stress risk: optimising fresh water use
According to the Aqueduct tool, approximately half of our
operational assets are situated in areas characterised with low
or low-to-medium water stress, while the remaining assets are
located in areas with high and medium-to-high water stress.
In our commitment to minimise the impact on water stress of
our operations and reduce our footprint on local ecosystems,
we actively decrease fresh water withdrawals. This is
achieved by employing a closed water cycle approach at
flotation plants and capturing wastewater that naturally
infiltrates our quarries as well as utilising rainwater for activities
like dust suppression through irrigation. Notably, 93% of our
on-site water consumption is sourced from a closed cycle of
treated wastewater. This closed water cycle model is
incorporated into the design of all new processing facilities.
In 2023, we remained committed to our ambitious goal of
reducing fresh water usage for processing per unit of
production by 55% by 2030, compared with the 2019
baseline. Thus, we manage to reduce our fresh water
intensity for ore processing by 53% Group-wide, compared
with 2019, to 125 m³/Kt (2022: 49%), including 47% decrease
in Kazakhstan (178 and 336 m³/Kt of processed ore in 2023
and 2019 respectively).
Water quality risk: vigilant monitoring and treatment
In addition to overseeing water usage, we take complete
responsibility for the effective treatment of water discharged
into local water bodies. The possibility of untreated water
discharge, stemming from factors like seasonal water
excess, heavy rainfall or damage to the waterproofing layer
in storage facilities, is carefully managed. To counteract this,
we consistently monitor the integrity of our facilities and
their water levels, promptly acquiring additional pumps if
necessary and updating emergency response plans as
needed (further details on tailings facilities safety can be
found on page 190).
With regard to water treatment, we rigorously ensure that all
discharge undergoes purification through mechanical,
physico-chemical and biological processes. Additionally, we
conduct thorough monitoring of the quality of water bodies
upstream and downstream to ensure zero contamination.
This monitoring involves laboratory testing for nitrites,
nitrates, ammonium, heavy metals, salts and cyanides.
Continuing to improve the quality of control over water
resources, in 2023 we installed an automated monitoring
system for the quality of quarry water at the Komar site,
which allows real-time monitoring of the concentration of
impurities in the discharged water.
Waste management
Waste material is an inherent byproduct of the mining
industry, which generates substantial amounts of mineral
waste, such as overburden rock and tailings, alongside
relatively smaller quantities of non-mineral and hazardous
substance waste. With a circular economy in mind, we are
dedicated to minimising material consumption, emphasising
the reuse and recycling of waste both on-site and off-site
through accredited organisations.
In 2023, the proportion of waste recycled decreased to 17%
compared with 23% in 2022 (8% and 10% in Kazakhstan,
respectively). For waste that cannot be reused or recycled,
we prioritise disposal methods that do not pose risks to the
ecosystem. Across all sites, formal measures are
implemented to ensure the environmentally safe disposal of
waste and these protocols are clearly communicated to
employees.
Tailings and overburden waste
More than 99% of our total waste Group-wide, by weight, is
comprised of mineral waste, including tailings and
overburden. This waste is stored at rock dumps and tailings
storage facilities (TSFs), which are composed of tailings
dams and dry stack facilities. Typically classified as
non-hazardous, overburden is either reused or disposed of
at our own sites. Meanwhile, TSFs serve as a source of
recycled water for processing and upon reaching capacity
limits, they undergo dehumidification and reclamation in
accordance with our Mine Closure Policy.
We operate two TSFs in Kazakhstan (a further five operating
TSFs, two TSFs undergoing closure and four dry storage
facilities are located at the Russian assets, which were
divested in March 2024). To minimise their environmental
impact, we use protective lining, drainage systems,
wastewater treatment plants and water collectors. Each
TSF undergoes rigorous daily monitoring and inspection,
including checks on pipelines, pump stations, water levels
Polymetal's water circle in 2023 (Group-wide data)
‘000 m³
FRESH WATER WITHDRAWN
3,282
OPERATIONS
Surface water
Ground water
Third-parties
816
1,573
893
Fresh water
Recycled water
Reused water
49,181
3,282
41,987
3,911
DISCHARGE
Watercourses
Sewage
Landscape
491
338
153
0
CONSUMPTION
6,818
WATER
REUSED &
RECYCLED
45,898
(93%)
treatment and reuse
treatment and discharge
to watercourses
6,302
OTHER WATER MANAGED
(drainage, quarry and mine water)
10,329
52
and dams. Management reviews their current state monthly,
while government agencies regularly assess compliance
with safety regulations. Our studies affirm that any
emergency failure at our dams would have no impact on
settlements, buildings, structures or facilities where
communities or employees may be present.
We are dedicated to ensuring that all our operations related
to TSFs comply with the Global Industry Standard on
Tailings Management (GISTM), and highly value the
initiatives of the Global Tailings Management Institute in
enhancing environmental sustainability and advocating for
best practice within the mining industry. In accordance with
the GISTM, we have implemented a Tailings and Hydraulic
Facilities Management Policy and appropriate internal
standards across all our facilities with TSFs, incorporating
the fundamental principles outlined by GISTM. Additionally,
we conduct annual reporting with detailed information on
the status of our TSFs, which is available on page 190 and
on our website.
To reduce mineral waste disposal, we employ internal
dumping, backfill overburden in developed chambers and
use it for the construction and maintenance of roads and
operating sites. The waste management programmes at our
facilities envision a systematic acceleration in the
implementation of this practice. For example, by 2027, over
30% of overburden at Varvara will be deposited in pit
internal dumps (approximately 1% in 2023). Similarly, at the
Kyzyl site, between 2024 and 2027, 5-7% of overburden will
be utilised for dam construction and road building.
In order to eliminate affecting both ground and surface water,
as well as the surrounding area, we have implemented dry
cake stacking technology at four assets in Russia and, by the
end of 2023, we stored 30% as dry cake and 70% in dams.
Following the divestment of Russian assets in March 2024,
we do not have any dry stacking facilities in operation and the
development strategy of our operating assets and new
projects in Kazakhstan do not currently include a transition to
dry tailings storage. However, we continually monitor the
safety of our TSFs and continue to introduce breakthrough
technologies to minimise potential environmental risks.
Non-mineral waste
We take extensive measures to recycle non-mineral waste,
including paper, plastic and metal, either at our own sites or
through accredited organisations. All our production sites
are equipped with recycling bins for separate waste
collection. In 2023, more than 65% of our non-mineral
waste was either recycled or reused (80% in Kazakhstan).
To minimise plastic waste, we now prioritise the reuse of
large bags for storing ore concentrate whenever possible.
Non-recyclable solid and industrial wastes are neutralised
and stored at our designated waste polygons or landfilled
by external companies. Environmental monitoring is
conducted at all our special waste polygons to assess the
quality of air, surface and ground waters, and soils.
At several of our facilities, we have also implemented pilot
projects for food waste recycling. The food waste is
transformed into an organic soil fertiliser, contributing to
land reclamation efforts. This initiative helps to advance a
circular economy, simultaneously lowering greenhouse gas
(GHG) emissions and mitigating air pollution originating from
solid waste dumps.
Cyanide management
The management of cyanide, utilised as a leaching agent in
the gold recovery process from ore, is subject to stringent
controls at every stage to safeguard our personnel and
prevent any release into the ecosystem. Our Cyanide
Management System ensures a uniform approach to cyanide
handling, covering aspects such as procurement,
transportation, storage, processing, decommissioning,
employee safety, emergency response, training and
stakeholder engagement. This system is currently
implemented across all operational sites where cyanide is
utilised.
Our methodology entails identifying all associated hazards,
maintaining strict control over cyanide levels in tailings,
collaborating with third-party cyanide producers and
transporters, and conducting comprehensive monitoring of
air, soil, surface and groundwater. We design, construct and
monitor tailings dams to prevent cyanide effluent and share
all relevant data with public authorities and other
stakeholders upon request.
Polymetal is a signatory of the Cyanide Management Code.
In Kazakhstan, our sole cyanide-related site, Varvara, is fully
certified both as a gold mining company and separately as a
cyanide transporter. In 2022, the site underwent an
independent audit for compliance with the Cyanide Code
and, in 2023, we updated the internal Standard for Cyanide
Management and provided training to the responsible
personnel at the site.
In Russia, Amursk POX and Voro were certified for
compliance with the Cyanide Code. However, as of the
beginning of 2024, the certificates for these facilities have
expired and, due to imposed sanctions, recertification audits
cannot be conducted. In 2023, all Group facilities in Russia,
which handled cyanide, adhered to the requirements of the
corporate Cyanide Management System, while oversight of
these matters was delegated to the executives of JSC
Polymetal, the holding company for the Group’s assets
located in Russia. Following the divestment of Russian assets
in March 2024, Varvara is Polymetal's only operating facility
using cyanide. The use of cyanide is also planned at the Ertis
POX, where, after commissioning, the Cyanide Management
System will also be introduced and the corresponding
certification for compliance with the Cyanide Code will be
completed.
Detailed information on the compliance status at our sites
with the Cyanide Code is available on the ICMI website.
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Sustainability continued
Environmental compliance
We continue to adhere strictly to all adopted voluntary and
mandatory environmental commitments, at both international
and national levels. In 2023, each of our operating sites in
Kazakhstan underwent certification of the updated EMS to
comply with ISO 14001 standard, ensuring that we maintain
adherence to this standard across all our operating sites.
At the national level, in 2023, our operating sites in
Kazakhstan underwent two environmental desk audits. All
identified minor non-compliances were resolved in
accordance with the regulator’s recommendations without
any fines or significant impact on the business.
Assets in Russia were also subject to environmental audits: in
2023, inspections took place at three sites where violations
related to wastewater treatment and environmental control
were identified, and the total amount of fines was $5,800.
The development of the mitigation plans for eliminating
violations and their implementation is under the control of the
management of JSC Polymetal and will continue in 2024.
Biodiversity and land
From the initiation of a mining project, we assess the
impacts on biodiversity through an Environmental Impact
Assessment, involving collaboration with environmental
organisations and local communities. Subsequently,
ongoing site-specific biodiversity monitoring is conducted,
encompassing studies of plant and animal life around our
mining sites in partnership with local biodiversity experts.
Alongside scientific monitoring, we have established a
framework for prompt reporting of biodiversity-related
incidents, with a specific focus on those resulting in harm to
or fatalities of wildlife.
Following the Science Based Targets for Nature Initial
Guidance for Business, we have recognised land use
change resulting from mining and related infrastructure as
the primary pressure on biodiversity, water bodies and
natural carbon sinks. The IUCN Guidelines for Planning and
Monitoring Corporate Biodiversity Performance have
assisted us in identifying priorities concerning protected
areas and species. Explore how we address biodiversity
impacts throughout all stages of the mine life cycle below.
Protected territories
It is imperative for all mining companies to refrain from
operating in areas of high biodiversity significance in order
to minimise their environmental footprint. Polymetal has
already implemented a no-go policy for World Heritage
Sites, Ramsar Sites and legally designated protected areas
and their adjacent territories. Our Committee for Ore
Reserves mandates that each new project assess its
proximity to and potential impact on protected areas before
making any investment decisions.
Protected species
The assessment of the impact on Red List species, habitats
and ecosystems is conducted as part of the Environmental
Impact Assessment at the start of each project. Once
operations commence, the mining site provides an annual
biodiversity report, detailing rare, protected and hunted
species identified at the site and adjacent territories. We
have implemented measures to safeguard species at our
sites, covering every phase from project exploration to site
closure.
During the exploration stage:
• using aerial photography and lighter drilling equipment to
minimise physical disruption of the land
• plugging drill holes to prevent the entrapment of small
mammals
• reclaiming trenches and roads that are no longer
required.
During the construction stage:
• permitting passage only on designated roads without
disturbing additional land.
During operations:
• installing animal deterrents at waste polygons, grid lines
and TSFs
• surrounding open-pits with waste rock walls to prevent
animals from falling in
• reducing light pollution by using downward-directed
lights to avoid confusion for birds in flight
• employing safe-and-clean technologies
• implementing dust suppression measures
• conducting a volunteer initiative to clean water protection
zones and coastal strips of local water bodies
• installing road signs to warn about wild animals both on
and outside the site in surrounding territories
• prohibiting fishing and hunting, and the gathering of Red
List plants by employees
• conducting education and engagement programmes for
employees and communities.
During the closure stage:
• rehabilitating the land by sowing and planting native
grasses and trees
• ensuring safety and stability of the structures.
Considering biodiversity at all life-of-mine stages
Exploration
Design and construction
Operation
Mine closure
Polymetal’s Committee for
Ore Reserves evaluates
biodiversity-related risks for
each potential site, including
proximity to protected areas
and migratory routes,
presence of protected
species and value for
Indigenous Minorities of the
North.
Environmental Impact
Assessment (EIA) is
developed in collaboration
with scientific organisations
in accordance with local
legislation, followed by public
hearings. EIA is part of the
design project, which is
approved by state authorities
to start construction.
Annual biodiversity
management plans specify
measures to mitigate the
impact and to improve
biodiversity monitoring.
Mine-closure plan ensures
the environmental safety of
mines, buildings, tailing
storage and other
infrastructure. Rehabilitation
solutions include soil
placement, planting and
offsetting aqua diversity.
54
Mine closure
After completing operations in a particular area, our
commitment is to undertake comprehensive land
rehabilitation, emphasising the repair of any environmental
damage caused by our activities. In 2023, no mines or
plants were closed; however, ongoing preparations for
end-of-mine scenarios were continued across all our sites.
Our primary objective is to minimise social and
environmental risks linked to closure or transfer to other
organisations for further use. This entails employing
technologies to assess and safeguard a site, along with
raising employee awareness about the significance of
responsible mine closure planning.
Reforestation
Forests play a crucial role in providing habitats and
sustenance for diverse species, maintaining the natural
water cycle and acting as a carbon capture and storage
system. Recognising the impact of mining on boreal zones
and the need for tree felling, Polymetal has formulated a
strategy to offset deforestation effects. We are committed
to planting native tree species within an area determined by
local regulations to minimise the potential negative impacts
of land disturbance.
In 2023, Group-wide we planted 430 thousand saplings of
pine, larch and cedar on almost 200 hectares in the regions
where we operate (in accordance with mandatory
reforestation requirements). During reforestation efforts, we
utilise saplings that are at least two years old and, for a
minimum of three years post-planting, we provide care to
ensure the healthy growth of the trees.
In addition, as part of our commitment to actively fostering a
favourable environment for all stakeholders in our operating
regions and taking initial steps towards implementing a Net
Positive Impact approach, we are undertaking a voluntary
pilot project to plant a new forest not far from Varvara site in
Kazakhstan. Upon successful implementation of the trial
plantings, similar projects could be initiated at other
Polymetal sites in Kazakhstan.
Air emissions
Many of our primary activities result in the emission of
nitrogen, sulfur oxides and inorganic dust. Our
environmental teams conduct ongoing monitoring of these
gases and particulates to ensure adherence to high
air-quality standards.
To mitigate the impact of our operations on air quality, we
implement measures such as irrigation, dust separation and
shield technologies. Across our vehicle and mining
equipment fleet, we enforce compliance with quality
standards and utilise advanced technologies. Our boiler
houses and processing plants are also equipped with
industrial air filters designed to remove particles and gases
from the air. We also employ heat recovery technology to
utilise wasted heat from diesel generators, thereby reducing
emissions stemming from fuels. For further details on
energy efficiency, please refer to page 186.
Implementing Net Positive Impact
approach
At Polymetal, we believe that thoughtful and responsible
use of natural resources goes beyond merely meeting
the requirements for mandatory environmental
protection. Which is why we put significant effort into
voluntary projects aimed at supporting and enhancing
natural resources in the regions where we operate.
Aligning with our commitment to create a positive impact
on biodiversity, we are taking the first steps towards
implementing a Net Positive Impact strategy by
launching a voluntary pilot initiative to establish a new
forest near the Varvara site in Kazakhstan.
The project involves planting a new forest covering an
area of up to 1,500 ha. In 2023, we conducted extensive
analysis of national and international legislation for
forestry projects. In close collaboration with the
authorities in the Kostanay region, we selected initial
areas for trial afforestation. The chosen land parcels
were not used by the local communities or for
agricultural purposes, have minimal existing trees and
vegetation, and have undergone all necessary soil quality
and afforestation suitability studies.
The planting of the first trees is scheduled for spring
2024 with local nurseries providing saplings that are
well-adapted to local soil and climate conditions. Initially,
deciduous trees and shrubs will be planted and, as they
grow, they will help improve soil quality and create more
favourable conditions for future plantings. In the second
stage, new saplings of coniferous trees will be added to
the already established trees, gradually forming a new
sustainable ecosystem in the forested area.
In developing the project, we are following international
standards and methodologies, and putting the project
forward for inclusion in the national registry of climate
projects in Kazakhstan. The carbon offsets generated
will be verified and utilised to partially offset the direct
GHG emissions from our sites in the region.
Following on from the successful planting at Varvara, we
will look at identifying additional land plots in the region,
with the aim of creating a network of green areas that
contribute to biodiversity, prevent land erosion, stabilise
the local water balance and provide residents with
spaces for recreation.
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability continued
Climate and energy
Addressing global climate change demands enhanced resilience and foresight.
This entails innovating extraction methods to reduce greenhouse gas (GHG)
emissions and optimising energy balance.
Group-wide performance at a glance
24%
share of heat
utilisation systems in
total heat consumption
15%
decrease in GHG
emissions intensity
compared with 2019
26%
share of renewable
electricity in total
electricity
consumption
Areas of focus
• Adhering to our current decarbonisation trajectory
aiming to reduce absolute GHG emissions in line
with the goals of the Paris Agreement
• Updating the Climate Strategy for assets in
Kazakhstan given the changes in Group structure
• Ensuring the timely and proper implementation of
projects for the construction of solar and gas power
plants at Varvara and Kyzyl.
Which guidelines do we follow?
External: The Paris Agreement, TCFD, GHG Protocol,
Science Based Targets initiative, ISO 14001, ISO 50001,
EBRD Environmental and Social Policy, Responsible
Gold Mining Principles, World Bank Guidelines and
Policies.
Corporate: Climate Policy, Climate Management
System, Environmental Policy, Environmental
Management System, Energy Policy.
Further information
Additional data is available in:
• Polymetal ESG datapack
• CDP Climate Disclosure
• Sustainalytics Low Carbon Transition Rating
56
Our approach
Climate change calls for global action to minimise the
human impact on the climate and to accelerate the
transition to a low-carbon economy. We support the
initiatives from countries that joined the Paris Agreement to
reduce GHG emissions and are building a climate resilient
strategy for the long-term horizon.
Accepting the need to take urgent action to mitigate
human-made impacts on the climate, we are committed to
reducing our own impact and developing an approach to
potential carbon neutrality. Our strategy is focused on those
projects that comprehensively reduce our GHG emissions
and on net impact on water resources and biodiversity.
Building long-term resilience is our strategic priority. By
introducing cutting-edge technologies, adapting to climate
risks and gradually reducing our carbon footprint, we both
mitigate our impact on the environment and improve our
resilience to the threats of climate change. In 2023, we
adhered to our climate targets of reducing our direct and
energy-related emissions, and we are gradually adapting
our Climate Action Plan to the new circumstances and
changes in Group structure. In our Climate Strategy, we
give unconditional priority to real decarbonisation projects
and state that offsetting is reserved only for hard-to-abate
or residual emissions. Aiming to maximise the
decarbonisation potential of our assets in Kazakhstan, we
are currently focusing our efforts on designing new solar
power plants with a total capacity of up to 40 MW at
Varvara and Kyzyl, as well as an afforestation project in the
Kostanay region (read more on pages 60-61).
The changes that are taking place require us to assess and
monitor climate-related risks and opportunities thoroughly.
Our approach to risk analysis includes both qualitative and
financial assessment of climate risks and opportunities in
different horizons and climatic scenarios, and is integrated
into our Risk Management System. In 2023, we adjusted
our Climate Management System in Kazakhstan, revised
our assessment approaches and updated the assessment
of the climate-related risks and opportunities.
To achieve the transition to a low-carbon economy, we
collaborate with and encourage our partners, contractors
and suppliers to apply the same standards to reduce their
carbon footprint as we do.
Through our Climate Action Plan and assessment of climate
risks and opportunities, we are progressing with robustness
and confidence.
The Polymetal Climate Strategy
We adapt our strategy to climate change challenges by
employing advanced technologies and continually
improving operational performance. Acknowledging the
significant impact of climate change and the volatility of
climate factors, we identify, assess and manage climate
risks and opportunities on an ongoing basis.
Our corporate Climate Management System (CMS) and
Corporate Standard for assessing climate risks and
opportunities establish a mandatory assessment of climate
risks and opportunities for all of our existing sites and
development projects. We consider physical and transitional
climate risks, as well as climatic opportunities, across three
time horizons (short-term is up to one year, medium-term
between one and five years ahead and long-term over the
entire life cycle). We conduct scenario analysis for three
climate scenarios, based on the Intergovernmental Panel on
Climate Change (IPCC) and International Energy Agency (IEA)
scenario models (read more in our CDP Climate disclosure).
Climate-related trends – and the risks and opportunities
identified as arising from them – inform our Climate Strategy
and Action Plan. This is coordinated by the Corporate Task
Force on Climate Change and reviewed by the Safety and
Sustainability Committee and the Audit and Risk Committee.
Our Climate Strategy is aligned with the goals of the Paris
Agreement, aiming to limit the rise in global average
temperature to below 2°C above pre-industrial levels¹. At the
same time, understanding the severity of climate change,
we are looking for ways to increase the ambition of our
Climate Strategy and move to a 1.5°C trajectory.
Polymetal will finance projects that support low-carbon and
climate change-resilient growth, as well as waste efficiency
and improved water management. The primary targets are
climate impact mitigation, such as increased energy
efficiency and use of renewable energy, as well as
environmental impact reduction, such as reduced waste
and emissions. Read more about our key climate projects
on pages 60-61.
Climate governance
Delivering on our strategic sustainability and climate
objectives requires leadership from the very top of the
organisation. Our approach is therefore overseen by the
Board and Board-level Committees, with our Group CEO
having ultimate accountability. During the year, our Board
conducted several climate performance reviews, tracked
our progress towards climate goals and discussed the
potential for achieving carbon neutrality.
The Safety and Sustainability Committee has a mandate to
provide support to the Board on the Group’s safety record,
sustainability performance and ethical conduct. The
Committee monitors and reviews risks and opportunities
related to climate change and oversees our approach and
the implementation of short- and long-term Climate
Strategy. Climate change is a Board-level standing agenda
item and, in 2023, among issues covered were the Group
Climate Strategy in Kazakhstan, environmental and
climate-related KPI, performance against targets,
decarbonisation potential and key climate projects.
Climate change, as one of our key strategic issues, falls
under the executive responsibility of the Group CEO, who is
both a member of the Board and of the Sustainability
Committee. In 2023, the weighting of environmental and
climate goals in the Group CEO’s KPI was 12% (10% in
2022). For 2023, the Group achieved the climate
component of the KPI: reducing the intensity of GHG
emissions by 15% compared with 2019, against a target of
12%.
The development and implementation of climate-related
strategy approaches and measures are the responsibility of
the Corporate Task Force on Climate Change (Task Force).
The Task Force is an advisory body that oversees the
identification, assessment and monitoring of climate risks
and opportunities, as well as the implementation of climate
goals and the calculation of metrics against them. The Task
Force reports annually to the Group CEO on climate risks
and opportunities, and also updates the Board and its
Committees on a regular basis.
Polymetal's energy flow in 2023 (Group-wide data)
Other
Coal
Natural gas
Primary energy
consumption
10,748 TJ
Heat generation
Heat generation
Transport and
mobile
machinery
Final energy
consumption
9,672 TJ
Heat consumption
Heat utilisation
Diesel
Mobile fleet
Electricity
generation
Non-renewable
electricity
Green & clean
electricity
Purchased electricity
Polymetal’s RES
Electricity consumption
Non-renewable
self-generation
Non-renewable grid
Green & clean grid
Solar & wind power
GHG emissions
1,087 Kt CO₂e
Scope 1
724 Кt CO₂e
Scope 2
363 Кt CO₂e
Avoided emissions
202 Кt CO₂e
1 According to the recent Sustainalytics Low Carbon Transition Rating, Polymetal’s Climate Strategy is aligned with 1.9°C trajectory, ranking 4th globally among 58
ranked companies within the Gold subindustry.
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability continued
Climate risk management
Risk identification approach
The process of identification and materiality assessment of
climate-related risks and opportunities has been driven by
our CMS, which specifies scenario analysis parameters and
assessment methodology in detail. This bottom-up process
involves site management teams, corporate-level
management, the Group CEO and Board, and is controlled
by the Task Force.¹
Asset-level climate risk assessment is the responsibility of
each site’s production department, which identifies and
assesses physical risks. The assessment process involves
functional and operational managers and technical
specialists. A scenario analysis of the identified significant
climate risks is carried out, taking into account asset-
specific historical climate data and predictive climate
models. As a result, an estimate of the likelihood of these
risks is obtained to assess potential damage. The financial
assessment of the risks includes damage from possible
destruction, environmental damage and fines, as well as
damage from potential downtime. Medium- and high-level
risks are recognised as material at asset level and a
mitigation plan is developed. The results of the scenario
analysis of physical risks, action plans and risk monitoring
reports are submitted by the site management team to the
Task Force.
Transitional risk assessment is carried out at corporate
level.² Responsibility for identifying and assessing these
risks is the remit of relevant representatives of corporate
management. The distribution of responsibility is also
embedded in the CMS. Scenario analysis and financial
assessment of transitional risks is carried out according to a
similar methodology with physical risks. The results of the
assessment are also reported to the Task Force.
The Task Force shares this data with the Corporate Risk
Management team and with the Group CEO, Board of
Directors and Board Committees at least once a year.
Risks of a high or extreme level (in the medium-term horizon
of the Paris Agreement scenario) fall under review of the
Task Force and Audit and Risk Committee, following which
they may be included in the list of principal risks (read more
on pages 68-84).
Key climate risk mitigation
In 2023, the Board and Group management focused on risk
mitigation and the adaptation of Polymetal’s assets in
Kazakhstan. We revised and adjusted our corporate
standard on climate risk assessment, updated the scenario
analysis and identified key material risks for each Kazakh
asset. Meanwhile, given the sanctions imposed against JSC
Polymetal and its Russian subsidiaries, the oversight of the
implementation of climate-related risks and action plans at
our assets in Russia was delegated to the executives of
JSC Polymetal.
The results identified all material climate risks as low or
medium. When updating and integrating assessments into
our risk management system, climate risk was retained
among emerging risks (read the Risk management overview
on pages 83-84).
As of the end of 2023 and in the short term, the current
impact of climate-related issues on the financial position of
the Company, based on the target scenario, is assessed as
insignificant and does not exceed 1% of Adjusted EBITDA .
The key physical risks for Polymetal in Kazakhstan
associated with heat or cold waves, hurricanes and water
scarcity, as well as the transitional risks associated with
national and international carbon regulation, are the most
likely to increase in the long term. We are particularly
attentive to these risks and, to address them, we have
adopted a comprehensive Climate Action Plan covering all
our assets in Kazakhstan (read more on pages 60-61).
While evaluating the potential impact of climate change on
the Group, we also consider the impact on our supply chain.
Thus, the climate risks affecting our transport infrastructure
and logistics are included in the risk registers of each of the
assets. Such risks include potential disruptions in the supply
of goods, materials and equipment due to climatic factors,
damage to critical transport infrastructure, bad shipping
conditions etc. To address these risks, and avoid downtime
due to potential delays or supply disruptions, there is a
reserve stock of goods, materials and spare parts at all our
assets. In addition, our Procurement Policy includes
procedures that eliminate dependence on a single supplier
and guarantee the stability of supply even if climate risks
materialise at one of our suppliers.
Key climate risks for the assets in Kazakhstan
Physical risks
Transitional risks
4
3
1
2
5
6
7
8 9
Likelihood, %
Risk impact to
Adjusted EBITDA², %
Likelihood, %
Risk impact to
Adjusted EBITDA², %
1 Shifts in precipitation patterns
2 Change in hydrological cycles
3 Hurricanes
4 Cold waves
5 Draughts and temperature rises
6 National carbon regulation
7 Cross-border carbon tax
8 Implementation of environmental
insurance
9 Increase in the cost of carbon-
intensive resources
Risk level
Low
High
Medium
Extreme
Metrics and targets
All of our climate-related metrics and targets cascade
throughout our corporate governance framework and are
closely linked to our climate actions and risk mitigation
efforts. Reducing operational GHG emissions is our key
climate indicator and performance against this target is
reflected in senior executive remuneration as a
decarbonisation component of the ESG KPI for the Group
CEO (read more on page 111).
Our current climate-related target is to reduce GHG
emission intensity per ounce of gold equivalent by 30% by
2030 and to reduce absolute GHG emissions by 35% by
2030 (both covering Scopes 1 and 2, 2019 baseline). These
targets were developed and set in 2020-2021 and reflect
our efforts to align our Climate Strategy with the goals of the
Paris Agreement. But, with the Group restructuring
following the divestment of JSC Polymetal and its
subsidiaries in Russia in March 2024 and global concerns
over insufficient efforts worldwide to limit climate change,
we plan to update our Climate Strategy in 2024-2025. The
revised Group strategy for combating climate change will
focus on Kazakhstan, paying particular attention to
geographical, climatic and legislative specifics. We also
intend to increase the ambition of our goals, align
decarbonisation plans with the 1.5°C trajectory and
supplement our long-term strategy with a detailed plan for
achieving carbon neutrality.
In 2023, we reduced our Group-wide emission intensity by
15% compared with 2019. Our 2023 Scope 1 absolute
emissions Group-wide decreased by 4% compared with
2022, mainly due to the implementation of energy efficiency
measures. At the same time, Scope 2 absolute emissions
Group-wide increased by 10% due to legislative changes in
the energy market of Kazakhstan and the resulting lack of
opportunity to purchase green electricity from the grid.
Upstream and downstream GHG emissions (Scope 3) are
not as yet included in our current targets. As part of our
efforts to influence our supply chain and accelerate
achieving the global goals of the Paris Agreement, we have
already requested our key contractors and consumables
suppliers to provide carbon data so that we can further
widen Scope 3 reporting across the most material supply
chain categories and encourage our partners to manage
their own emissions properly.
We had planned to set a Scope 3 target and develop a
net-zero approach by the end of 2023, but unfortunately
significant changes in business strategy and external
conditions during the year prevented us from completing
this work. We now plan to finalise this work and publish our
long-term climate targets in 2024-2025, following the Group
restructuring in March 2024.
Since the issues of energy efficiency and stability of clean
electricity supply require serious analysis and must be
tailored to the specifics of each asset, these goals and
related KPIs are cascaded to the heads of the main
operational units and their deputies. They are set annually
as part of the corporate Remuneration Policy for each
asset and division, taking into account current production
targets, quality of raw materials, the capabilities of energy
suppliers and many other factors. In 2024, the main KPIs
in the field of energy management will be focused on
energy efficiency, providing access to green and clean
electricity and implementing projects for the development
of our own renewable energy sources.
GHG intensity Group-wide dynamics
Scope 1 + Scope 2 emissions intensity (kg CO₂e per GE oz)
Baseline
-2%
-9%
-15%
-15%
742
730
677
629
634
2019
2020
2021
2022
2023
GHG intensity⁵
GHG emissions budget (according to 2030 decarbonisation target)
Intensity of avoided emissions⁶
Dynamics, % (y-o-2019)
Climate and environment are complex multi-factorial systems
and each aspect of our activity has a direct or indirect impact
on them. Given that environment and climate change are
intrinsically linked, the issues of water and waste
management also need to be considered as climate metrics.
We pay special attention to water risks, the safety of tailings
and reducing our impact on the ecosystems of the regions
where we operate. You can read more about our
approaches, policies, goals and relevant metrics in the field
of water and waste management on pages 50-55.
Our major green initiatives relate to reducing our carbon
footprint and improving energy efficiency by renewable
energy consumption (both grid and self-generated) and
switching to an electrified or combined gas-diesel fleet. Our
Climate Action Plan in Kazakhstan includes projects for the
construction of solar and gas piston power plants, an
afforestation project and modernisation of the fleet to reduce
diesel fuel consumption (read more on pages 60-61).
In 2024, we plan to continue improving the management of
climate projects and adjust our internal data management
system for current and projected climate actions and
mitigation measures, as well as increasing the transparency
of the Company’s financial climate-related metrics.
1 From May 2023, all procedures related to climate risks and opportunities management at the Group level do not apply to JSC Polymetal, the holding company for
the Group’s assets located in the Russian Federation, and its subsidiaries (the Group’s Russian subsidiaries) since the management of the Russian operations were
delegated to the executives of JSC Polymetal. The Group’s Russian subsidiaries were ring-fenced to ensure sanctions compliance, as JSC Polymetal was added to
the Specially Designated Nationals and Blocked Persons List by the US Department of State. Since then, Polymetal International plc has not supervised the
decision-making process of the Group’s Russian subsidiaries, including any policy implementation. On 7 March 2024, Polymetal International completed the
disposal of its Russian business.
2 Residual climate risk assessment applicable only to Polymetal’s assets in Kazakhstan.
3 Residual material climate risks in Paris Agreement Scenario and medium-term horizon
4 The financial assessment of the risks includes damage from possible destruction, environmental damage and fines, as well as damage from potential downtime,
and is expressed as a ratio to the Company’s annual Adjusted EBITDA.
5 2022 GHG emission intensity has been restated due to changes in GE production accounting methodology (see page 173).
6 Emissions avoided through clean and green energy purchases, renewable energy generation and heat recovery.
58
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Country focus: KAZAKHSTAN
Operating for 15 years in Kazakhstan and with Central Asia now our strategic
hub, we acknowledge our role in the sustainable development of the region.
Collaborating with our team, partners, suppliers and local communities,
we vigorously strive to combat climate change and foster long-term prosperity
for us all.
Assets in Kazakhstan at a glance
460
scope 1 and 2 GHG
emissions (Kt CO₂e)
947
scope 1 and 2
GHG intensity (Kg of
CO2e per oz of GE)
3,542
total energy
consumption (TJ)
7,296
energy intensity
GJ per Koz of GE
8%
share of renewables
in electricity
consumption
$78m
green capital
expenditure
in Kazakhstan
for 2024-2027
Our strategy priorities
• Managing our operational footprint by:
– timely and high-quality implementation of our
projects for constructing solar and gas-fired
power plants
– close interaction with regulators in the energy
industry to develop the green grid electricity
market
Our climate strategy in Kazakhstan
In Kazakhstan, we operate in three different regions,
Kostanay, Abay and Pavlodar, where our new development
project Ertis POX is located. Each of these areas has its
own weather-specific microclimate. To take account of the
climate features and the intensity of climate change in every
region of our operations, we have selected sets of
meteorological data for each asset, using information from
the national meteorological service Kazhydromet.
Using this data, we have developed climate profiles for each
asset, covering the frequency and severity of extreme
natural events, including trends and climate change over the
past 20 years. These, together with global IPCC research
and SSP models, give us the means to accurately assess
the potential climate change and possible risks for each
asset, significantly increasing the Group’s resilience to
climate change.
Given that Kazakhstan aims to become carbon neutral by
2060 and adopted its decarbonisation strategy in 2023, the
emerging mechanisms for national carbon adjustment are
key significant transitional risks. Our GHG emissions,
whether Scopes 1, 2 or 3, are not currently subject to
national carbon taxes or quotas. The first taxes and
mandatory quotas for the most carbon-intensive industries
may be introduced in Kazakhstan as early as 2025-2026,
with all large industrial enterprises covered by 2030.
Our main tools for mitigating climate risk are transparency in
our climate disclosure, assessing and managing physical
risks, as well as adherence to carbon targets and reducing
our impact on the environment. By reducing our emissions
and introducing a Climate Action Plan, we mitigate our
impact and enhance our resilience to these risks.
The basic foundations of our Climate Action Plan remain
unchanged:
• Transition to low-carbon technologies and grid
– modernisation of the mobile fleet to reduce diesel
connection
fuel consumption
• Developing a long-term Climate Strategy, including
an approach to achieving carbon neutrality
• Developing Scope 3 targets and collaborating with
our value chain on decarbonisation and climate
management
• Transparent approach to climate governance and
public disclosure taking into account the interests of
all our stakeholders.
• Develop our own renewables in the regions where we
are present (where possible) and ensure efficient
generation of electricity
• Switch to electricity supplies with the lowest available
carbon footprint
• Modernisation of our mobile fleet, including electrification
and switching to gas-diesel equipment
• Continuous work to improve the energy efficiency of all
our processes.
Our Climate Action Plan
Varvara hub 216 GHG emissions
(Scope 1+2), kt CO₂e
Kyzyl
244 GHG emissions
(Scope 1+2), kt CO₂e
Ertis POX
Varvara hub
Renewable self-generation:
• 23 MW solar power plant (projected, 2025)
Transition fuels implementation:
• Up to 40 MW gas power plant (projected, 2025–2026)
Fleet electrification:
• Three electro-hydraulic excavators (operating)
• Electric ore-transportation system (trial operation)
Grid decarbonisation:
• The potential share of green electricity (hydro) in the
regional grid is around 10% (currently not available for
direct purchase due to legislative obstacles)
Nature-based projects:
• Afforestation project covering an area of up to
1,500 ha (under development, 2023-2027)
Kyzyl
Renewable self-generation:
• 17 MW solar power plant (projected, 2026)
Transition fuels implementation:
• Conversion of a coal boiler house to natural gas
(preliminary assessment of decarbonisation potential)
Fleet electrification and modernisation:
• Six electro-hydraulic excavators (operating)
• 30 gas-diesel trucks by 2025 (replacing diesel ones)
Grid decarbonisation:
• The potential share of green electricity (hydro) in the
regional grid is around 30% (currently not available for
direct purchase due to legislative obstacles)
• In the future, a substantial part of the electricity could
potentially come from Varvara gas-power plant,
replacing grid electricity from coal-fired generation
Total decarbonisation potential:
Up to 60% by 2030 (compared with 2023)
Total decarbonisation potential:
Up to 30% by 2030 (compared with 2023)
In 2023, we adjusted the sequence in which we implement
our green projects and are now focused on those in
Kazakhstan with the highest efficiency and availability of
technologies and equipment. In 2024, we plan to continue
implementing our medium-term mitigation plan and to put
together a detailed, long-term corporate Climate Strategy
for the period after 2030.
Looking ahead, climate change remains a source of risk but
also opportunity. The energy transition and development of
renewable energy sources bring decarbonisation potential,
as well as opening up prospects for non-ferrous metals
markets (namely in technology sectors). We are, therefore,
continually expanding the resource base of our operating
projects, along with considering new projects for the
development of copper deposits. Our copper reserves and
resources in Kazakhstan are concentrated in Varvara hub
and the Baksy property (in which Polymetal increased its
interest to 75% in 2023). In the long term, we expect a
significant increase in demand for this metal to underpin
capacities of renewable energy sources and energy storage
systems, and are reviewing options for expanding our
copper production.
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability continued
Communities
Our social licence commits to delivering substantial economic and social value
to local communities. We prioritise fostering reliable partnerships with
stakeholders to guarantee favourable outcomes and minimise social risks.
Assets in Kazakhstan at a glance
3
new partnership
agreements on
socioeconomic
development
$7.3m
of social investments
335
community enquiries
received and resolved
Areas of focus
• Ensure zero community conflicts
• Ensure positive engagement
• Maintain the level of financial giving
Which guidelines do we follow?
External: UN Global Compact, Universal Declaration of
Human Rights, UN Guiding Principles on Business and
Human Rights, UK Corporate Governance Code, EITI,
International Labour Organization Conventions, UK
Modern Slavery Act, Responsible Gold Mining
Principles, World Bank Guidelines and Policies.
Corporate: Code of Conduct, Supplier Code of
Conduct, Anti-Bribery Policy, Human Rights Policy,
Social Investment and Donation Policy, Community
Engagement Policy, Group Tax Strategy.
Further information
Additional data is available in:
• Polymetal ESG datapack
62
Our approach
Supporting local communities is a vital aspect of our
corporate social responsibility. We contribute to the
progress of neighbouring communities through
socioeconomic partnerships, taxes and job opportunities.
Continuous and thorough engagement with stakeholders is
crucial for maintaining our social licence to operate.
Our Social Investment and Donation Policy is designed to
enhance living standards for local residents and foster
regional economic development. It articulates our
transparent approach to community investment, detailing
monitoring procedures and stakeholder engagement.
Our Communities Engagement Policy ensures the
promotion of open dialogue and empowerment at every site
and project. It outlines how we identify stakeholders and
establish effective feedback mechanisms.
The Polymetal Board of Directors and management team
conduct annual assessments of targets related to
community relations. We employ a dedicated Social Impact
Assessment Tool to robustly monitor the outcomes of our
community investments.
Engagement
Our diverse engagement channels enable ongoing dialogue
with communities, allowing us to comprehend their needs
and strategically plan for social projects based on
stakeholders demands. We maintain a formal feedback
mechanism with a guarantee to provide a detailed response
to all questions or concerns within 14 days. As well as
telephone and email channels, we conduct regular public
hearings, site visits and working groups.
In 2023, 1,195 people Group-wide participated in our
community polls and Group-wide we held 41 meetings,
22 site visits and 25 public hearings. Overall in 2023, we
received 780 community enquiries (including 335 in
Kazakhstan), most of them related to financial aid,
improvements to local educational facilities and
infrastructure development.
We establish our relationships with local communities in line
with the principles of international law and national legislation,
including human rights law, and place special emphasis on
the rights of indigenous communities. Our broader corporate
feedback mechanisms are designed to pay attention to
enquiries from locals and to provide timely answers. As a
result, in 2023, we successfully avoided conflicts related to
lands and objects of historical or cultural significance for local
and indigenous communities Group-wide.
While our operations in Kazakhstan do not impact the
territories of indigenous peoples, we prioritise the well-being of
those resident in our operational regions and support social
infrastructure, providing opportunities for comfortable living,
education and employment. In Russia, we have established
strong relationships with representatives of indigenous
communities, associations and reindeer-herding teams,
implementing programmes focused on preserving culture,
language and traditional lifestyles. In 2023, due to sanctions
imposed on JSC Polymetal and its Russian subsidiaries, all
functions related to monitoring and developing our
engagement programmes with indigenous communities were
transferred to the management of JSC Polymetal, which
continues to adhere to all previously adopted corporate social
policies and standards. On 7 March 2024, Polymetal
International completed the disposal of its Russian business.
Social investments and impact assessment
We contribute to enhancing the living conditions in
communities through long-term social partnership
agreements with local authorities (39 such agreements
were active in 2023, including 3 new and 3 ongoing
agreements in Kazakhstan), and direct funding for impactful
social projects. Our investments Group-wide, totalling
$17.6 million in 2023, including $7.3 million in Kazakhstan,
prioritised key areas based on stakeholder input. Strategic
allocations focus on healthcare and active living, education,
infrastructure, culture and support for local communities.
We deploy our Social Impact Assessment Tool to analyse
the outcomes of our social projects. Education is a core
social investment area for the Company. Therefore, we
regularly assess our key educational projects, which include
renovating and equipping educational facilities, long-term
education support programmes, career awareness projects
for high school students and grants for senior school
students in Kazakhstan. In 2023, more than 1,195
stakeholders from local communities Group-wide took part
in a survey and expert interviews, with the outcomes of our
social projects scoring highly. In addition, we received many
comments and suggestions on how we can further support
education in the host regions. The assessment results and
feedback from communities will help optimise Polymetal’s
social investment strategy.
Corporate volunteering
As a Company, we not only invest financially in social projects
within our operational regions but also promote employee
contribution to community well-being through diverse
volunteering programmes. In 2023, our employees volunteered
for more than 50 causes, giving their time to social and
environmental campaigns in Kazakhstan and Russia.
Group-wide community enquiries by topic
(% of total enquiries)
28
27
9
780
enquiries received
and responded
(2022: 839)
7
8
7
8
1
2
2
2
Charity and targeted financial assistance
Sport and sports events
Culture and community events
Infrastructure
Education
Job opportunities
Environmental education
Culture and traditions of indigenous minorities
Environmental impact
Healthcare
Other¹
1
Includes other requests for financial and in-kind help.
Our annual charity project Mandarin helped make New Year
wishes come true for children from single-parent or
vulnerable families and elderly people. Before the start of
the new school year, employees donated school supplies
for children from socially and economically disadvantaged
families and supplies for people in nursing homes. In
addition to charity projects, our employees have an option
to donate blood or to support the National Bone Marrow
Registry.
We also continued to support environmental campaigns,
including collecting batteries for recycling and voluntarily
cleaning local parks and river banks. When organising
volunteering events, we often partner with specialised
non-profit organisations to make sure that our employees’
donations go to those in need.
Group-wide community investment by area
(% of total spend)
16
3 3 2
5
$17.6m
invested in social
projects
(2022: $23m)
24
47
Infrastructure
Sport
Education
Culture
Indigenous Minorities of the North
Charitable donations
Healthcare
Local employment and skills development
Wherever we operate, we strive to provide local people with
job opportunities. This not only brings more targeted
economic value, but it also strengthens our own workforce
capacity in local priorities, cultures and ecosystems, while
reducing the financial and environmental impact of fly-in/
fly-out employment. In 2023, our local employment rate was
97% (for both Kazakhstan and Russia).
We collaborate with local colleges and institutions, providing
training, development and further employment opportunities
in our communities. Working with universities, we are
shaping joint educational programmes to equip students for
the evolving mining industry. Besides working with higher
educational institutions, we raise career awareness among
local high school students. We hold events in settlements
located in our host regions, where future school graduates
learn about the Company, its production operations and
in-demand mining jobs, as well as about the labour market
in general. Our goal is to interest young people in working
for Polymetal and to provide information to those who want
to join our team in future.
We go above and beyond standard career guidance
meetings and organise tours for high school students
around our production sites, when we talk about the
technologies we use, arrange special quests and quizzes as
well as science competitions. This all goes in hand with
investing in school renovations, equipment and
modernisation of science laboratories and classrooms.
Career guidance is a particularly rewarding area of
volunteering. In 2023, more than 100 employees Group-
wide participated in our projects tutoring students who are
considering a career in the mining industry. Our employees
were involved in preparing study plans, talking about
in-demand careers in the mining industry, sharing their own
career experiences and answering student questions to help
them choose a future career.
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Sustainability continued
Sustainability continued
Ethical business
Upholding ethical and responsible conduct across all organisational levels is
integral to our business strategy. We adhere to all relevant regulations and
industry best practice, setting the same standard for our business partners.
Our approach
We are committed to conducting business ethically and
responsibly and expect the same from those who work with
us. Our zero-tolerance approach towards all kinds of bribery
or fraud is essential for the sustained success of our
business and communities. In addition to adhering to all
applicable laws and regulations in the countries where we
operate, we comply with relevant international regulations
and implement worldwide best practice in our corporate
policies and standards.
The Code of Conduct (the Code) is fundamental to upholding
the highest business standards and integrity for all our
stakeholders. It communicates our core values and ethical
principles, emphasising our zero-tolerance stance on
conflicts of interest, bribery, bullying, consumption of alcohol
or drugs, and misuse of confidential and insider information,
as well as other matters of corporate behaviour. Approved by
the Board of Directors, the Code undergoes regular review
by the appropriate Board Committee, according to its remit,
with ongoing monitoring by executives and internal audit
functions.
All employees are required to acknowledge that they have
read and understood the Code and to agree to comply with
it. We prioritise awareness through training initiatives,
covering human rights, diversity and inclusion, and in 2023
we provided appropriate training to our employees. The
Code is also supported by our policies, which cover a broad
range of issues, including the Supplier Code of Conduct and
Anti-Bribery and Corruption policies, Whistleblowing Policy
and others. These are all available on the Company’s
website.
The Company may not make any donation to a political party
or other political organisation, or to an independent election
candidate, or incur any political expenditure, unless such
donation or expenditure is authorised by an ordinary
resolution of shareholders passed before the donation is
made or the expenditure incurred. No such donations were
made in 2023 (2022: none).
Assets in Kazakhstan at a glance
$197m
taxes paid
38%
local procurement
Areas of focus
• Zero-tolerance position in respect of conflicts of
interest, bribery, slavery and human trafficking
• The implementation of our Code of Conduct and
other policies is regularly monitored by relevant
executives and our internal audit function
• Suppliers due diligence and engagement on ESG
issues
• Responsible tax policy in compliance with national
regulations and international guidelines.
Which guidelines do we follow?
External: UN Global Compact, ISO 14001, Universal
Declaration of Human Rights, UN Guiding Principles on
Business and Human Rights, UK Corporate
Governance Code, EITI, International Labour
Organisation Conventions, UK Modern Slavery Act,
Responsible Gold Mining Principles, OECD and national
tax guidelines.
Corporate: Code of Conduct, Supplier Code of
Conduct, Procurement Policy, Anti-Bribery Policy,
Policy on Disciplinary Action for Violation of Anti-Bribery
and Corruption Procedures, Policy on use of agents,
representatives, intermediaries and contractors’ due
diligence, Fair Competition and Anti-Trust Policy, Gifts
and Entertainment Policy, Whistleblowing Policy.
64
Anti-bribery and corruption
Bribery is a criminal offence in the countries in which the
Group operates and poses legal and reputational risks. Our
Anti-Bribery and Corruption Policy is universally applied,
covering all of the Group’s business dealings in all countries
and territories in which the Group operates. Applicable to
Directors, managers and all employees of the Group, as well
as relevant business partners and other relevant individuals
and entities, the Policy strictly prohibits the payment, offer or
authorisation of bribes, the receipt or acceptance of a bribe
or the payment, offer or promise to pay any facilitating
payments and other corruption-related activities. The Board
maintains a zero-tolerance approach, actively preventing and
addressing any acts of bribery and corruption by any of the
Group’s employees or by business partners working on the
Group’s behalf. Regular reviews of all our policies and
procedures on the prevention of bribery and corruption by
the Audit and Risk Committee ensure the effectiveness of
anti-bribery measures.
To align with international anti-corruption standards, our
Group maintains a robust Whistleblowing Policy, enabling
confidential reporting of concerns related to improprieties or
illegal activities and ensuring that arrangements are in place
for the independent investigation of such matters. This policy
ensures independent investigations into reported matters,
and retaliation against whistleblowers is strictly prohibited.
Biannual reports to the Audit and Risk Committee detail
policy implementation and any instances of corruption or
unethical conduct. No employee has been denied access to
the Committee and protective measures are in place for
whistleblowers against adverse personnel actions.
Our dedicated confidential Hotline, with details available on
the corporate website, facilitates anonymous reporting of any
violations of applicable laws and regulations. Each report is
thoroughly investigated on a confidential basis and without
bias. Best efforts are used to uphold anonymity if requested
by a whistleblower. In 2023, we received 102 reports
Group-wide to our dedicated confidential Hotline: 17 were
validated after a full investigation (including four in
Kazakhstan); all others were found to be either lacking
evidence or unrelated to business ethics. To enhance
awareness of bribery and corruption risks and the Code
principles, in 2023, we delivered a series of seminars to
high-risk groups of employees and contractors.
In the last year, we identified 10 corruption-related instances
(including three in Kazakhstan), with no impact on our
financial position or operations and no involvement of public
or government entities. No court cases relating to corruption
were brought against Polymetal or any of its employees.
In response to confirmed cases of corruption and violations
of the Code of Conduct, we took appropriate measures to
prevent the recurrence of such incidents. This included the
dismissal of culpable employees and the conduct of
additional seminars to reinforce the understanding among
employees of the inadmissibility of such actions.
Supply chain stewardship
As a business, we engage with over 5,000 suppliers
Group-wide, spanning a diverse range of products and
services. We actively promote adherence to our stringent
sustainability standards among these supply chain partners.
Our Supplier Code of Conduct outlines the sustainability and
ethical standards we expect suppliers to uphold, covering
areas such as safety, labour relations and broader
considerations of social, environmental and ethical risks.
Ensuring supplier familiarity with the Supplier Code is a
priority for us. In 2022-2023, we faced geopolitical and
logistical challenges, prompting a thorough review of
potential suppliers for our Russian assets. This was
undertaken to ensure operational continuity and foster
enduring partnerships. Read more about how we manage
supply chain risks on page 73.
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Sustainability continued
Supplier due diligence
Our partners are chosen through an open tender process
and our e-procurement system plays a pivotal role in
upholding our Procurement Policy by uniformly applying
standards across a wide array of contractors. We employ
standardised scorecards in the assessment of suppliers to
ensure objectivity and fairness. Our due diligence process
includes:
• Security screening of new and existing suppliers using
open sources and conducted by our legal and security
services. Suppliers are checked on any controversies,
including human trafficking, delays in paying salaries,
legal proceedings and community issues. We also
request references from the suppliers’ customers. We
check our current suppliers at least twice a year.
• Applying the dedicated database at registration to
assess accountability based on 40 factors, including a
Consolidated Risk Indicator, Due Diligence Index,
Financial Risk Index and Payment Index.
• A pre-qualification check before an open tender involving
a questionnaire that includes information on staff
qualifications, regions where the business has a
presence and financial capabilities. Only those that have
prequalified are allowed to participate in our open
tenders.
• Selective site visits ensuring appropriate production
processes and labour conditions.
In addition to the obligatory checks, we actively communicate
our ESG policies and expectations to suppliers. They may be
requested to complete an online self-assessment
questionnaire addressing their management of ESG issues,
including but not limited to climate change, equal pay, health
and safety and community relations. This information aids us
in incorporating broader ESG considerations when choosing
new partners. Our human rights and diversity training
materials are available for suppliers as well.
Local procurement
Sourcing products and services locally not only provides
substantial socio-economic advantages to nearby
communities, but also reduces our own carbon footprint and
transportation expenses, while enhancing operational
resilience, especially in remote locations. In 2023, 36% of our
Group-wide procurement was regional and it was 38% in
Kazakhstan. We have incorporated a location criterion into
the list of potential suppliers for our sites, prioritising the
purchase of locally manufactured goods and aiming to
increase the share of regional procurement.
Human rights
We uphold the rights of all our stakeholders through our
commitment to aligning with the universal principles of
human rights and our obligations as a corporate citizen.
Polymetal adheres to the guidelines set out in the Universal
Declaration of Human Rights, UN Global Compact, ILO
Declaration, Responsible Gold Mining Principles and national
labour codes. In compliance with the UK Modern Slavery Act
2015, we publish our Modern Slavery Act Transparency
Statement annually and outline our steps to protect human
rights in our business and supply chains. Particular emphasis
is placed on regions where we exist side-by-side with
indigenous communities and, in the last year, there were no
conflicts related to lands or objects that present historical or
cultural value for indigenous communities.
In all operational regions, we appoint qualified personnel for
internal and external communications on human rights
issues, ensuring transparent grievance mechanisms for all
our stakeholders. In our recent human rights risk
assessment, none of the risks identified were high or
extreme, with the majority showing as low across the Group.
Having identified issues relating to insufficient awareness of
our corporate diversity and inclusion policies, we have
developed a dedicated course on the inclusion of people with
special physical needs. We also updated our online course
on human rights to include more practical case studies. Both
courses are now included in the induction training package
for new employees and are also available to representatives
of contracting organisations.
Responsible tax policy
Through paying and reporting taxes, we strive to maintain a
transparent and responsible attitude towards our social
responsibility. Total tax payments in 2023 amounted to $390
million, 51% of which was paid in Kazakhstan (2022: $385
million), and are disclosed in detail in our website’s Disclosure
centre. Following the re-domiciliation in August 2023, the
Company is subject to the Kazakh tax regime, although AIFC
offers some tax benefits versus the general tax code for
Kazakhstan registered companies.
Our responsible approach to tax is reflected in the Group Tax
Strategy and is aimed at insuring we pay all taxes required in
a timely manner. Our Tax Strategy is designed to maintain the
highest standards of compliance with the requirements of
applicable tax laws, treaties, regulations and other tax
guidance, while providing adequate controls over tax
accounting and tax reporting. The Tax Strategy has been
approved by the Polymetal Board of Directors. The Audit and
Risk Committee oversees the Group’s compliance with the
principles of the Tax Strategy. The Tax Strategy is subject to
regular review by the Committee to ensure that it remains
appropriate and consistent with applicable standards and
practices, and to recommend any changes it considers
desirable for Board approval.
We operate our Tax Strategy in line with our overall business
strategy and approach to corporate governance, ethics and
risk management.
The scope of the Group’s Tax Strategy did not extend to JSC
Polymetal and its subsidiaries on the basis that their entire
decision-making process was conducted by the
management of JSC Polymetal due to sanctions. Such
subsidiary undertakings had been ring-fenced as part of the
Group’s response to the designation of JSC Polymetal by the
US Department of State. Polymetal International plc had
therefore no oversight over such decision-making process,
including implementation of policies and procedures.
In March 2024, following shareholder approval and
satisfaction of other conditions precedent, the sale of 100%
of the share capital of JSC Polymetal to JSC Mangazeya Plus
was completed. The divestment is not subject to an ‘exit tax’,
given the Company’s re-domiciliation to Kazakhstan in
August 2023.
Material tax topic
Approach
Our Tax Strategy is implemented using specific approaches
and measures adopted and developed by the Group. These
comprise proactive identification, prevention and mitigation of
potential risks and lead to accuracy and timeliness in fulfilling
our tax obligations. Internal and external audits are effective
in ensuring that the Group is able to achieve these goals.
Open ongoing communication with the tax authorities also
acts as a valuable source of information to the prompt
identification of and response to potential risks. We apply the
following approaches and measures to ensure that we
maintain the highest standards of responsible taxation and
tax governance:
Organisation of
controls
Rigorous tax accounting and reporting processes and controls are implemented to ensure our objectives are met.
All material operations are subject to review and approval process from multiple levels of expertise within the
Group companies, with supplementary advice from external advisors where deemed necessary.
Controls and processes are subject to regular reviews by our internal audit department and are considered by
AO Business Solutions and Technologies (previously AO Deloitte & Touche CIS) as part of their statutory audit.
Based on the results of such reviews, tax controls may be subject to change in order to improve efficiency as
required.
Each applicable change in the tax law or court practice is tested from the perspective of new controls requirement
and the Group reacts correspondingly.
The Group’s personnel responsible for tax matters are provided with access to various internal and external
trainings and seminars in order to improve their tax expertise and skills.
Tax planning
The Group does not operate in tax haven jurisdictions or utilise aggressive tax planning. We make sure that our
tax payouts are consistent with genuine commercial activity and that they comply with the laws and regulations of
the jurisdictions in which we operate and are consistent with our business strategy.
Approach to tax
risk management
The approach of the Group is to interpret the tax legislation consistent with both the spirit and intention of the law.
The Group is continuously monitoring its tax strategies and tax structures to comply with the new landscape created
by base erosion and profit shifting (BEPS) initiatives, ongoing changes in Kazakhstan tax legislation and the evolving
practice of its application in courts. The Group regularly evaluates its material tax positions, which are also subject to
review by the external auditor, to ensure these are adequately reflected in the consolidated financial statements. The
Group engages, when necessary, external advisors to help deal with uncertain tax positions, manage the risk and
ensure that the Group meets its tax obligations.
Intra-Group
transactions
All material intra-Group transactions are subject to transfer pricing control. Our transfer pricing methodology is
compliant with OECD and local country guidelines. The Group updates this methodology annually with the
assistance of external advisors to ensure that transactions between Group companies are conducted at an arm’s
length basis.
Tax incentives
Relationships
with tax
authorities
and other
stakeholders
The main goal of our controls is to ensure that income is taxed in and benefits the economy of jurisdiction in which
it arises.
We would typically make use of tax incentives and exemptions where they are intentionally provided by law. To the
extent the Group obtains an incentive, it complies fully with the requirements of such incentives (including, for
example, the amount of investments into the project).
The Group’s approach is to promote transparent relationships with the tax authorities, and to maintain open
communication with all relevant tax authorities to ensure that all information reporting required by applicable laws is
available on a timely basis.
The Group is an active member of industry associations aimed at contributing to an open and constructive dialogue
with government bodies. This enables Group tax executives to be close to changing tax trends.
Any queries regarding taxes from the stakeholders are welcome through the contact details on Polymetal’s official
website.
A dedicated confidential Hotline, with details available on the website (email or phone – toll-free in Kazakhstan), allows
anyone to anonymously report any concerns about the organisation’s integrity in relation to tax.
All questions and reports are thoroughly analysed and followed up.
Our tax transparency assists us in building trust and strong relationships with the local communities in the regions
where we operate.
Transparency and
disclosures
The tax transparency landscape has continued to develop in recent years, with new disclosure requirements
implemented, including country-by-country reporting, GRI 207 and DAC-6. The Group is compliant with all
mandatory disclosures. Where necessary, we engage external advisors to ensure the Group’s reporting is
sufficient and is compliant with global and local best practice.
66
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Managing risks effectively
The Company’s approach to risk management is also
embedded in our corporate culture. The need for a
proactive approach towards risks within day-to-day
operations is essential for safeguarding delivery on our
strategic objectives. The risk awareness culture
complements the rigorous risk management processes and
procedures.
We continuously monitor and refine our risk management
practices and internal control systems to meet the changing
requirements of the business. These systems incorporate
Corporate Governance Principles set out in the AIFC Market
Rules, international best practice, including adjustments to
the UK Code 2018, and comply with the COSO ERM 2017
framework. Our compliance controls are aimed at
minimising risks and preventing legal non-compliance. They
are also aligned with Polymetal’s Code of Conduct.
Due to the designation of JSC Polymetal and its
subsidiaries by the US Department of State, the
Company now reports and only carries out risk
assessment in relation to Group assets located in
Kazakhstan. JSC Polymetal and its subsidiaries are
no longer included in the risk assessment scope,
other than in respect of risks related to their impact
on our operations in Kazakhstan.
Our approach
Meticulous risk management is a vital component of our
overall business model, helping Polymetal minimise the
risks for all its stakeholders while delivering on its strategic
objectives and creating sustainable value. We constantly
monitor macroeconomic and market volatilities, production
risks, environmental issues, the geopolitical situation and
local regulatory developments in order to assess the impact
on our risk profile, and we have appropriate risk mitigation
strategies and preventive controls in place.
Risk management framework
Governance
and oversight at
corporate level
n
w
o
d
p
o
T
The Board
• Is responsible for the Group’s overall approach to risk management and internal control
• Sets the tone on risk aware culture
• Defines risk appetite and approves risk management policies and related internal controls
• Carries out a robust assessment of the Group’s emerging and principal risks
• Monitors the Group’s risk management and internal control systems and reviews their effectiveness
• Ensures sound internal and external information and communication processes.
Assist the
Board by
monitoring
principal risks
and procedures
The Board Committees
• The Audit and Risk Committee reviews the adequacy and effectiveness of the Group’s internal control and risk
management processes, considers the policies and overall process for identifying and assessing business
risks and managing their impact on the Group, develops and oversees implementation of risk management
strategies and makes recommendations to the Board
Implementing
the Board’s
policies on risk
management
and internal
control
Support and
assurance
• The Safety and Sustainability Committee measures the impact of the Company’s initiatives and relevant
exposures, and liaises with the Audit and Risk Committee in monitoring sustainability risks.
` Further information on the Board and its Committees is given in the Governance section on pages 86-117.
Executive management
• Maintains risk appetite and risk management within its remit, including monitoring principal risks
• Ensures internal responsibilities and accountabilities are clearly established, understood and embedded at all
levels of the Group to provide risk-aware decision-making
• Ensures risk-based planning and monitoring
• Is responsible for decisions on and implementation of the risk response.
Functional and operational managers
• Have overall responsibility for leading and supporting risk management within their business activities, escalating
issues when appropriate
• Have direct responsibility for the risk management processes, including relevant mitigation activities and monitoring.
Risk and compliance function
• Promotes risk management and related controls integration within the Group’s day-to-day business processes
• Facilitates the development of a risk-aware culture
• Coordinates and supports Group-level risk management activity and reporting
• Maintains and regularly updates the Group’s principal risks register
• Regularly reports to the Audit and Risk Committee and, as appropriate, to the Board.
Internal audit function
• Provides independent and objective assurance of the effectiveness of the risk management framework
• Monitors the risk management process and mitigation tools and actions
• Plans and executes assurance activities to ensure that there are policies and procedures in place to support
the effectiveness of the Group’s internal control system and maintains the Risk Assurance Map
• Regularly reports to the Audit and Risk Committee and, as appropriate, to the Board.
` Further information on the internal audit function is given on pages 96-97.
p
u
m
o
t
t
o
B
68
Risk management process
Governance and culture
We have focused on maintaining a robust risk awareness culture
to promote effective risk management across all business units.
The Group’s operating structure is consistent with the nature,
size and geographic spread of the business.
It ensures management’s responsibility for the development
and implementation of risk management practices and
risk-aware decision-making by all business units within the
Group and facilitates effective risk management in achieving
the Group’s strategy and business objectives.
Strategy and objective-setting
The risk management framework is geared towards successful
and sustainable achievement of the Group’s strategic objectives.
The Group’s strategy is risk-based and the risk management
framework is aligned with our values, business goals and
objectives. Risk assessment forms an integral part of
management and planning for the whole Group.
Risk appetite, risk tolerance and key risk indicators
The risk appetite is defined as the nature and extent of risk the
Group is willing to accept in relation to the pursuit of its objectives.
The risk appetite of the Group is considered in relation to the
principal risks and their impact on the ability to meet strategic
objectives. The Board assesses the risk appetite, which is set to
balance opportunities for business development and growth in
principal areas, whilst maintaining the Group’s reputation and
taking into account stakeholders’ interests.
Risk analysis and management
We identify and assess risks at the earliest possible stage and
implement an appropriate risk response and internal controls in
advance. Our risk management procedures are designed to
delegate the responsibility for risk identification while avoiding gaps
and duplications. They are embedded into accounting and
documentation systems to identify potential risk triggers.
Risk identification comprises not only single, mutually exclusive
risks, but also multiple, linked and correlated risks. Once identified,
potential risk factors are assessed to consider quantitative and
qualitative impacts, and the likelihood of an event (see the chart on
page 58). Together these create a risk profile.
When the appropriate ranking has been identified, a response to
each risk is developed and implemented, with responsibilities and
timelines are assigned.
Management assesses the effects of a risk’s likelihood and impact,
as well as the costs and benefits of possible mitigating actions to
bring the risk within acceptable tolerance levels. Risk matrices and
assurance maps are used to record, prioritise and track each risk
through the risk management process. Risk owners take
responsibility for risks, including controlling or mitigating them at all
levels and across individual business units.
The Board periodically revises the Group’s risk appetite and risk
tolerance levels of principal risks, based on the Group’s external
and internal context analysis. The Group has a zero-tolerance
approach to the following risks: fatalities; corruption; disclosure
of commercial secrets; accidents at construction; severe
violation of human rights and freedoms. In addition, Polymetal
International commits to zero-tolerance of breaching applicable
sanctions.
We implement key risk indicators (KRIs) for the Group’s principal
risks, which assist in identifying whether it is operating within or
outside its risk appetite. KRIs set the control values and provide
the data for proactive monitoring of the Group’s risk
performance. Deviation may signal risk realisation and identify
whether further action is required.
The Board carries out a robust assessment of the Group’s
principal risks, evaluating the potential impact on our business
model, operations, performance, stakeholders, our values and
solvency or liquidity. There is a particular focus on environmental
and social impacts within the communities where we operate
that is regularly discussed at joint meetings of the Audit and Risk
and Safety and Sustainability Committees to ensure that our risk
management processes cover all aspects of safety and
sustainability. The Audit and Risk Committee also reviews the
Group’s overall risk profile three times a year.
When identifying and assessing risks, the Group also draws up
a watch list of emerging risks, whose potential impact is not clear
at the present time. Emerging risks are properly identified and
monitored within the risk management process. The Board and
management review emerging risks as appropriate and at least
annually.
` To read more about emerging risks, see pages 83-84.
Review and revision
Risk review and monitoring is performed at all stages of the risk
analysis and risk management process and contributes to
ensuring that the Group identifies and assesses changes that
may substantially affect its strategy and business objectives.
This subsequently identifies new risks and applies necessary
and timely measures, while at the same time evaluating the
effectiveness of existing risk analysis and risk management
processes. The internal audit function provides independent and
objective assurance of the effectiveness of the risk management
framework and monitors risk mitigation actions.
Communication and reporting
Ongoing risk communication and reporting processes are
embedded in Polymetal’s business operations. Risk analysis
outcomes are generated and distributed, as appropriate. Risk and
internal control reports are regularly reviewed by the Audit and Risk
Committee. Relevant risk-related issues are also discussed by other
Board Committees and at Board meetings. Various communication
channels are implemented and used within and outside the Group
to obtain and share appropriate information flows from both internal
and external sources on a continuous basis.
Risk and compliance and internal audit functions provide
appropriate support and consultation on risk management
issues. Appropriate induction and ongoing training is also
provided to encourage desired behaviours and responsible risk
taking, as well as enhancing risk-awareness in required areas.
Training is tailored as appropriate for the role, responsibilities,
location and risks of the individual employee or executive
manager.
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Risk management continued
2023 developments and overview of principal risks
The risk overview below shows the residual level to which the Company is exposed once
preventive controls and mitigation measures have been applied to the principal risks.
Risk overview
Cybersecurity
risk
peration al ris k s
O
Construction and
development
risks
Exploration
risk
Production
risk
Supply
chain risk
Political
risk
Market risk
S
u
s
t
a
i
n
a
b
il
i
t
y
r
i
s
k
s
Environmental
risk
Health and
safety risk
Human
capital risk
Resource
nationalism
P
o
l
i
t
i
c
a
l
a
n
d
r
e
g
u
la
t
o
ry risks
Taxation
risk
Legal and
compliance
risk
Currency
risk
Liquidity
risk
Fin a n cial risks
Climate
change
Approach to risk assessment
Principal risks
• Could seriously affect and prevent the Group from delivering its strategic objectives
• Oversight by the Board and Board’s Committees
• Owned by the Executive Management
• Assessed and monitored at Group level
• Identified and assessed through applying impact and likelihood a 5x5 scoring scale based on the financial
indicators (% Adjusted EBITDA) and non-financial consequences (safety, environmental, regulatory and
reputational) along with the likelihood criteria (from rare to almost certain)
• Defined risk appetite and tolerance vary depending on the risk type
• Risk response and mitigating controls are subject to internal audit review and monitoring
Functional and operational risks
• Owned by functional and operational management
• Assessed and monitored at the level of business unit, site or function. Escalated to the Executive Management
where appropriate
Refocusing risk assessment on Kazakhstan
On 7 March 2024, Polymetal International completed the
disposal of its Russian business in order to both enable
appropriate valuation of the Company’s Kazakhstan assets
and ensure de-risking and de-leveraging of the Group’s
operations in Kazakhstan.
During 2023, neither the Company, nor its subsidiaries or
affiliates were designated as sanctions targets of the UK, EU
or US, with the exception solely of the Company’s Russian
subsidiaries, which were targeted by US blocking sanctions.
Given the sanctions imposed against JSC Polymetal and its
Russian subsidiaries, in 2023, the Board focused on the
strategic development and adaptation of the Kazakhstan
segment of the Group.
Therefore, the Company now reports and carries out risk
assessment only in relation to the Group's assets located in
Kazakhstan. JSC Polymetal and its subsidiaries are no longer
included in the risk assessment scope. For more details, see
the political risk and legal and compliance risk description on
pages 78-79.
Operational risks
1 Production
2 Construction and
development
3 Supply chain
4 Exploration
Sustainability risks
5 Health and safety
6 Environmental
7 Human capital
` Read more on the next pages.
Political and regulatory risk
8 Legal and compliance
9 Political
10 Taxation
Current emerging risks
Climate change
Resource nationalism
Cybersecurity
Financial risks
11 Market
12 Currency
13 Liquidity
2023 – No change
2023 – Decreased
New principal risk
2023 – Increased
Emerging risks
Some evidence
of risk realisation
Strong evidence
of risk realisation
Low risk
Medium risk
High risk
Extreme risk
70
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Risk management continued
Principal risks and uncertainties
The Group’s principal risks and related preventive controls and
mitigation strategies are set out below. Principal risks and risk
factors are assessed by the Board based on a detailed
understanding of the Company, its markets and the legal,
social, political, economic, technological, environmental and
cultural environments in which we operate, including a robust
consideration of the likelihood of the occurrence and potential
consequences of risk events.
In 2023, we validated the continued importance of our
13 principal risks.
The principal risks are those that we believe could seriously
affect and prevent the Group from delivering its strategic
objectives. A number of principal risks, such as risks related to
the operation of tailings storage facilities and risks related to
slope wall failure could have dramatic consequences for the
Group’s prospects. Nevertheless, these risks are highly
unlikely. We treat these risks with the highest priority and focus
on the development and implementation of relevant preventive
controls and measures to mitigate the inherent level of these
risks when ensuring the Company’s viability. Appropriate
criteria have been included to the incentive metrics of our
Remuneration Policy. To read more about ESG metrics,
see page 111.
Risk key
Risk level
Risk exposure trend
Link to strategy
Low
Medium
High
Extreme
2023 – No change
New principal risk
2023 – Increased
2023 – Decreased
Focus on Kazakhstan and selected
Central Asian countries
Strong cash flow generation
and a strong balance sheet
Best practice in corporate governance
and sustainable development
Growth in chosen jurisdictions
The order in which the risks are presented is not relevant to their significance.
Risk level:
Risk exposure trend:
Link to strategy:
Principal areas of focus in 2023
In 2023, the Company was able to ensure stable
work at all mines across the portfolio and met its
production guidance. The mining and processing
volumes increased throughout the year to align with
Kyzyl concentrator capacity extension to 2.4 Mtpa.
Despite the difficulties caused by technical
problems at Varvara and deformation
manifestations in the open-pit at Kyzyl, appropriate
on-time controls were taken at each of the
operations, avoiding disruptions and maintaining
production rates.
Operational risks
1. Production risk
Risk description and potential
effect
The key risks that may adversely
affect the Group’s ability to deliver
on its production plans are:
• Stability of open-pits and
underground mines
• Complex geotechnical
conditions
• Lack of quality ore feed for
•
processing plants
Inability to achieve planned
recoveries
• Lack of design and permit
documentation
• Reduced volumes of concentrate
sales (for detailed data on this
risk see page 20).
Other risks include:
• The failure of our contractors to
meet required performance and
deadlines, as well as to provide
sufficient quality of works
• Lack of key materials
• The failure of the supply chain to
procure complex logistics to
remote locations.
Preventive control and mitigation
We continuously monitor the progress of
our production plans, identify and assess
relevant production risks at our
operations, develop and implement risk
management measures in a timely
manner, specifically:
• Proven procedures to develop and
approve mining plans
• Continuous tracking of key materials,
monitoring and prompt analysis of how
our contractors complete their tasks,
as well as proactively developing
alternative options
• Geomechanical surveys for open-pit
and pit-wall stability, monitoring of
pit-wall stability with the use of an
automated system and prompt wall
stabilisation
• Flood management measures to
prevent spring floods
• Detailed geomechanical modelling to
process data on grade control and
production drilling
• Monthly mine-to-model reconciliations
to achieve higher grades and minimise
dilution losses
• Geotechnical mapping based on
results of exploration, grade control
sampling and in-fill drilling
• Lab tests to optimise ore and
concentrate processing parameters.
2. Construction and development risks
Risk level:
Risk exposure trend:
Risk description and potential
effect
Inability to achieve target return on
capital for large investment projects,
such as building new mines and
processing facilities or extension/
refurbishment of existing operating
mines, due to:
• Capital expenditure overruns
and failure to meet construction
deadlines (including due to
changes in macroeconomic
conditions)
•
• Delay in commissioning
• Failure to comply with design
solutions during construction
Inability to achieve design
parameters
Inability to perform construction
works or to commission a
construction object.
•
Link to strategy:
Principal areas of focus in 2023
In 2023, risk exposure was lower because project
implementation in Kazakhstan is not affected by
sanctions restrictions. Changes in external and
internal macroeconomic conditions can still
negatively impact approved construction budgets
and construction schedules, but effective and
well-established controls mitigate against this.
Ertis POX has been relocated to Kazakhstan to
fully sever the link between the Company’s
subsidiaries in Kazakhstan and those in the
Russian Federation. Initial investments in the
project were made in 2023 and the Company is
now evaluating options to accelerate the
construction and commissioning of the Ertis POX.
Preventive control and mitigation
Approval of investment projects is subject to
materiality criteria, including mandatory
approval by the Board, which ensures that
potential new assets fit the Company’s
strategic goals. The Company uses global
best practice in project management.
Project Committees, including the Company
executive team, make key financial,
technological and organisational decisions
when considering new projects. The Board
regularly reviews progress on key projects,
including completion scorecards and key
project milestones and risks.
Cross-functional project teams include a
range of specialists. This enables us to
apply accumulated collective experience in
exploration, design and commissioning of
mining and processing operations. Our
engineering professionals supervise full
observance of design parameters during
construction. The Company has a proven
procedure for obtaining permitting
documents. To ensure the resilient
performance of the engineering teams,
Polymetal implements a professional
assessment, development and motivation
programme.
JORC-compliant Ore Reserves estimates
for new development assets are assured by
external experts and validate all critical
feasibility study assumptions.
3. Supply chain risk
Risk description and potential
effect
Supply change failure could
adversely affect the Company’s
business processes. In view of the
macroeconomic context and
industry-wide uncertainty,
maintaining resilient supply chains is
a vital component in ensuring the
Company’s sustainable
performance. Supply chain risk also
correlates with principal risks such
as market, construction and
development, production, political
and with emerging climate change
risk. Disruption or restrictions to
supply chain operations could
negatively impact operational
procurement, concentrate
transportation and planned delivery
of construction and development
projects.
Risk level:
Risk exposure trend:
Link to strategy:
Principal areas of focus in 2023
In 2023, the Company managed to ensure
uninterrupted operation of facilities in Kazakhstan
and to avoid logistical difficulties due to challenges
triggered by global geopolitical and macroeconomic
events. The Company promptly and effectively
addressed emerging issues and implemented a
timely action plan to ensure supply chain resilience.
The Company continues to proactively manage
production demand and stocks of main groups of
consumables and spares, also ensures on-time
order placements and inventory delivery to
operations.
The Company is now working on optimisation of
regulations for procurement of inventory, equipment
and services and improving procedures for
contractors assessment.
Preventive and mitigation measures
In order to maintain the operation of a
resilient supply chain, the Company has
implemented a range of preventive
controls and mitigation measures to
address the volatile environment,
including:
• Advanced planning and ongoing
reviewing (e.g. tracking all shipments,
infrastructure outages and inclement
weather)
• Weekly monitoring of inventory
balances and creating safety stocks for
key inventory groups
• Shift to substitute items where the risk
of supply chain interruption is high
• Calculating multiple shipment scenarios
for critical items along with a focus on
local contractors
• Proactive order placing for consumed
•
materials
Implementation of immediate reporting
mechanisms for strategic inventory
groups on an ongoing basis.
72
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Risk management continued
Operational risks continued
4. Exploration risk
Risk level:
Risk exposure trend:
Link to strategy:
Risk description and potential
effect
Failure to discover new reserves of
sufficient magnitude or confirm
existing reserves is an inherent risk
for the mining industry:
• Tectonic fractures and rock-
fracture zones may affect the
stability of the rock mass
• Change in the form and dip
angles of ore bodies may affect
the development method and
result in an increase in the
amount of planned mining works
• Underestimation and
overestimation of Mineral
Resources may affect the
accuracy of production planning
and mining efficiency
•
• Failure to take assays and handle
samples correctly may lead to
incorrect analysis results and
errors in estimates of mineral
resources
Ineffective use of available
resources and/or failure to meet
targets could adversely affect
the Company’s future
performance
Improper approval of new Ore
Reserves may result in the
Company’s inability to benefit
from exploration results
•
Preventive control and mitigation
The Group’s Chief Geologist and
engineering teams have a strong track
record of successful greenfield and
brownfield exploration, leading to the
subsequent development of exploration
fields for commercial production.
The advancement of exploration projects
is subject to rigorous reviews through
pre-established project stage gates that
are linked to estimates of the resource
potential to be commercially developed.
We have a mine-to-model reconciliation
procedure in place to compare the actual
amount of ore mined with mineral resource
estimates. Quality assurance and quality
control procedures provide control of
works performed through control tests
and measurements. The procedures also
provide for an expert review of
technologies applied. The Company has a
system to control filing of documents with
the state authorities that enables strict
control over the time and quality of the
documentation filed.
Polymetal runs programmes to train and
develop relevant personnel and gives
priority to introducing new exploration
technologies to accelerate exploration and
improve its productivity and efficiency.
Principal areas of focus in 2023
In 2023, risk exposure was lower because
implementation of exploration projects in
Kazakhstan was not affected by sanctions
restrictions.
In 2023, Ore Reserves in Kazakhstan increased by
3% year-on-year to 11.6 Moz of GE on the back of
the revised estimate for underground mining at
Kyzyl and positive exploration results (an increase
by 249 Koz).
In 2023, Polymetal increased its interest in the
Baksy exploration join venture, which is in line with
the Company’s strategy of focusing on copper-
gold assets and expanding its presence in
Kazakhstan. Polymetal plans to continue active
exploration and expects the JORC-compliant Ore
Reserve estimate in 2024.
The average grade in Ore Reserves in Kazakhstan
was 3.2 g/t of GE – a 2% decrease year-on-year
driven by a 4% grade decline at Varvara, which
was partially offset by positive grade revaluation
at Kyzyl.
Share of Ore Reserves for open-pit mining in
Kazakhstan decreased by 4% compared with the
previous year and stood at 45% on the back of
underground reserves extension at Kyzyl.
Mineral Resources in Kazakhstan increased by
26%, while the average GE grade increased by 8%
to 2.9 g/t, mainly driven by the Mineral Resources
grade appreciation at Kyzyl by 13%, from 4.1 to
4.6 g/t of GE.
Sustainability risks
5. Health and safety risk
Risk description and potential
effect
The Group operates potentially
hazardous sites such as open-pit
mines, exploration sites, processing
facilities and explosive storage
facilities. Working on the production
sites may pose a risk for our
employees and contractors due to
various hazards and harmful
factors.
Risk level:
Risk exposure trend:
Link to strategy:
Preventive control and mitigation
Our approach to health and safety is about a
zero-harm culture. Safety responsibility
comes from the top: our Group CEO, Chair
of the Management Board, Deputy Chair of
the Management Board, Member of the
Managing Board for production and Сhief
Engineer are formally committed to personal
accountability with health and safety
indicators making up a material part of their
annual bonus KPIs. They can be subject to
penalties of up to 50% of their annual bonus
earned for non-safety-related KPIs if severe
incidents or fatalities occur.
Each key process and location has its own
risk map and mitigation plan. We develop an
annual action plan for key risk areas and
implement mitigation activities across key
areas covering five main directions of impact:
administration, risk elimination, engineering
improvements, training and visualisation.
This includes health and fatigue monitoring,
upgrading safety equipment, route
optimisation, regular road safety inspections
and improving work and rest conditions. An
internal audit of the efficiency of health and
safety management is performed.
Our Occupational Health and Safety
Management System is audited annually for
compliance with ISO 45001.
Principal areas of focus in 2023
No fatal accidents occurred in 2023 among the
Group’s employees and contractors in
Kazakhstan; nor were there any lost time injuries
recorded.
Polymetal regularly trains not only employees
but also contractors on the principles of hazards
identification, risk assessment and procedures
for ongoing production control and workplace
monitoring. The requirement to regularly identify
and assess hazards and risks is included in all
agreements with contractors.
To enhance safety risk management, the
Company continues to introduce:
• Worker-positioning systems; visualisation of
hazardous areas at workplace; dedicated
devices with built-in safety checklists for shift
risk assessment by employees
• Reporting incidents without consequences
by telephone
• Hotline
• Registration of identified discrepancies in the
EDM system.
In 2023, the risk exposure was lower due to the
absence of undeground mining at our
operations in Kazakhstan and the consequent
absence of multiple risks to employees
associated with underground operations.
External auditors confirmed the compliance of
our Occupational Health and Safety
Management System with ISO 45001 with no
adverse audit reports.
Risk key
Risk level
Risk exposure trend
Link to strategy
Low
Medium
High
Extreme
74
2023 – No change
New principal risk
2023 – Increased
2023 – Decreased
Focus on Kazakhstan and selected
Central Asian countries
Strong cash flow generation
and a strong balance sheet
Best practice in corporate governance
and sustainable development
Growth in chosen jurisdictions
The order in which the risks are presented is not relevant to their significance.
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Risk management continued
Sustainability risks continued
Sustainability risks continued
6. Environmental risk
Risk level:
Risk exposure trend:
7. Human capital risk
Risk level:
Risk exposure trend:
Risk description and potential
effect
By the nature of its production
processes, the Company has an
impact on the environment. The
main environmental risks are
emissions (emissions and
discharges) of pollutants, incidents
at tailings storage facilities,
explosives storage and water
treatment facilities. Environmental
risk factors include natural ones:
climatic, atmospheric,
hydrogeological, geological, etc.
Environmental risk realisation may
lead to financial expenses, such as
fines and penalties, excess
payments, environmental restoration
costs and statutory liability, and an
increase in social and environmental
tension.
Link to strategy:
Principal areas of focus in 2023
We have rigorous controls in place to ensure that
we meet our environmental targets related to
water use, waste and biodiversity (read more on
pages 40-41). In 2023, we continued to focus on
our material environmental issues:
• No emergencies occurred at Polymetal’s
TSFs during 2023. Detailed information about
our hydraulic structures is published annually
in Tailing Storage Facility Management
Reports on our website. The reports are
prepared in accordance with the
requirements of the Global Industry Standard
on Tailings Management.
In 2023, as required by national legislation, an
automated monitoring system was installed at
the Komar mine for the discharge of quarry
water into the Shoptykol swamp. This will
enable real-time tracking of discharge and
concentration of marker substances.
•
• We continue to maintain certification of our
Environmental Management System in
compliance with ISO 14001. In 2023, the
Kazakhstan operations were successfully
certified to international standard
ISO 14001:2015. The Group’s environmental
management system is fully adapted to
changes in the corporate governance
structure and is in line with international best
practice.
The Group continually evaluates whether the
current measures are sufficient and effective,
develops action plans, and reviews and
implements procedures that expose any
deviations at every stage of an operation’s
life-cycle. In addition, our environmental teams at
each site promptly deal with any community
enquiries regarding the environmental impact of
production on local ecosystems.
Preventive control and mitigation
We ensure that all environmental concerns
are taken into account and properly
addressed during the design,
construction, operation and closure stages
of mines and processing facilities. We are
engaged in multifaceted measures to both
mitigate environmental risks and, where
possible, to improve ecological conditions
around our sites along with continuous
monitoring of our activities. This includes
the following:
• The Company’s Environmental
Management System is certified for
compliance with ISO 14001 at all
operating sites. The Company confirms
compliance with the requirements of
the standard each year through an
environmental impact assessment
reviewed by the regulator.
• Each operation regularly identifies and
assesses environmental risks with
consolidated data analysed to evaluate
the level of the Company’s principal
environmental risk. This includes
monitoring changes in environmental
laws, standards and best practice, as
well as environmental monitoring.
• The Company continuously reduces its
fresh water use and monitors discharge
water quality to minimise its impact on
local water bodies.
• Each new project is assessed for its
proximity and potential impact on key
biodiversity areas before making an
investment decision. Periodic
biodiversity monitoring is used to track
our impact on species around existing
sites.
• Each tailings storage facility (TSF) is
rigorously monitored and inspected to
ensure ongoing control. External
experts with appropriate global
experience are engaged to undertake
regular, independent safety reviews of
our TSFs. Our studies confirm that an
emergency failure at our dams would
have no impact on settlements,
buildings, structures or facilities where
communities or employees may be
present.
• The Company implements a Cyanide
Management System to identify and
minimise the risks of potential negative
effects of cyanide on the environment
and the health of employees.
Risk key
Risk level
Risk exposure trend
Link to strategy
Low
Medium
High
Extreme
76
2023 – No change
New principal risk
2023 – Increased
2023 – Decreased
Focus on Kazakhstan and selected
Central Asian countries
Strong cash flow generation
and a strong balance sheet
Best practice in corporate governance
and sustainable development
Growth in chosen jurisdictions
The order in which the risks are presented is not relevant to their significance.
Link to strategy:
Principal areas of focus in 2023
The Company considers the retention of
employees, including key professionals, to be of
paramount importance and implements all
available measures to maintain staffing levels at
its offices and operations. Such measures
include the formation of a Talent Pool and
additional professional training for employees.
Using a variety of communication channels, we
continued with arrangements for employees from
every subsidiary to put questions to the
Company’s management on a wide range of
topics.
Risk description and potential
effect
Attraction and retention of qualified
personnel is essential to ensure
Company’s performance.
Inability to retain key personnel or to
recruit new personnel and
insufficient qualification of
employees can affect operations,
culture and environment where
business can thrive.
Preventive control and mitigation
Our corporate culture is crucial for
delivering the long-term success of the
Company and the Board appreciates our
employees playing a key role in this
process. We aim to provide a comfortable
and effective working environment, as well
as training or further education and other
opportunities for our employees.
The main principles and approaches to
human resources strategy implementation
are based on international best practice,
generally recognised principles and rules
of domestic and international law, as
stated in our Human Resources Policy,
Diversity and Inclusion Policy and Human
Rights Policy.
The Group has an internal
communications system enabling it to
independently monitor employee
satisfaction. There are direct lines to the
Group CEO and Chair of the Management
Board . Employee satisfaction surveys are
conducted on a regular basis with a
summary provided to top management.
Our Remuneration Policy is aimed at
achieving results, motivating and retaining
all levels of personnel, prioritising
functional areas and staff shortages in the
labour market. We have incentive
programmes to help retain key employees
and offer a competitive remuneration
package and benefits, including annual
indexation of the base salary against
inflation for all employees. The Company
maintains a Talent Pool of high-potential
professionals, nurturing young leaders to
manage further growth.
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Risk management continued
Political and regulatory risks
8. Legal and compliance risk
Risk level:
Risk exposure trend:
9. Political risk
Political and regulatory risks continued
Risk description and potential
effect
With operations in developing
country, such as Kazakhstan, the
Company is exposed to the risk of
adverse legislative changes that
may potentially affect its business
activities.
The most sensitive areas are the
regulation of foreign investment in
the development of mineral
resources at so-called strategic
deposits, private property,
environmental protection and
taxation.
Non-compliance with regulatory
requirements and guidance may
cause sanctions, loss of licences for
mineral properties and penalties,
and may also affect the reputation
of the Group.
The consistent imposition of
international sanctions complicates
compliance with legal and
regulatory requirements.
Preventive control and mitigation
We have a successful track record of
operating in Kazakhstan's jurisdiction. The
Group has implemented monitoring and
compliance-control procedures related to
applicable laws, regulatory requirements
and guidance, corporate governance
standards and the Group’s internal policies
and procedures. A number of control
procedures are considered by the external
auditor as part of their statutory audit.
Implementation of appropriate policies and
procedures is also the target of the internal
audit function.
We follow a risk-based approach when
considering potential corporate
transactions and maintain comprehensive
procedures to ensure appropriate
corporate practices, Including timely
monitoring of sanctions legislation in
cooperation with legal advisors. We strive
to create a more favourable regulatory
environment by being a member of various
voluntary non-governmental organisations
in Kazakhstan.
Polymetal also holds membership in
mining associations in Kazakhstan.
Link to strategy:
Principal areas of focus in 2023
In 2023, the Company maintained its overall
approach, which is aimed at ongoing monitoring
and enhancement of compliance processes.
These included a comprehensive analysis and
revision of existing policies and procedures,
development and implementation of new
guidelines and the introduction and maintenance
of appropriate controls, including on international
sanctions regulations.
On 19 May 2023, JSC Polymetal, the holding
company for the Group’s assets located in the
Russian Federation, and its subsidiaries were
designated by the US Department of State.
Following the designation, the Board set up a
Special Committee of independent Non-Executive
Directors (the Special Committee) to ensure full
and comprehensive compliance with US sanctions
and to develop an appropriate response to ensure
that the external challenges facing the Company
were addressed in the best interests of the
Company, its shareholders and other
stakeholders. To ensure sanctions’ compliance,
the Group’s Russian subsidiaries were ring-fenced,
meaning that:
• Management of the Russian operations was
delegated to the executives of JSC Polymetal
• All service agreements between the Company
and its non-Russian subsidiaries, and JSC
Polymetal and its subsidiaries were terminated
• All payments from the Company and its
non-designated subsidiaries under other
inter-Group agreements with JSC Polymetal
and its subsidiaries were discontinued.
Notwithstanding applied risk mitigation measures,
the legal and compliance risk level for 2023 has
been increased to ‘extreme' versus 2022 because
of the Company’s material exposure due to the
continuing sanctions risk for the Group’s Russian
segment.
The Company expects the extreme level of legal
and compliance risk will be reassessed downward
in the next reporting period based on the
divestment of its Russian business completed on
7 March 2024.
Risk level:
Risk exposure trend:
Link to strategy:
Risk description and potential
effect
Operating in Kazakhstan involves
some risk of political instability,
which may include changes in
government, negative policy shifts
and civil unrest.
Financial and economic international
sanctions as well as the high level of
geopolitical tensions and
macroeconomic uncertainty may
affect the Group’s business
processes to varying degrees, given
the correlation of different risk
factors as a part of the Group’s
principal risks profile.
Preventive control and mitigation
The Group actively monitors political
developments on an ongoing basis.
However, the geopolitical and
macroeconomic situation is out of
management’s control.
The Company has implemented
appropriate policies and procedures for
sanctions compliance within the Group,
which are now an integral part of our risk
management process.
Proactive engagement with existing and
potential lenders and diversification of
lending counterparties enables the
Company to maintain larger cash balances
and extend maturities on existing
borrowings.
The Company has re-domiciled to a
jurisdiction deemed to be 'friendly' by the
Russian Federation and divested its
Russian business aiming to unblock the
ability to execute further corporate actions,
de-risk the Company’s business and
restore the shareholder value.
Principal areas of focus in 2023
In 2023, neither the Company, its subsidiaries nor
its affiliates were designated as sanctions’ targets
of the UK, EU or US, with the exception solely of
the Company’s Russian subsidiaries, which were
targeted by US blocking sanctions. Potential
sanctions and regulatory developments are
constantly monitored. The Board of Directors
receives appropriate updates on a timely basis.
On 19 May 2023, JSC Polymetal, the holding
company for the Group’s assets located in the
Russian Federation, and its subsidiaries were
designated by the US Department of State. To
ensure US sanctions compliance, Polymetal
ring-fenced the Group’s Russian subsidiaries,
where new management bodies were formed –
the CEO and the Board of Directors. They make
decisions only in relation to JSC Polymetal and the
Group’s Russian subsidiaries.
In 2023, the risk level remained 'extreme' because
of the Company’s material exposure due to the
continuing sanctions risk for the Group’s Russian
segment.
In August 2023, the Company successfully
completed the re-domiciliation from Jersey to the
Astana International Financial Centre (AIFC) in
Kazakhstan. It was a critical first step towards
preserving Polymetal’s business continuity and
restoring shareholder value.
On 7 March 2024 following shareholder approval
and satisfaction of all other conditions, the
divestment of Polymetal Group’s Russian
business, which included the disposal of 100% of
the share capital of JSC Polymetal to JSC
Mangazeya Plus was completed. This ensures
significant de-risking of the Group's operations in
Kazakhstan.
The Company expects the extreme level of political
risk will be reassessed downward in the next
reporting period based following the divestment of
its Russian business on 7 March 2024.
Risk key
Risk level
Risk exposure trend
Link to strategy
Low
Medium
High
Extreme
78
2023 – No change
New principal risk
2023 – Increased
2023 – Decreased
Focus on Kazakhstan and selected
Central Asian countries
Strong cash flow generation
and a strong balance sheet
Best practice in corporate governance
and sustainable development
Growth in chosen jurisdictions
The order in which the risks are presented is not relevant to their significance.
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Risk management continued
Political and regulatory risks continued
10. Taxation risk
Risk level:
Risk exposure trend:
Link to strategy:
Principal areas of focus in 2023
Amendments to Kazakhstan’s tax legislation
came into effect on 1 January 2023.
Key among the changes for the Group was a
50% increase in minerals extraction tax (MET)
rate on exchange-traded metals.
In addition, the new Kazakhstan Tax Code is
currently being drafted. To date, no information
has been made available about any specific
changes but the Group does not exclude the risk
that some tax rates may increase from 2025. In
the absence of any detailed information,
Polymetal is unable to estimate the potential
impact on the Group.
The Group does not currently have any
information, other than the above, on any specific
changes in tax laws that might lead to a
significant increase in the Group’s tax burden.
Risk description and potential
effect
Kazakhstan tax law is subject to
frequent changes and allows for
varying interpretations.
As a result, the Group
management’s interpretation of the
tax laws applicable to the Group’s
operations and activities may be
challenged by relevant tax
authorities.
The Group is closely following
developments relating to the new
Kazakhstan Tax Code, which is
expected to be adopted by the end
of 2024.
The Group continues to monitor the
progress on the OECD’s Base
Erosion and Profit Shifting (BEPS)
action plan, including the global
corporate taxation system reform
relating to the income of
multinational enterprises, in order to
assess its impact and, if necessary,
adapt it in all countries in which the
Group operates.
The Group carries out its activities
in several jurisdictions and this gives
rise to complex rules of transfer
pricing that are linked with
uncertainty and subjectivity.
Preventive control and mitigation
Our approach includes constant monitoring
and analysis of changes in Kazakhstan and
international tax laws, law-enforcement
practice and recommendations of
supervisory authorities.
The Group takes due account of current
court practice and applies appropriate
methodological guidance and administrative
controls. The Group reviews existing
controls for their sufficiency and adapts
them if necessary.
In order to enhance methodological and
administrative control over tax
management, the Group introduced a
transfer pricing methodology, which
complies with the requirements of OECD
and local standards. The Group updates
the procedure each year to ensure that
operations between Group companies are
based on commercial terms.
To date, the Group is not aware of any
significant outstanding tax claims, which
could lead to additional taxes accrued in the
future (beyond amounts already booked or
disclosed in the Group’s financial
statements). The Group applies a
conservative approach to provisions for
probable tax liabilities.
Risk key
Risk level
Risk exposure trend
Link to strategy
Low
Medium
High
Extreme
80
2023 – No change
New principal risk
2023 – Increased
2023 – Decreased
Focus on Kazakhstan and selected
Central Asian countries
Strong cash flow generation
and a strong balance sheet
Best practice in corporate governance
and sustainable development
Growth in chosen jurisdictions
The order in which the risks are presented is not relevant to their significance.
Financial risks
11. Market risk
Risk description and potential
effect
Metal prices volatility may result in
material and adverse movements in
the Company’s operating results,
revenues and cash flows. It also
poses a significant impact on
consistent cash flow generation at
operating mines.
Market risks also include the
possible inability to sell our metal
products due to the disruption of
existing sales channels.
Risk level:
Risk exposure trend:
Link to strategy:
Preventive control and mitigation
The Company has developed and, to the
extent necessary, implemented procedures
to ensure consistent cash flow generation at
operating mines:
• Redistribution of ore feedstock between
the deposits within a hub to achieve
higher margins due to better grade
profile, better logistics or less expensive
mining methods
• Deferring the start of production while
continuing ore stacking to achieve better
cost profiles due to the positive effects
of scale
• Asset-level cost-cutting
• Adjustment of short-, medium- and
long-term life-of-mine plans at least
annually to reflect updated commodity
prices.
Stress testing for conservative price
assumptions is performed to ensure the
resilience of operating mines in a stress
scenario and continued value creation.
Emergency response plans have been
developed.
Principal areas of focus in 2023
In 2023, metal prices experienced volatility due to
various factors. Our stress testing factored, in
particular, the adverse changes in metal market
prices to ensure the resilience of our operating
mines in severe stress scenarios.
The decrease in sales volumes during the period
had a negative impact on revenues at all
operating mines in Kazakhstan, which was
partially offset by higher commodity prices,
resulting in 4% decrease year-on-year.
In the first half of 2023, the Company
experienced persistent railway congestion in an
eastwardly direction, resulting in delays in
shipments from Kyzyl to China. In the second half
of the year, the Company was able to stabilise
sales by readjusting transportation routes, which
significantly reduced the production/sales gap.
The gold refractory concentrate produced from
the ore mined at the Kyzyl deposit in Kazakhstan
requires highly specialised processing services.
These processing services are currently provided
at the Amursk POX plant in Russia in accordance
with the Tolling Agreement.
The Company has progressed its evaluation and
taken the necessary steps to accelerate the
construction and commissioning of the Ertis POX
facility in Kazakhstan to replace the operations
that are the subject of the Tolling Agreement and
achieve full operation based in Kazakhstan. In the
meantime, as an additional alternative, the
Company negotiates appropriate arrangements
with third parties in respect of Kyzyl concentrate
processing services.
In October 2021, China introduced new standard
updates to existing regulations relating to
impurities of arsenic in imported gold
concentrates. Non-compliance leads to 13% VAT
on exported concentrate. Polymetal may be
exposed to this regulation as part of considering
alternative options in respect of gold concentrate
until Ertis POX is built and reaches its design
capacity, which will allow us to process all
concentrate within the Сompany.
12. Currency risk
Risk description and potential
effect
The Group’s revenues and the
majority of its borrowings are
denominated in US Dollars, while a
substantial amount of the Group’s
operating costs are denominated in
Kazakh Tenge. As a result, changes
in exchange rates affect financial
results and performance.
Growth of consumable prices and
inflation, due to stable metal prices
and appreciation of the functional
currencies against the Dollar, may
lead to an adverse impact on our
operations in Kazakhstan, resulting
in higher Dollar values of local
currency-denominated operating
costs and lower margins.
Preventive control and mitigation
Natural hedging is used to reduce
currency risk exposure: the Group
maintains a significant part of its loan
portfolio in Dollars, balancing financial
cash flows from revenue denominated in
Dollars. As at 31 December 2023, over
72% of borrowings are denoted in
US Dollars and China's Renminbi.
Budget is planned based on the inflation
risk. Flexible budgeting is used to monitor
the effect of exchange rate fluctuations on
the Group’s financial results. The Group
has determined critical exchange rate
levels for its operations and is monitoring
risk against these levels.
Risk level:
Risk exposure trend:
Link to strategy:
Principal areas of focus in 2023
Kazakhstani Tenge remained steady at 456 KZT/$
(2022: 461 KZT/$) throughout 2023. This was
driven by increased oil exports and significant
sales of foreign currency and gold reserves by the
National Bank of Kazakhstan.
We continuously monitor and report on financial
impacts resulting from foreign currency
movements.
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Risk management continued
Financial risks continued
13. Liquidity risk
Risk description and potential
effect
Insufficient cash and available
facilities or the inability to raise
sufficient funds to meet current
operating or ongoing financial
needs or to develop new projects
and growth.
Inadequate cash management in
terms of cash flow forecast,
available resources and future
requirements.
Our primary source of liquidity is our
operating cash flow, which is
dependent, inter alia, on metal
prices and the ability of our
operations to deliver projected
future cash flows.
Funding costs may rise on the back
of inflationary pressure and the
possibility of more restricted access
to funding.
Preventive control and mitigation
To manage the liquidity risk, the Group:
• Controls its leverage and financial
covenants as well as the liquidity
cushion
• Focuses on generating positive free
cash flow
• Monitors and controls cash
expenditure at all stages of a project
development to ensure stable cash
flow from operations, and applies
disciplined capital allocation criteria to
all its investments
• Monitors the availability of funding and
proactively refinances its maturing debt
• Stress-tests its forecasts and budgets
to understand the impact of different
price and foreign-exchange-rate
scenarios on liquidity
• Ensures that there is enough liquidity
reserve (including cash and undrawn
facilities) to cover its funding needs.
Risk level:
Risk exposure trend:
Link to strategy:
Principal areas of focus in 2023
Net debt in Kazakhstan decreased to $174 million
as at 31 December 2023, compared with $277
million as at 31 December 2022. This represents
0.39x of Adjusted EBITDA.
In 2023, the risk exposure was relatively lower than
in 2022.
As at 31 December 2023, the Group $329 million
of cash and $100 million of undrawn credit facilities
(excluding assets sold in March 2024). The Group
maintains policies to limit the concentration of
credit risk related to the cash instruments, review
counterparty creditworthiness, and ensure liquidity
of available funds.
Currently, our interest-rate exposure mainly relates
to interest receipts on our cash balances, the
mark-to-market value of derivative instruments
(interest-rate swaps) and changes in the interest
rate on the variable-rate debt. The Group projects
a slight increase in the average interest rate as a
result of the refinancing of its short-term debt in
2024.
The Group remains committed to a prudent capital
allocation and investment discipline and will
continue to manage the liquidity risk by focusing
on the free cash flow generation and maintaining
substantial liquidity reserve over its short-term
funding requirements.
Emerging risks
In addition to the currently identified risks, the Company has
a process of identifying and addressing emerging risks.
Emerging risks are defined as risks or a combination of risks
whose potential impact is not clear at the present time but
may develop to become a principal risk in future, as well as
circumstances or trends that could significantly impact the
Company’s financial strength, competitive position or
reputation within the next five years and have a long-term
impact for several years. While the emerging risks tend to
be characterised by potentially unknown and far-reaching
impacts on industry and the external environment in
general, emerging risks are particularly important in the
context of the Company’s strategic planning. Accordingly,
we identify the critical assumptions in strategic plans that
could be impacted by these emerging risks.
Emerging risks description and their potential impact on the Group
Climate change
Resource
nationalism
We recognise that global climate change represents both risks and opportunities for our business. Climate-
related risks include physical risks (e.g. potential damage induced by shifts in precipitations, hurricanes,
permafrost degradation, etc.) and transitional risks (such as carbon taxation/quotas, additional environment-
related regulatory requirements, increased costs of fossil fuel and potential negative perception of carbon-
intensive industries/companies by the Company’s stakeholders etc.).
The Company has adopted a Climate Strategy, which includes a comprehensive assessment of climate change
risks and opportunities, and mitigation/adaptation plans, as well as setting targets and taking specific steps to
improve our resilience to climate change. See details in the Climate and energy section on pages 56-61.
We have also disclosed detailed climate-related data in our ESG datapack and CDP Climate disclosure.
Despite corporate changes and the refocusing on Kazakhstan operations during 2023, the Company continued
to follow the corporate Climate Management System and corporate standard for assessing climate risks and
opportunities. The processes for identifying, assessing and managing climate-related risks are integrated into
the Group’s overall risk management. In particular, this includes a range of criteria to consider a climate-related
risk as a component of the existing principal risk or to introduce a new one provided certain conditions are met.
In 2023, we adjusted our risk assessment approaches in Kazakhstan and updated the assessment of
climate-related risks and opportunities. The key physical risks for our assets in Kazakhstan, associated with
heat or cold waves, hurricanes and water scarcity, as well as the transitional risks, associated with national and
international carbon regulation, are the most likely to increase in the long term. See detailed results of the
assessment and more climate-related information on pages 56-61 and 185-186. Based on the updated
assessment, the climate-related risk was retained among emerging risks.
In addition to the direct impact of climate risks on our operations and assets, we are also aware of the potential
climate risks associated with our supply chain. Thus, the climate risks affecting our transport infrastructure and
logistics are included in the risk registers of each of the assets. In response to these threats, we analyse and
mitigate risks associated with our transport infrastructure. In addition, as part of our procurement strategy, we
consider potential negative climate factors and work to adapt to them as part of our supply chain management.
Given the changes in the Group’s structure, we plan to update our Climate Strategy. This will include a
comprehensive assessment of climate change risks and opportunities, and mitigation/adaptation plans, as well
as setting targets and taking specific steps to improve our resilience to climate change.
This is the attempt by host states to assert greater control over natural resources in their territory by restricting
extractive industries through a variety of methods, including limitation of foreign investment in the sector, stricter
procedures for granting licences, expropriation/nationalisation of mining assets, limitation or export duties for
bullion/concentrate export sales and/or additional taxation on the mining sector. Historically, Kazakhstan has
maintained a safe and predictable investment climate for the hard rock mining industry. The Group actively
engages with governmental and local authorities in its regions of operation in order to monitor and address any
potential issues.
Divestment of Polymetal Group’s Russian business in March 2024 allowed to remove the risk associated with
nationalisation or some other form of property expropriation of Polymetal Russia by the Russian Government.
Risk key
Risk level
Risk exposure trend
Link to strategy
Low
Medium
High
Extreme
82
2023 – No change
New principal risk
2023 – Increased
2023 – Decreased
Focus on Kazakhstan and selected
Central Asian countries
Strong cash flow generation
and a strong balance sheet
Best practice in corporate governance
and sustainable development
Growth in chosen jurisdictions
The order in which the risks are presented is not relevant to their significance.
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Risk management continued
Emerging risks continued
Governance
Cybersecurity
Cybersecurity risks for the Group are mainly represented by risks of unauthorised access to confidential
information, bank accounts etc. as well as potential interference in automated management systems of
technological processes, corporate networks, power supply control systems and convergence of corporate
and technological networks (within any process). These risks are considered to be limited in the context of the
Company’s current IT architecture and information security systems. However, maintaining resilience to
cybersecurity threats is a priority for the Group.
The Group’s strategy provides for cybersecurity risk management in accordance with the ISO/IEC 27000 series
of standards and compliance with requirements of applicable legislation. We constantly monitor current
systems, control measures and monitoring procedures, and implement stage-by-stage preparation for
obtaining a certificate of compliance with the ‘СТ РК ISO/IEC 27001-2023’ standard.
In 2023, there was an increase in phishing attacks targeting employees via corporate email and personal
messengers. These attacks pose a serious security risk to the Company, as they may result in sensitive data
leaks or security breaches. To combat phishing, additional security settings were added to the mail servers,
which resulted in the blocking of up to 99% of received phishing messages.
The Group uses an information technology management platform, based on the COBIT package (Control
Objectives for Information and Related Technology), which provides a complete set of high-level requirements
for effective control of each IT process. The Group carefully monitors emerging information security threats and
the management of network and information flows and implements effective protection.
All breaches of Information Security Policies and incidents are immediately identified and eliminated.
The corporate infrastructure is automatically scanned (critical assets are scanned first). Basic protection
instruments respond adequately preventing adverse consequences.
In the second half of 2023, given the growing cybersecurity risks, the Company began implementing an
additional network asset monitoring system called Zabbix. This new solution is aimed at improving the control
over the security and operation of the network infrastructure, in order to better detect and prevent possible
cyber threats.
Remote access to working facilities is arranged in accordance with high cybersecurity standards. The
processes for providing and disabling access to resources have been additionally secured and automated.
We raise our employees’ awareness of information security and cyber hygiene via the internal corporate
network, regular newsletters, employee training and extensive training for targeted groups within the Talent
Pool.
86 Board of Directors
88 Corporate governance
94 Audit and Risk Committee report
98 Safety and Sustainability Committee report
100 Nomination Committee report
102 Remuneration Committee report
113 Stakeholder engagement
114 Going concern
115 Directors’ responsibility statement
116 Directors’ report
84
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Committed to the highest standards
The Directors are committed to maintaining
the highest standards of corporate governance.
The Company has complied with all the
provisions of the AIFC regulations, in particular
with Corporate Governance Principles set out
in the AIFC Market Rules.
17%
ethnic minority Directors1
Board independence
17%
Non-independent
Directors
Independent
Directors
Board skills
(%)
88
88
88
88
83%
75
Mining
Business strategy
Finance
Climate change
Governance
33%
women Directors
Board Diversity
33%
67%
Men
Women
Statement of compliance with AIX Corporate Governance Principles
The Directors are committed to maintaining high standards of corporate governance. Up until de-listing from the London Stock
Exchange on 29 August 2023, Polymetal International was required to comply with the UK Corporate Governance Code (the UK
Code). Since 8 August 2023, when the Company completed re-domiciliation and Astana International Exchange (AIX) became the
Company’s primary market, Polymetal has been required to comply with AIX Corporate Governance Principles (AIX Principles).
The best practice standards specified in AIFC Market Rules Schedule 3 have been adopted by the Company for the purposes of
complying with the Corporate Governance Principles. Detailed information about how Polymetal applies AIX Principles is available on
pages 90-91. This includes a statement by Directors as to whether or not, in their opinion, the corporate governance framework of
Polymetal is effective in promoting compliance with the Corporate Governance Principles, along with supporting information and
assumptions, and qualifications if necessary.
As well as complying with AIX Principles, the Company has complied with respective laws and regulations in relation to its listing on
the Moscow Stock Exchange where applicable.
1 Although Kazakh-born, Janat Berdalina identifies with her Central Asian heritage.
Committee Chair
Sp Special Committee
A Audit and Risk Committee
N Nomination Committee
R Remuneration Committee
S&S Safety and Sustainability Committee
Key
86
Vitaly Nesis S&S
Group Chief Executive Officer
Evgueni Konovalenko N A R Sp
Senior Independent Director
Steven Dashevsky A Sp S&S
Independent Non-Executive Director
Appointed: 2003.
Previous experience: CEO of Vostsibugol,
2002–2003. Strategic Development Director at
the Ulyanovsk Automobile Plant in 2000.
McKinsey in Moscow, 1999–2000. Merrill Lynch
in New York, 1997–1999.
Qualifications: BA in Economics from
Yale University. MA in Mining Economics
from St. Petersburg Mining Institute.
Appointed: 17 March 2022.
Previous experience: Has extensive
experience in investment banking: since 2005
held various executive positions in Renaissance
Capital, including Managing Director, Head of
International Equities and FICC Sales. Prior to
joining Renaissance Capital, he worked at UBS,
London at Structured Products Group and at
Merrill Lynch, New York in Mergers and
Acquisitions Group.
Qualifications: BA in Economics from
Columbia College of Columbia University, NY,
US. MBA from Solvay Business School,
University Libre de Bruxelles (ULB), Brussels,
Belgium.
Appointed: 17 March 2022.
Previous experience: Investment professional
with more than 20 years’ experience in financial
markets. Since 1998, has held various senior
management positions in leading financial
services firms including Aton Capital, UniCredit
Securities, Kola Capital LLP. Non-executive
Director of Integra Group, 2012-2013.
Qualifications: Graduated from Baruch
College of The City University of New York
(Finance and Investments). Chartered Financial
Analyst (CFA)
Other roles: Chief Executive Officer and Chief
Investment Officer of D&P Advisors LLP (UK).
Janat Berdalina S&S R N Sp
Independent Non-Executive Director
Pascale Jeannin Perez N Sp S&S
Independent Non-Executive Director
Richard Sharko R A Sp
Independent Non-Executive Director
Appointed: 17 March 2022.
Previous experience: Audit, reporting, tax and
management consulting professional. She was a
Co-shareholder, Managing Partner and
President of KPMG in Kazakhstan and Central
Asia as well as a Board Member of KPMG in the
CIS for more than a decade. Janat also held
Independent Director positions at several
Kazakh entities, including Kazakhstan Stock
Exchange, National Agency for Technological
Development, KazTransGas, Kazpost. She was
an executive at the Foreign Investors’ Council in
Kazakhstan and actively participated in the
development of the Tax Code and the Law on
Auditing in the country.
Qualifications: Executive MBA from Ecole
Nationale des Ponts et Chaussees, France.
Degree in Economics from the Academy of
Management, Almaty, Kazakhstan. Degree in
International Business from Bristol University, UK.
Honorary Auditor of the Republic of Kazakhstan.
Other roles: Honorary member of the Board of
Trustees Almaty Management University’
(AlmaU) Partner of Arizona State University,
Arizona US; Honorary member of the Qazaq
Independent Directors Association (QID).
Appointed: 1 December 2022.
Previous experience: Has over 35 years of
experience in leadership roles in mining, energy
and environmental industries. Previously served
as a Director at DYD International Holding,
shareholder of a significant gold project in Ivory
coast, was Chairman and CEO of Derichebourg
Polyurbaine Group. Special adviser to High
Power Exploration Inc (HPX).
Qualifications: École Normale, degree in
Economics from University of Montpellier.
Other roles: Founder and CEO of International
Services Corporation. Shareholder and Member
of the Board of Imperator Resources (former
Ivanhoe Gabon).
Appointed: 1 December 2022.
Previous experience: Has over 40 years’
global experience in audit, financial accounting
and risk management. He was a partner at PwC
for 25 years, leading teams in various regional
offices in Europe and Russia, and engaging with
local and multinational clients. He was also on
the regional management board and
governance board as well as on the Global
Board of PwC, 2009-2013. Additionally, he was
a Board Member on the International Auditing
and Assurance Standards Board, New York,
2015-2020.
Qualifications: Bachelor of Science in
Accounting, Loyola Marymount University, Los
Angeles, CA. Certified Public Accountant
(Retired), State of California, US.
Other roles: Board member and Audit
Committee Chair of the bank holding company,
Agri Europe Cyprus Ltd, 2022-present.
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Corporate governance
I have been impressed with
the level of determination of
Board members in accomplishing
re-domiciliation and initiating further
actions to restore shareholder value.”
Evgueni Konovalenko
Senior Independent Director
Board meeting attendance
Board member
Vitaly Nesis
Konstantin Yanakov¹
Evgueni Konovalenko
Janat Berdalina
Steven Dashevsky
Pascale Jeannin Perez
Richard Sharko
Paul Ostling²
Board
meetings
15/17
15/17
17/17
17/17
17/17
16/17
17/17
8/8
1 Resigned from his position as a Non-Executive Director of the Company
effective 28 February 2024.
2 Resigned from his position as an Independent Non-Executive Director of
the Company effective 18 June 2023.
Role and structure of the Board
As of the date of this report, the Company’s Board comprises one
Executive Director and five Independent Non-Executive Directors.
Following the disposal of Polymetal's Russian business, the Board
will start the search for the new Chair.
The Company’s corporate governance framework safeguards
against any conflict of interest, including the complete
independence of the Audit and Risk, Nomination, Remuneration
and Special Committees and disclosure of any related party
transactions in the financial statements, as well as preventing any
individual from having unfettered powers of decision-making.
The Board has determined that Evgueni Konovalenko, Janat
Berdalina, Steven Dashevsky, Pascale Jeannin Perez and Richard
Sharko are Independent Non-Executive Directors. The Company
at present has not appointed a Chair of the Board.
The Company considers that the Board and its Committees have
the appropriate balance of skills, experience, independence and
knowledge of the Company to enable them to discharge their
respective duties and responsibilities effectively. All Directors have
access to the advice and services of the Company Secretary and
are able to take independent professional advice, if necessary, at
the Company’s expense.
Special Committee
A Special Committee of the Board, comprising the Independent
Non-Executive Directors of the Company, was set up in
accordance with the Company’s Articles of Association. Acting at
all times in the best interests of the Company, its shareholders and
other stakeholders, its remit was to establish the best way to
maximise shareholder value. Various available options to modify
the Group’s asset-holding structure were evaluatede, including
re-domiciliation of the parent company, Polymetal International plc,
into the Astana International Financial Centre (AIFC), a financial hub
in Astana, Kazakhstan. This took account of the Group’s significant
operations and presence in the region, the AIFC legal system, tax
regime and the ability to execute such a re-domiciliation. On 19
February 2024, the Special Committee, after a thorough review,
recommended the divestment of the Group’s Russian assets as
the most viable option for mitigating the legal, financial and
operational risks, as welll as the optimal path towards
reestablishing shareholder value. The divestment completed on 11
March 2024.
Training
Polymetal invests significant amounts of time and money in training
employees, but it is as important that Directors continue to develop
and refresh their understanding of the Group’s activities. Every
year, as part of the site trip, the Board meets local management at
operations and Directors familiarise themselves with the
technology used, logistics, health and safety standards and
supplier management. The Board is kept informed of relevant
developments within the Company by way of monthly management
reports, including comprehensive information on operating and
financial performance and the progress of capital projects.
It is also essential that the Directors regularly refresh and update
their skills and knowledge with both external and internal training
as appropriate. Members of the Board individually attend seminars,
conferences and training events to keep up-to-date with
developments in key areas. Board meetings include presentations
from Group experts to ensure that the Directors have access to the
wealth of knowledge within the Company, as well as presentations
from external providers.
Board areas of focus in 2023 and link to strategy
Focus on Kazakhstan and selected Central Asian Countries
• Strategy review
• Confirmation of tax status, registered address
• Work of the Special Committee of the Board to evaluate potential modification of the Group’s asset-holding
structure
• Divestment of JSC Polymetal and its subsidiaries
• Ertis POX (including Kyzyl sales structure/POX interaction update)
Growth in chosen jurisdictions
• Operational update
• Quarterly and annual production results
• Price assumptions for Reserve and Resource estimates
• Mineral Resources and Ore Reserves update
• Supply chain: resilience, cost management and increasing efficiency
• Baksy project update
Strong cash flow generation and a strong balance sheet
• Approval of preliminary and annual financial results
• Annual review of effectiveness of the Company’s risk management and control systems and risk tolerance
review
• Capital allocation (including Dividend Policy review, Hedging Policy review)
• Budget, including use of the free cash flow
Best practice in corporate governance and sustainable development
• Redom update (general updates, IR considerations, listing on various exchanges)
• Post-redom trading vision (including detailed infrastructural discussion)
• Re-domiciliation and London de-listing
• Unlocking of shares (First and Second Tender offers)
• GHG performance: Group results for 2022, analysis of Kazakh assets and opportunities for further
decarbonisation
Integrated Annual Report review and approval
Independent Non-Executive Directors’ succession planning, appointment of Directors
• TCFD and sustainability overview
• Renewable energy projects update
• Sanctions compliance
•
• Modern Slavery Statement review
•
• Directors’ appointment and re-appointment at the AGM and composition of Board Committees
• Directors’ Remuneration Policy approval
• Convening the AGM, approval of shareholder materials
• Directors’ disclosure of interest
• Review of schedule of matters reserved for the Board and terms of reference of Committees
• Directors and Officers liability insurance renewal
• Update of Group policies
Board evaluation
• Operations:
In December 2023, the Board initiated its annual internal Board
and Committee evaluations, which included questionnaires filled in
by Directors. General outcomes were circulated via the Company
Secretary in January 2024. The individual Committees conducted
follow-up sessions and had subsequent discussions with the
Nomination Committee to ensure the completeness of the reviews.
Finally, the Board reviewed management’s response to the results
of the Board evaluation. The results of the Board evaluation and
follow-up topics were included in the revised Board and
Committee work plans for 2024.
– Profitability and production growth
– Ertis POX development
– Operational challenges especially in view of various
restrictions (i.e. sales distribution, distortion in the supply
chain)
• Governance:
– Appointing a Board Chair
– Ongoing sanctions and regulatory compliance, risk
mitigations measures
– Board composition, succession, renewal
– Continuous improvement of the Board and Committees
The top Board priorities for 2024 were identified as:
processes and procedures
• Corporate strategy:
– Successful completion of the divestment process
– Restoring shareholder value, improving the Company’s
market position
– Portfolio management, developing new projects (geographic
focus)
– Maintaining high performance levels
– Risk management
– Focus on sustainability strategy, ESG initiatives
• Areas for Board development included:
– Improved communication between the Board and
management
– Regular and timely updates with sufficient time to review
materials
– Informal ad hoc meetings to address any questions raised
– Additional function-specific, in-depth sessions.
Detailed information of the Audit and Risk Committee’s review is
available on pages 94-97.
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How we apply AIX Principles
Principle 1: Board of Directors
A Reporting Entity must have an
effective Board which is collectively
accountable for ensuring that the
Reporting Entity’s business is managed
prudently and soundly.
Polymetal’s Board is in charge of ensuring the long-term success of the Company. To
achieve this, it holds regular strategic sessions to discuss the current state of affairs and
future developments. As part of every strategic decision, the impact on all stakeholders is
reviewed thoroughly. Further information on Board topics is discussed on page 89.
The Board has regular discussions on Polymetal’s purpose, value and culture, and ensures
that these align with the Group strategy. Further information on purpose and value is
available on page 12.
As part of the annual budgeting process and in further discussions throughout the year
about development projects, the Board ensures that capital allocation is aligned with the
Group’s objectives. Further information is available on pages 15.
To ensure effective controls are in place, management is held to account by the Audit and
Risk Committee. Information on risks and controls is available on page 72.
Principle 4 – Risk management and internal control systems
The Board must ensure that the
Reporting Entity has an adequate,
effective, well-defined and well-
integrated risk management, internal
control and compliance framework.
Risk management approach and risk assessment is the responsibility of the Board and is
integral to the achievement of the Group’s strategic objectives. The Board is satisfied that
there is an ongoing process, which was operational during the year and up to the date of
approval of the Integrated Annual Report, for identifying, evaluating and managing the
principal and emerging risks faced by the Group.
The Group’s Audit and Risk Committee has three sessions annually specifically dedicated to
risks. Principal risks and approach to internal controls and risk management are outlined on
page 70.
The Company has a strong and highly regarded internal audit department. There are also
joint sessions of the Audit and Risk and Safety and Sustainability Committees on risks that
relate to the remit of both committees. Comprehensive information about the work of the
internal audit department is available on pages 96-97. In addition, the Audit and Risk
Committee regularly reviews the work of the external auditors.
Principle 2 – Division of responsibilities
Principle 5 – Shareholder rights and effective dialogue
The Board must ensure that there is a
clear division between the Board’s
responsibility for setting the strategic
aims and undertaking the oversight of
the Reporting Entity and the senior
management’s responsibility for
managing the Reporting Entity’s
business in accordance with the
strategic aims and risk parameters set
by the Board.
The Company’s Board comprises one Executive Director and five Independent Non-
Executive Directors.
Policy on the division of responsibilities between Chair and Group CEO and role of SID is
available on the web-site.
A schedule of the annual Board and Committee meetings is approved at the start of the year
to ensure that management reports to the Board at regular intervals on different areas of the
business.
SID ensures that Board meetings are held in a constructive manner and that all Directors
have a chance to express their opinion. There is mutual dialogue and the Independent
Non-Executive Directors have regular meetings without management present. There is an
ongoing improvement programme for Group employees to ensure the consistency of all
papers provided to the Board.
Information about the Board Directors and their roles is available on pages 86-87.
Information on Group strategy is available on pages 14-15 and on risks on pages 72-84.
Principle 3 – Board composition and resources
The Board, and its Committees, must
have an appropriate balance of skills,
experience, independence and
knowledge of the Reporting Entity’s
business, and adequate resources,
including access to expertise as
required and timely and comprehensive
information relating to the affairs of the
Reporting Entity.
The Company’s corporate governance framework safeguards against any conflict of interest,
including the complete independence of the Audit and Risk, Nomination, Remuneration and
Special Committees and disclosure of any related party transactions in the financial
statements, as well as preventing any individual from having unfettered powers of decision
making. In addition, the company established Safety and Sustainability Committee of the
Board.
The Board will continue developing a revised succession plan, including the search for a new
Board Chair. Directors continue to be selected from a wide pool of candidates. Read more
on pages 93, 100.
The Board, all its Committees and individual Directors participate in an annual internal Board
and Committee evaluation to provide feedback on their operation. Results of such evaluation
are thoroughly analysed, discussed by the Board and the Nomination Committee and
reflected in the Board work programme for the following year. Read more on page 89.
All Directors have sufficient time to devote to the business of Polymetal. Please refer to
page 113 for further information. The broad experience of all Directors ensures constructive
challenge, strategic guidance and specialist advice.
The Board must ensure that the rights
of shareholders are properly
safeguarded through appropriate
measures that enable the shareholders
to exercise their rights effectively,
promote effective dialogue with
shareholders and other key
stakeholders as appropriate, and
prevent any abuse or oppression of
minority shareholders.
The Board ensures ongoing dialogue with all its stakeholders, including shareholders. More
information is available on pages 89, 113.
Workforce engagement is set up by way of Board engagement with the targeted employee
groups. More information is available on page 49.
Principle 6 – Position and prospects
The Board must ensure that the
Reporting Entity’s financial and other
reports present an accurate, balanced
and understandable assessment of the
Reporting Entity’s financial position and
prospects by ensuring that there are
effective internal risk control and
reporting requirements.
The Board reviews in detail the Company’s financial statements. The process of achieving
accurate, balanced and understandable assessment is described on page 94.
Following completion of the annual audit, the Audit and Risk Committee holds an in-depth
session to analyse the audit process and its outcomes. This includes separate meetings with
the external auditors, finance department and internal audit department. The Group’s
Integrated Annual Report is reviewed in detail by the Board.
Principle 7 – Remuneration
The Board must ensure that the
Reporting Entity has Remuneration
structures and strategies that are well
aligned with the long-term interests of
the entity.
The Remuneration Committee of the Board reviews the KPIs of the Group CEO and senior
management annually to ensure remuneration is aligned with the Company’s purpose and
values. KPIs are aimed at achieving long-term success and, in 2019, an ESG KPI was
introduced to promote long-term sustainable success. From 2022, an ESG metric with a
weighting of 20% was also added to PSP vesting conditions. Further information is available
on page 111.
There is a robust and transparent process for developing executive remuneration. The
Directors’ Remuneration Policy is approved every three years by shareholders and was
approved at the 2023 AGM. Please refer to pages 103-108 for more information. The
Remuneration Policy for executives and management is consistent with that of the Group
CEO to ensure strategic objectives are aligned. No Director is involved in deciding their own
remuneration outcomes.
The Remuneration Committee consists of Independent Non-Executive Directors, who apply
the Remuneration Policy prudently and have discretion over bonuses and awards.
Further information is available on page 102.
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Our governance framework
The Board
The Board defines business strategy, assesses risks and monitors performance.
Audit and Risk
Committee
helps the Board to monitor
the integrity of the Group’s
financial statements; reviews
the effectiveness of the
Group’s system of internal
controls and risk
management systems; and
oversees the TCFD
assurance process.
Nomination
Committee
monitors the balance of skills,
knowledge, independence,
experience and diversity on
the Board and its
Committees and ensures
orderly succession to both
Board and management
positions.
Safety and
Sustainability
Committee
monitors the Group’s social,
ethical, environmental and
safety performance, and
oversees all sustainable
development issues on
behalf of the Board.
Remuneration
Committee
is responsible for Group
Remuneration Policy, and
setting pay levels and
bonuses for senior
management in line with
individual performance.
It ensures safety and
sustainability KPIs are
included in remuneration
packages.
` Further details on page 94
` Further details on page 100
` Further details on page 98
` Further details on page 102
Group CEO
The Group CEO takes ultimate responsibility for delivering on strategy and operating performance.
` See biographies on page 87
Senior management
Our senior management team provides leadership in specific areas of responsibility.
ESG is integrated into every aspect of governance
Finance
• Ensure effective
reporting processes
• Monitor annual budgets
for ESG activities
• Ensure funds to develop
new projects (including
green and sustainability-
linked financing)
Marketing/sales
• Work closely with
offtakers and buyers of
the finished product to
ensure liquidity and
uninterrupted sales
Introduce ESG clauses
in contracts
•
Exploration/mineral
resources
• Enable long-term
economic growth
through greenfield and
brownfield exploration
• Comply with safety and
environmental standards
at exploration sites
•
Development/
construction
• Use global best practice
in design and
commission of mining
and processing
operations
Increase supply chain
efficiency through linking
production demand with
inventory levels
Operations
• Ensure consistent work at
all our mines and
production facilities
• Set safety and
•
environmental targets and
monitor performance
Increase resource
efficiency and decrease
environmental footprint
Communication
and PR
•
Identify and engage with
the majority of external
stakeholders, including
government and regional
authorities, local
communities, suppliers
and NGOs
• Foster engagement with
employees
HR
Legal
• Attract and retain talent
by providing decent
terms of employment
• Ensure employee
training and
development
• Provide fair and inclusive
work environment and
deliver on diversity
targets
•
Implement monitoring
and compliance-control
procedures related to the
provisions of applicable
laws and requirements,
including sanctions
• Ensure implementation of
recommendations of
regulators, corporate
governance standards
and the Group’s internal
policies and procedures
Roles of the Chair, Group CEO and Senior Independent Director
The Board has approved the division of responsibilities between the Chair and the Group CEO,
and defined the role of the Senior Independent Director.
Chair
Group CEO
Vitaly Nesis S&S
The Company seeks a new Chair. Whilst the process is ongoing,
SID takes responsibility for ensuring there are no gaps in
performing the role of the Board. The Chair reports to the Board
and is responsible for the leadership and overall effectiveness of
the Board and for setting the Board’s agenda.
The Group CEO exercises his role through his Executive and/or
Director positions in the Group sub-holding companies.
He reports to the Board directly and upholds the Group’s
responsibilities to its shareholders, customers, employees and
other stakeholders.
Chair’s responsibilities include:
• Effective running of the Board
• Ensuring that there is appropriate delegation of authority to
Executive Management
• Promoting a culture of openness and debate between the
Executive and Non-Executive Directors
• Ensuring that the Directors receive accurate, timely and clear
information
• Ensuring that the views of the shareholders are
communicated to the Board as a whole.
The Group CEO’s responsibilities include:
• Developing Group strategy, including communicating annual
plans and commercial objectives to the Board
Identifying and executing strategic opportunities
•
• Reviewing the operational performance and strategic
direction of the Group
• Making recommendations on remuneration policies, terms of
employment and effective succession planning for senior
employees
• Ensuring effective communication with shareholders and that
appropriate, timely and accurate information is disclosed to
the market, with issues escalated promptly to the Board.
The Board
Senior Independent
Director
Evgueni
Konovalenko
N A R S&S Sp
The Senior Independent Director (SID)
makes himself available to all
shareholders in order to hear their views
and help develop a balanced
understanding of their issues and
concerns. The Board is regularly
updated on shareholders’ opinions
following meetings with the Directors and
management.
SID’s responsibilities include:
• Being available to major shareholders
in order to listen to their views and
help develop a balanced
understanding of their issues and
concerns
• Acting as an intermediary for the
other Directors if necessary.
Independent
Non-Executive Directors
Janat Berdalina
Steven Dashevsky
Pascale Jeannin Perez
Richard Sharko
The Independent Non-Executive Directors
are determined to be independent in
character and judgement, and free from
relationships or circumstances that may
affect or could appear to affect their
judgement. Their role is to challenge the
strategy and scrutinise the performance
of management in meeting agreed goals
and objectives, to monitor the reporting of
the Company’s performance, to review
the integrity of financial information and
ensure that internal financial controls and
risk management systems are robust and
defensible. They determine the
appropriate level of remuneration for the
Group CEO and have a primary role in
appointing and, when necessary,
removing him.
Separate meetings are held between the Independent Non-Executive Directors without the Group CEO being present. This includes
both formal and informal meetings.
Heads of operations
At our operating mines and development properties implement and monitor corporate systems,
supported by dedicated teams.
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Audit and Risk Committee report
Given the current state of the market,
the Committee devoted much its attention
during the year to reviewing the Company’s
risk profile.”
Steven Dashevsky
Chair, Audit and Risk Committee
Audit and Risk Committee
Steven
Dashevsky
Evgueni
Konovalenko
Rich Sharko
Meeting attendance
Steven Dashevsky
9/9
Evgueni Konovalenko 9/9
Richard Sharko
Paul Ostling1
9/9
3/4
1 Member until 18 June 2023 (resigned from his position as an
Independent Non-Executive Director of the Company).
The Committee met without management present on three
occasions with external auditors and twice with the internal
auditor.
The Audit and Risk Committee is an independent body,
consisting only of Independent Non-Executive Directors with
relevant skills and experience in financial reporting and risk
management.
The Committee is attended (by invitation) on a regular basis
by the Board Chair, CFO, Head of Financial Control, Head of
Reporting, Head of Internal Audit, heads of legal and security
departments and the statutory auditor. In the reporting
period, all members of the Committee had financial
experience and competence relevant to the sector in which
the Company operates: Mr Sharko has competence in
accounting and Messrs Dashevsky and Konovalenko have
competence in finance.
The Board considers that the composition and work of the
Audit and Risk Committee complies with the requirements of
the AIFC regulations, in particular with Corporate
Governance Principles set out in the AIFC Market Rules and
continues to comply with the UK Corporate Governance
Code on a voluntary basis.
` For further detail on biographies and Board experience:
pages 86-87.
Accurate, balanced and understandable
The Board has overall responsibilities to ensure the integrity and
independence of the financial reporting process. Both the Board
and the Audit and Risk Committee are satisfied that the Integrated
Annual Report is accurate, balanced and understandable, and
provides the information necessary for shareholders to assess the
Group’s position, performance, business model and strategy. The
Committee ensured that the Company applied the following robust
process:
• Clear instructions and a timeline are provided to all participants
in the annual reporting process. All regulatory requirements and
best practice recommendations are monitored and
communicated to the participants on an ongoing basis.
• Members of all Board Committees review the relevant sections
of the Integrated Annual Report to ensure that the key
messages and information disclosed are aligned with the
Company’s strategy and performance, and are consistent with
their understanding of the Company’s business.
• The Committee, management and external auditors hold an
early-warning conference call to review critical accounting
judgements and estimates and to discuss any significant issues
related to the consolidated financial statements in advance.
• The Committee reviews the disclosure of Alternative
Performance Measures (APMs) to ensure appropriate
prominence of APMs and IFRS measures and their
presentation throughout the Integrated Annual Report.
A guide to APMs can be found in the Alternative performance
measures section on pages 168-169.
• The Committee reviews the Integrated Annual Report and
financial statements – including significant accounting issues
explained in the notes to the consolidated financial
statements, based on its knowledge, discussions,
management papers or other interactions with management,
as well as the conclusions of external auditors – and
recommends them to the Board for approval.
In mid-March, the preliminary financial statements are
approved and authorised for issue by the Board to ensure
timely disclosure of financial information.
In late March, the Integrated Annual Report is approved by
the Board for publication on the Company’s website and
circulation to its shareholders. Ultimate responsibility for
reviewing and approving the interim and annual financial
statements remains with the Board.
•
•
Integrity of
financial
statements
Key responsibilities
Focus during 2023
• Monitoring the integrity of the Group’s
consolidated financial statements
• Approved budget for 2023
• Reviewed and recommended for approval financial and risk
• Reviewing financial statements, including the
consistency of accounting policies across the
Group, the methods used to account for
significant transactions, the reasonableness
of significant estimates and judgements and
the clarity and completeness of disclosure
information included in the Integrated Annual Report 2022 and
Polymetal’s half-yearly results for the six months ended 30 June
2023
• Supervised preparation of the longer-term viability statement
and the going-concern analysis
• Reviewed major assumptions/risks discussion for annual
financials (asset impairment, net realisable value analysis of
metal inventories, significant transactions, valuation of
contingent consideration assets and liabilities, changes in
accounting policy)
• Reviewed all information in the Integrated Annual Report and
considered its accuracy/consistency with the financial
statements
• Overview of corporate transactions for 2023
• Reviewed TCFD assurance status
Internal
controls and
risk
management
• Reviewing the effectiveness of the Group’s
system of internal controls and risk
management and ensuring shareholders’
interests are properly protected
• Reviewed the critical risks and exposures, including significant
judgements, findings, impairments and tax risks; discussed
emerging risks
• Reviewed legal compliance report, recent tax judgements and
• Monitoring and reviewing the effectiveness of
other potential exposures
the Group’s internal audit
External
auditor
• Making recommendations to the Board on
the appointment or removal of the Group’s
external auditor
• Reviewing the effectiveness of the external
audit process
• Reviewing the independence and objectivity
of the external auditor and the
appropriateness of the provision of any
non-audit services
Policies and
procedures
• Reviewing the Group’s policies and
procedures for preventing and detecting
bribery and fraud, and the systems and
controls in place to ensure that the Group
complies with relevant regulatory and legal
requirements
• Reviewed security department’s incident reports, including
whistleblowing and reports to the external hotline
• Reviewed re-structuring process of the internal audit function
• Reviewed reporting from internal auditors on key controls and
approved internal audit plan
• Performed an in-depth review of several subsidiaries
• Reviewed approach to hedging
• Organised tender for the appointment of the new statutory
auditor
• Approved the terms of external audit engagement (including
scope) and the Group’s external audit plan
• Reviewed audit planning report for 2023 year end
• Reviewed the actual external audit fee in 2023 and compared
with the authorised amount
• Reviewed the independence and effectiveness of the external
auditor
• Reviewed non-audit services (including interim review and
TCFD reporting)
• Supervised compliance with the Company’s Anti-Bribery and
Corruption, Whistleblowing, Treasury and other policies and
procedures
• Supervised compliance with sanctions
• Reviewed approach to related and connected party
transactions
• Reviewed the work plan for 2024
Significant issues related to the financial
statements
The Committee assesses whether suitable accounting policies
have been adopted and whether management has made
appropriate estimates and judgements, in particular on the key
issues and areas of judgement listed below as being business-
sensitive. The Committee has also reviewed detailed external
auditor reports outlining audit work performed and any issues
identified in respect of key judgements (see the independent
auditor's report on pages 120-123).
Reassessment and impairment
of Amursk POX CGU
In 2023 the Group recognised an impairment charge of
$165 million in respect of Amursk POX, due to continued use of
Amursk POX processing facility to treat Kyzyl refractory
concentrate on the terms of a new tolling agreement, as entailed
by provisions of JSC Polymetal divestment. See Note 3 to the
consolidated financial statements on page 139.
The Committee examined the comprehensive analysis prepared by
management for the changes in the mode of assets utilisation that
generate a revenue stream of Amursk POX, including continued
use of Amursk POX processing facility to treat Kyzyl refractory
concentrate on the terms of tolling agreement, as entailed by
provisions of JSC Polymetal divestment.
The Committee concluded that Amursk POX became a separate
cost generating unit and management assumptions in regard to
the future use of the asset are reasonable and supportable.
Veduga joint venture сorporate transaction
In 2023 the Group disposed of the stake in Amikan LLC (holder of
Veduga deposit licence), which resulted in loss of control over
subsidiary, as described in Note 3 to the consolidated financial
statements on page 140. Subsequently, the investment is
accounted for using the equity method.
The Committee reviewed the accounting treatment for the
transaction, challenged the key judgements made by management
and concluded that these were made appropriately and
consistently.
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Audit and Risk Committee report continued
Internal controls and risk management
Risk management
In order to ring-fence the Group’s Russian subsidiaries and ensure
sanctions compliance, the management of all Russian operations
was therefore delegated to the executives of JSC Polymetal, while
the Board and management of Polymetal International remained
focused on the operations of those assets located in Kazakhstan.
No materials containing information related to JSC Polymetal were
subject to the Audit and Risk Committee and Board discussion,
consideration, resolution or whichever other form of decision-
making.
The Committee considered whether the description of the
Company’s strategy, business model, principal risks and
uncertainties and future plans were consistent with the
understanding of the Board, and whether the controls over the
consistency and accuracy of the information presented in the
Integrated Annual Report are fair and robust. The scope excludes
JSC Polymetal and its subsidiaries since its entire decision-making
process came under the remit of the management of
JSC Polymetal due to sanctions.
Risk management approach and risk assessment is the
responsibility of the Board and is integral to the achievement of the
Group’s strategic objectives. The Board is satisfied that there is an
ongoing process, which was operational during the year and up to
the date of approval of the Integrated Annual Report, for
identifying, evaluating and managing the principal and emerging
risks faced by the Group, as described on page 69.
The Board takes account of material changes and trends in the
risk profile, including robust assessment of the Company’s
emerging risks, and considers whether the control system,
including reporting, adequately supports the Board in achieving its
risk management objectives. The Group’s Risk Management Policy
and the internal guidelines of key business processes ensure that
the procedures are embedded in all of Polymetal’s systems and
processes, and that the Company’s responses to risk remain
current and dynamic.
The Group enforces a responsible risk-awareness business culture
throughout all Group entities to identify, assess and mitigate
principal risks and to keep residual risk at an acceptable level. The
Audit and Risk Committee assists the Board with its assessment of
the Group’s principal risks and its review of the effectiveness of the
risk management process. During its meetings throughout the
year, the Committee reviews the reports on Group-level risk
profiles and controls that are in place. Mr Dashevsky is also a
member of the Safety and Sustainability Committee, which
ensures continuity between the workings of both Committees.
The Group has implemented enterprise and operational policies
and controls to manage risks that may affect the achievement of
the Group’s strategic objectives. Transaction-level internal controls
are designed to enhance the value of operational-level objectives
and accountability of new projects and initiatives.
In conducting its annual review of the effectiveness of risk
management and the internal control system (including financial,
operating and compliance controls), the Board and Committee
consider the key findings from the ongoing monitoring and
reporting processes, management representations and
independent assurance reports. Management provides a timely
response to issues raised by internal audit. Where possible, the
issues are resolved within one reporting period.
` Further details of the Group’s Risk Management Framework
and risk governance are provided on pages 68-71.
Internal audit (IA)
The IA Department supports the Board, through the Audit and Risk
Committee, in evaluating the Company’s and the Group’s
governance framework. It also aims to raise levels of understanding
and awareness of risk and control throughout the Group.
Internal auditor maintains organisational independence from Group
management by reporting to the Audit and Risk Committee on
substantive matters and to the Group CEO for administrative
purposes; the internal auditor additionally reports his findings to
the members of the Group’s executive management. Any potential
conflicts of interest should be disclosed by the internal auditor as
they arise; internal auditor is not allowed to audit areas where he
has held operational roles in the previous 12 months.
Assessing the effectiveness of internal audit
The IA Department’s annual work plan is approved by the Audit
and Risk Committee. It is based on a risk tolerance evaluation that
ensures the achievement of the Group’s operating objectives and
focuses on the principal risks of the Group’s risk profile. The head
of IA reports to the Board through the Audit and Risk Committee.
The KPIs of the head of IA are completion of work in accordance
with the approved plan, quality of audits and the number of
follow-up audits, where agreed recommendations have been
implemented.
In addition to the Audit and Risk Committee assessment, the
internal auditor uses an annual self-certification process, which
requires managers throughout the Group to personally confirm the
testing of internal controls and compliance with Group policies
within their business or function, as well as the steps taken to
address actual or potential issues that are identified. The results of
self-certification as well as management response thereto are
provided to the Committee along with other reports on the IA
activities.
Internal control framework and activities
The management structure of the Group and internal policies and
procedures are aimed at maintaining a robust control framework
within the Group to encourage the achievement of strategic
objectives within set risk tolerance levels. This framework includes:
• An appropriate tone set from the top (Board level), aimed at
building the appropriate control environment and ethical climate
• Management support of a comprehensive risk management
system (for more detail refer to pages 68-69)
• Strong segregation of duties including internal controls over
sensitive transactions
• Specific control activities implemented at all levels of the Group
• A periodic review of the effectiveness of internal controls.
The governance framework reflects the specific structure and
management of the Group, where authority and control are
delegated by the Board to different levels, from senior
management to the managers of the Group’s operating entities,
and then cascaded down to business and project managers as
appropriate. Within this framework, authority is delegated with
clearly prescribed limits and decisions are escalated where either
project size or risk profile require a higher level of authority. In
addition to controls operating at transaction level (production,
exploration, construction, procurement), the control framework
also includes a set of general procedures for transaction approval,
financial accounting, reporting and budgeting.
96
The Board confirms that the actions it considers necessary have
been or are being taken to remedy any failings or weaknesses in
the Group’s system of internal controls. Based on the results of the
review of risk management and internal control activities
undertaken by the Board and the Audit and Risk Committee, the
Board considers that the risk management and internal control
systems are in accordance with the relevant principles and
provisions of the AIFC Market Rules (including Corporate
Governance Best Practice Standards), AIX Business Rules and
other applicable guidance.
Audit quality
Auditor independence
Each year, the auditors are required to confirm in writing to the
Committee that they have complied with the independence rules of
their profession and regulations governing independence, and that
they have complied with the requirements of the Company’s policy
on the provision of non-audit services. The external auditor is
required to maintain appropriate records to provide reasonable
assurance that its independence from the Company is not
impaired.
The Group’s Risk Management Framework is considered effective
if it complies with the following parameters:
• A special audit procedure proves that all elements of the Risk
Management Framework are consistent with the COSO
components and are in line with the Group’s Risk Management
Policy
• At least 75% of the Risk Management Framework’s elements
are assessed as ‘Strong’ or ‘Good’
• Management’s reports on internal controls demonstrate that
•
there are no weaknesses in the controls and Risk Management
Framework which might have significant consequences for the
Group
Internal audits carried out in accordance with the approved
internal audit plan have revealed no weaknesses in the controls
and Risk Management Framework which might have significant
consequences for the Group.
If one or more of the Risk Management Framework elements are
found to be inadequate or there is direct evidence of the
ineffectiveness of the Risk Management Framework, the head of IA
function informs the executive management and reports to the
Audit and Risk Committee and the Board of Directors, as
appropriate. No such reports were made in 2023.
External auditor appointment and audit tender
Further to the re-domiciliation of the Company from Jersey to the
Astana International Financial Centre (AIFC), MHA MacIntyre
Hudson (an independent member of Baker Tilly International
Limited) was no longer able to continue as Group Auditor because
it is not registered to provide such services in the AIFC. The Audit
and Risk Committee held a competitive tender process in
compliance with the Competition and Markets Authority
regulations, AIFC Companies Regulations and other applicable
regulatory requirements.
As a result of an evaluation of the tender participants, engaging
JSC Business Solutions and Technologies as the Group auditor
was considered the preferred option and this appointment was
approved by the shareholders at the Company’s AGM held on 25
July 2023. JSC Business Solutions and Technologies served as
the component auditor for the Integrated Annual Report for the
year ended 31 December 2022. The Company’s Directors were
authorised by the shareholders to determine the level of the
auditors’ remuneration for the ensuing year.
The new Group auditor’s initial engagement was the review of the
H1 2023 interim financial statements, published on 25 September
2023 and, thereafter, the annual audit for the year ended
31 December 2023.
Review of the effectiveness of the external audit
process and audit quality
The Audit and Risk Committee has adopted a formal framework in
its review of the effectiveness of the external audit process and
audit quality, which focuses on the following areas:
• The audit partner, with particular focus on the lead audit
engagement partner
• The audit team
• Planning and scope of the audit and identification of areas of
audit risk
• Execution of the audit
• The role of management in an effective audit process
• Communications by the auditor with the Audit and Risk
Committee, and how the auditor supports the work of the Audit
and Risk Committee
• How the audit contributes insights and adds value
• The independence and objectivity of the audit firm and the
quality of the formal audit report to shareholders.
An auditor assessment is completed annually by each member of
the Audit and Risk Committee and by the CFO by way of formal
meetings. Feedback is also sought from the Group CEO, other
members of the finance team, divisional management and the
head of IA. The feedback from this process is considered by the
Audit and Risk Committee, and is provided both to the auditor and
to management. Action plans arising are also reviewed by the
Committee.
The effectiveness of management in the external audit process is
assessed principally in relation to the timely identification and
resolution of areas of accounting judgement, the quality and
timeliness of papers analysing those judgements, management’s
approach to the value of the independent audit, the booking of
audit adjustments arising (if any) and the timely provision of draft
public documents for review by the auditor and the Audit and Risk
Committee.
Committee evaluation
In 2023, the Committee carried out a comprehensive self-
evaluation of its performance. Members of the Committee
completed a thorough assessment questionnaire on the work of
the Audit and Risk Committee and other related issues, including
the quality of the internal and external audit.
Based on the assessment results, the areas that needed attention
were aggregated and incorporated into the 2024 Committee
work plan:
Key areas for discussion:
• Risk management, focus on sanctions-related risks and
compliance
• Divestment and accounting approach
• Asset valuation
• Annual reporting post-re-domiciliation.
Areas for improvement:
• Ongoing training
• Enhanced communication with management.
Work with external auditor:
• Facilitate an ongoing dialogue with the auditor.
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Sustainability
Safety and Sustainability Committee report
Decarbonisation is important
for maintaining the strategic
sustainability of the business.”
Janat Berdalina
Chair, Safety and Sustainability Committee
The Safety and Sustainability Committee comprises four
Directors. The Committee members’ experience includes a
wide range of sustainability issues, such as health and safety,
operational risk management, environment, energy
management and climate change.
Members of the Safety and Sustainability Committee attend
those sections of Audit and Risk Committee meetings dealing
with risk.
` For further details of biographies and Board experience,
see pages 86-87.
This report is prepared in accordance with the requirements of the
Global Reporting Initiative (GRI) and the Metals&Mining Standard
published by the Sustainability Accounting Standards Board (SASB),
providing comprehensive disclosure of non-financial information for
the Group’s enterprises in Kazakhstan and general information on
key aspects of sustainable development for the Group as a whole.
Safety competence and management
The Safety and Sustainability Committee oversees the
implementation of the Group’s zero-harm approach, which is aimed
at achieving the goal of zero fatalities and continuous reduction of
frequency and severity of lost-time injuries. This includes
improvements in risk management procedures, the application of
digital technologies and promoting a safety culture. The Committee
annually reviews critical safety risks, evaluates the effectiveness of
safety measures and monitors the investigation of work-related
incidents involving our employees or those of contractors operating
at our sites. This robust approach resulted in zero fatalities in 2023
among the Group’s employees and contractors in Kazakhstan; nor
were any lost-time injuries recorded.
Janat Berdalina
Vitaly Nesis
Steven
Dashevsky
Pascale
Jeannin Perez
Meeting attendance
Janat Berdalina
Vitaly Nesis
1/1
1/1
Steven Dashevsky
Pascale Jeannin Perez
1/1
1/1
The Committee oversees the Group’s sustainability profile and
responsible for the following matters:
• Monitoring and reviewing the safety, health and sustainability
performance of the Group
• Reviewing the climate strategy, including the implementation of
green projects and the development of a net-zero approach
• Tailings management, including the implementation of the
Global Industry Standard on Tailings Management
• Reviewing and considering the implementation of Best Available
Techniques (BAT) in areas such as water, GHG emissions,
energy, etc., including technologies relevant to the Ertis POX
project
• Adjusting and boosting social programmes for mentoring,
inclusion and diversity
• Providing support in designing an approach to full-scale
biodiversity management and disclosure, taking into account
the recommendations of the Task Force on Nature-related
Financial Disclosures (TNFD).
Overseeing climate strategy
In 2023, Polymetal continued the implementation of its strategic
priorities in the field of sustainable development, providing detailed
disclosure about the progress made in achieving its goals in the
areas of health and safety, social engagement, environmental
protection and climate within the Integrated Annual Report. Since
May 2023, the Committee has focused on the strategic
development and adaptation of the Group’s undertakings in
Kazakhstan.
Key responsibilities
Focus during 2023
Health & safety • Receives reports from management on
• Health and safety (H&S) work plan for 2023, key risks
assessment
• H&S performance update
• Safety incidents and accidents.
• Review of the sustainability-related disclosures in the Integrated
Annual Report 2022
• Tailings management update
• Sustainability update (current approach to reporting and
ratings, update on ESG projects, reporting timeline)
• Sustainability KPI discussion
• Forest Carbon project
• Non-financial auditor appointment, scope update.
• Kazakhstan team introduction and division of responsibilities
• Modern Slavery Statement and implementation of the Modern
Slavery Policy
• Group policies review and recommendation for Board approval
• Review of the Committee’s performance and its terms of reference
• Review of the work plan for 2024.
ESG remuneration components
In line with the Company’s enhanced emphasis on ESG, the KPI
structure for the Group CEO includes a 15% ESG KPI. The
sustainability/ESG KPI is defined each year by the Safety and
Sustainability Committee in line with the Group’s long-term targets
and is based on a comprehensive scorecard. To ensure consistent
application and measurable results, the ESG KPI cascades down to
all relevant employees: Group CEO, COO, mine directors, subsidiary
directors and their deputies, senior managers in the management
company and heads of the main operational units and their
deputies.
The ESG KPIs for 2023 were approved at the beginning of the year.
The calculation of the annual bonus for the Group CEO and relevant
management was conducted in accordance with these metrics. It
should be noted that the KPIs for 2024 have been redefined and
now exclusively encompass indicators and projects related to the
Group’s enterprises in Kazakhstan. Further information is available in
the Remuneration Report on pages 102-112.
significant safety, health and sustainability
issues
• Oversees management’s interaction with
regulatory authorities on safety, health and
sustainability matters
• Reviews and monitors the safety, health and
sustainability performance of the Group
• Considers whether an independent audit of
processes is appropriate and reviews audit
results and findings on health, safety and
sustainability, the action plans pursuant to the
findings and the result of investigations into
significant events.
• Oversees the Company’s overall approach to
sustainability, including the establishment and
periodic review of the safety, health and
sustainability strategy and policies
• Receives regular updates from management
regarding compliance with safety, health and
environmental legislation and internal targets
• Сommitment to the principles of the
International Council on Mining and Metals
and the UN Global Compact regarding
sustainable development and the policies and
systems in place to monitor such compliance.
Ethical conduct • Ensures that the Company consistently
exhibits and promotes ethical, transparent
and responsible behaviour, engages with key
stakeholders and communities, and
contributes to the development and growth of
healthy and sustainable communities
• Monitors the effectiveness of the safety,
health and sustainability policies, systems,
risk management programmes and
processes in place
• Liaises with the Audit and Risk Committee
and internal audit function, oversees the
implementation of the safety, health and
sustainability risk management and internal
control procedures
• Reviews the benchmarking of the policies,
systems and monitoring processes.
Climate issues remains at the center of our focus
In this report, Polymetal reaffirms its commitment to previously set
goals for reducing greenhouse gas emissions to keep the average
global temperature significantly below 2°C above pre-industrial
levels. To achieve these goals, Polymetal has focused its efforts on
implementing climate projects in Kazakhstan. This primarily
involves the construction of our own sources of renewable and
low-carbon energy, increasing energy efficiency and the phased
electrification of our mobile fleet.
This report provides information on specific projects to reduce
greenhouse gas emissions at the Group’s enterprises in
Kazakhstan, outlining approaches to climate risk management and
opportunities. See pages 56-61 for further details.
The qualitative and quantitative data presented herein are prepared
taking into account the TCFD recommendations and complement
the annual disclosure of information under the CDP initiative.
Significant changes in external conditions and the divestment of
JSC Polymetal and its subsidiaries in Russia prevented us from
finalising the development of goals for achieving carbon neutrality
(including direct and indirect emissions) and for reducing emissions
within Scope 3. Nevertheless, Polymetal recognises the
importance of decarbonisation for maintaining the strategic
sustainability of the business in the long term and commits to
completing this work, after the completion of the Group’s
restructuring and publishing an updated Climate Strategy for the
achievement of carbon neutrality.
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Following divestment, the Nomination
Committee’s attention will be focused
on continuing operations in Kazakhstan and
how to effectively support the leadership team.”
Evgueni Konovalenko
Chair, Nomination Committee
Nomination Committee
Evgueni
Konovalenko
Janat Berdalina
Pascale
Jeannin Perez
Meeting attendance
Evgueni Konovalenko
3/3
Pascale Jeannin Perez 3/3
Janat Berdalina
Paul Ostlin1
3/3
1/1
1 Member until 18 June 2023 (resigned from his position as an
Independent Non-Executive Director of the Company).
The Nomination Committee comprises three Independent
Non-Executive Directors, who have no personal financial
interest in the matters to be decided.
The Board considers that the composition and work of the
Nomination Committee complies with the requirements of the
AIFC regulations, in particular with Corporate Governance
Principles set out in the AIFC Market Rules and continues to
comply with the UK Corporate Governance Code on a
voluntary basis.
` For further detail on biographies and Board experience:
pages 86-87.
Board and executive succession
During 2023, there were no major changes to the Board
composition. While a great deal of Board attention has been
focused on the divestment of JSC Polymetal and its subsidiaries,
the Committee ensured that it was able to carry out its supervisory
role effectively. The Board has discussed the timing of new Board
appointments, in particular that of finding a new Chair. It was
agreed that it would be premature to initiate such a search prior to
the completion of the divestment in March 2024, when the focus
will be on the independent operations in Kazakhstan and the
Committee’s role in supporting the leadership team.
The current Board members continue to bring to the table a
combination of the skills required to cover all of Polymetal’s
strategic objectives, including business strategy, finance, mining
and sustainability, investment banking and governance.
The Committee continues to review the Non-Executive needs of
the Board to ensure a balance of skills, diversity and experience as
well as compliance with various regulatory requirements.
The Nomination Committee continues to pay close attention to the
matter of executive succession. While there are no current
concerns about the need for immediate executive succession,
contingency planning is essential. The Committee reviews plans
annually to ensure uninterrupted business operations.
In 2024, the Committee will continue monitoring the executive
succession programmes. Mining is not excluded from the severe
staff shortages experienced across all industries globally. The
Nomination Committee continues to monitor the human capital
development programmes, starting from grassroots initiatives in
schools, continuing through apprenticeship programmes,
professional colleges and close cooperation with universities and
paying attention to attracting and retaining young professionals.
Board diversity
We continue to focus on diversity. Ensuring we have sufficient
gender, cultural, ethnic and experiential diversity is critical if we are
to avoid ‘Group think’. We have a 33% female representation on our
Board and our ethnic spread is diverse. Our Board comprises
people with a wide range of experience and skills from very different
backgrounds. The level of female representation is in line with that
recommended by the FTSE Women Leaders Review;
the Nomination Committee is committed to having at least two
female members on the Polymetal Board of Directors. Janat
Berdalina is a Kazakh, who identifies herself with and has evident
heritage from Central Asia.
Board structure
review and
evaluation
Key responsibilities
Focus during 2023
• Leads a formal, rigorous and transparent
• Reviewed requirements of Independent Non-Executive Director
process for Board appointments
succession
• Regularly reviews the Board structure, size
• Discussed approach to strengthening the Board following the
and composition, and makes
recommendations to the Board about any
changes
divestment of JSC Polymetal and its subsidiaries
• Reviewed the time required from Non-Executive Directors
• Continued to review the skills and experience of the Board, term
• Makes recommendations to the Board
limits of Directors, concept of independence
about the Directors’ re-appointment at the
end of their term of office
• Reviews the results of the Board
performance evaluation that relate to the
composition of the Board and individual
Directors
• Reviewed the structure, size and composition of all Committees,
including skills, knowledge, experience and diversity, and made
recommendations to the Board about changes
• Made recommendations to the Board about the re-election of
Directors at the AGM
• Led review of the internal evaluation of the Board and all
Committees
Leadership and
conflicts of
interest
• Keeps both Executive and Non-Executive
leadership needs of the Group under
review
• Kept the Executive leadership needs of the Group under review in
order to ensure the continued ability of the Group to compete
effectively in the marketplace
• Requires Directors and proposed
• Continued succession discussions at Executive level, including
Diversity and
governance
appointees to the Board to disclose any
conflict of interest or significant
commitments, with an indication of the
time involved
• Requires Directors to apply for approval
before undertaking additional external
appointments
• Leads on diversity and provides a
statement of the Board’s policy on
diversity, including gender and ethnicity,
any measurable objectives that it has set
for implementing the policy and progress
on achieving objectives
• Focuses on the Company’s approach to
succession and planning, and how both
support developing a diverse pipeline
• Reviews the Company’s gender balance
within the Group leadership team
support in developing a diverse pipeline
• Analysed the Executive management structure
• Discussed diversity highlights, including the policy on diversity
and inclusion, how it had been implemented and progress on
achieving objectives
• Performed internal evaluation of the Committee
• Reviewed the Committee’s terms of reference
• Reviewed the work plan for 2024
Board Diversity Policy – objectives and progress
against targets
Polymetal’s Diversity and Inclusion Policy includes a section on
Board diversity. The key objective of this is to ensure a fair and
unbiased process when recruiting new Board members. Board
diversity is addressed as part of the Board succession
programme.
Polymetal is committed to the principles of non-discrimination,
inclusion and diversity for both the Board and its employees. All have
equal opportunities regardless of gender, age, race, nationality,
language, origin, wealth, residence, religion and other beliefs, social
or other personal circumstances. The Company’s Code of Conduct
and Diversity and Inclusion Policy outline the principles and
approach to diversity and prohibits any discrimination. Regular
compliance monitoring is undertaken by the HR department to
ensure that our internal procedures are implemented throughout all
Group companies. No instances of discrimination were reported in
2023. The Group is in full compliance with all local legislation in the
countries where it operates that prohibit any discrimination in
payment and promotion.
As of the date of this report, senior management of the Company
comprised 27% females.
The Group mentoring programme, facilitated by the Board in 2022,
continued successfully throughout 2023. The aim is to encourage
the professional development of selected employees and, as part of
this, mentoring is provided by the Group’s top management.
Objective
Progress
Consider candidates with little
or no previous Board
experience in public
companies for appointment as
Non-Executive Directors.
Two female Directors, Janat
Berdalina and Pascale Jeannin
Perez, did not have any previous
significant Board appointments.
Ensure that females form at
least one-third of the Board.
Ensure that at least one
Director is from an ethnic
minority background.
Work with recruitment
consultancies that have
signed up to the Voluntary
Code of Conduct for Executive
Search Firms.
Ensure that a diverse
executive pipeline is
developed within the Group.
33% of the Board members are
female. Succession process is
ongoing.
One Director is from an ethnic
minority background.
There is an ongoing review of the
search firm currently engaged with
the expectation that consultants
should be signatories to the
Voluntary Code of Conduct on
gender diversity and best practice.
At Nomination Committee
meetings, the Directors consider
diversity and inclusion within the
Group and there is an enhanced
focus on diversity within talent
development programmes.
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Since receiving shareholder
approval at the 2023 AGM,
we have implemented the rules of the
new Remuneration Policy.”
Richard Sharko
Chair, Remuneration Committee
Remuneration Committee
Richard Sharko
Janat Berdalina
Evgueni
Konovalenko
Meeting attendance
Richard Sharko1
2/2 Evgueni Konovalenko 3/3
Janat Berdalina
3/3 Paul Ostling2
1/1
1 Member from 15 March 2023, Chair from 19 June 2023.
2 Chair until 18 June 2023 (resigned from his position as an Independent
Non-Executive Director of the Company).
The Remuneration Committee comprises three Independent
Non-Executive Directors who have no personal financial interest
in the matters to be decided. The Committee is chaired by Mr
Sharko and its other members are Mr Konovalenko and Ms
Berdalina.
The Board considers that the composition and work of the
Remuneration Committee complies with the requirements of
the AIFC regulations, in particular with Corporate Governance
Principles set out in the AIFC Market Rules and continues to
comply with the UK Corporate Governance Code on a
voluntary basis.
` For further detail on biographies and Board experience:
pages 86-87.
Directors’ Remuneration Policy
Summary table
At the 2023 AGM on 25 July 2023, the Committee received shareholder approval of the following Remuneration Policy to cover a period
of three years. The Policy has been applied since the date of approval.
Element and
purpose/link
to strategy
Operation
Opportunity
Performance metrics used and
period applicable
Executive Director – Group CEO
Base salary
To attract
and retain
high-calibre
executives
Pension
To provide
funding for
retirement
The Committee reviews the base
salary on an annual basis and, when
setting base salary for the following
year, takes into account general
economic and market conditions,
underlying Group performance, the
level of increases made across the
Group as a whole, the remuneration
of executives in similar positions in
companies of a similar size and
global mining peers, and individual
performance.
The Group does not fund any
pension contributions or retirement
benefits, except contributions to the
mandatory pension fund as required
by law (where applicable).
The Group pays defined
contributions to the mandatory
pension fund. This permits retiring
employees to receive a defined
monthly pension for life from the
statutory pension fund.
Not applicable.
Over the policy period, the base salary
for the Group CEO will be set at an
appropriate level within the peer group
and will increase in line with base salary
increases for the wider workforce,
except where a change in the scope of
the role occurs.
The annual base salary for the reporting
year and the current year is set out in
the Annual Report on Remuneration on
page 110.
Pension contribution does not exceed
the mandatory social contribution paid
in the Republic of Kazakhstan.
Not applicable.
Benefits
The Group does not provide any
benefits for its Group CEO.
Not applicable.
Not applicable.
Key responsibilities
Focus during 2023
• Determining, within agreed terms of reference,
the remuneration of the Chair and specific
remuneration packages for the Group CEO, the
Company Secretary and members of senior
management, including any pension rights and
compensation payments.
• Change to the Remuneration Policy voted on by shareholders
at the 2023 AGM
• Long-term incentive scheme update.
• Making recommendations to the Board on the
• Approach to remuneration: executive remuneration strategy
Group’s policy on the remuneration of executive
management
• Formulating suitable performance criteria for
the performance-based pay of executive
management
• Reviewing and overseeing all aspects of any
executive share scheme operated by or to be
established by the Company.
• Having a duty of care to keep abreast of and
act upon changes in law, regulations and other
published guidelines or recommendations
regarding the remuneration of directors of listed
companies, including formation and operation
of share schemes
• Considering and making recommendations to
the Board concerning disclosure of details of
remuneration packages and structures, in
addition to those required by law or regulations
• Reviewing and advising the Board on any major
changes in employee benefit structures
throughout the Company or the Group.
and structure
• Update of the senior management composition
• 2022 KPI results and 2023 KPI targets
• Approval of senior management bonuses and LTIP results
confirmation that there was no malus or clawback
• Approval of the PSP share issue to the Group CEO.
• Final approval of the Remuneration Report for 2022
• Remuneration governance update, feedback on shareholder
engagement
• Employee remuneration review
• Analysis of labour remuneration conditions
• Review of the Committee’s terms of reference
• Review of the work plan for 2024.
Annual
bonus
To focus on
achieving
annual
performance
goals, which are
based on the
Group’s KPIs
and strategy
The annual bonus result is
determined by the Committee after
the year end, based on performance
against defined targets.
Annual bonuses are paid three
months after the end of the financial
year to which they relate.
50% of the annual bonus earned is
paid in cash and the remaining 50%
is compulsorily deferred into shares,
which are released annually to the
employee over the next three years in
equal instalments through the DSA
plan. Where it is not possible or
practicable to award the deferred
bonus in shares, awards will instead
be made in cash. Any cash award
that is made instead of a share award
would be deferred for a period of
three years, in line with the current
approach for share-based awards.
Clawback and malus conditions
apply to the DSA. No clawback is
applied to the cash part of the annual
bonus.
Details of the DSA are set out on the
next page.
Remuneration
Policy
Remuneration
of executive
management
Governance
and employee
benefit
structures
102
Target bonus opportunity – 100% of
base salary.
Maximum bonus opportunity – 120% of
base salary.
For the Group CEO, the H&S metric
applies as a multiplier to the whole
bonus:
The annual bonus is earned based on the
achievement of a mix of financial and non-financial
measures over the financial year.
For 2023, performance metrics (as described in
detail on page 111) and associated weightings for
each were:
KPI
Weight
20%
• 0 fatalities or severe cases:
Production
1.2x multiplier;
• more than 0 fatalities or severe
cases, but fewer than 3 fatalities or
6 severe cases: multiplier between
0.5x and 1x;
• 3 fatalities or 6 severe cases:
0.5x multiplier.
The Committee has discretion to vary
the list and weighting of performance
metrics over the life of this
Remuneration Policy. In addition, the
Committee has discretion to vary
performance metrics part-way through
a year if there is a significant event,
which causes the Committee to believe
that the original performance metrics
are no longer appropriate.
Total cash cost
20%
Completion of new
projects on time
and within budget
25%
Health and safety
20%
ESG
15%
Total before cap on
maximum bonus
100%
Maximum %
Max achievement
150% (weighted –
30% of base salary)
Max achievement
150% (weighted –
30% of base salary)
Max achievement
110% (weighted –
27.5% of base
salary)
Max achievement
100% (weighted –
25% of base salary)
Max achievement
150% (weighted –
15% of base salary)
127.5%
There is a cap on the overall maximum bonus
outcome – 120% of base salary.
Total
100%
120% of base salary
No discretion was used in 2023.
Details of the metrics distribution for 2023 are
available on page 111.
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Element and
purpose/link
to strategy
Operation
Opportunity
Performance metrics used and
period applicable
Long-Term Incentive Plan (LTIP)
Not applicable.
Maximum grant permitted under the
plan rules is 150% of salary per annum.
Default grant level is expected to be
125% of base salary.
The value that can be received in the
year of vesting will be limited to twice
the face value of the award on grant.
Any gains above this will be forfeit
before the start of the one-year holding
period. In certain exceptional
circumstances, the Remuneration
Committee will be able to use discretion
to disapply the cap. Outstanding award
during 2019 had a default grant level of
150% of salary.
Dividend equivalents will be received on
vested shares, reflecting the value of
dividends that have been paid during
the period from the grant date to the
vesting date.
Deferred
Share
Awards plan
(DSA)
Deferral to
encourage
retention and
alignment with
shareholders’
interests
Performance
Share Plan
(PSP)
To provide
long-term
alignment with
shareholders’
interests by
delivering
sustainable
above-market
shareholder
returns
50% of the annual bonus earned is
paid in cash and the remaining 50%
is compulsorily deferred into shares,
which are released annually to the
employee over the next three years in
equal instalments. Where it is not
possible or practicable to award the
deferred bonus in shares, awards will
instead be made in cash. Any cash
award that is made instead of a share
award would be deferred for a period
of three years, in line with the current
approach for share-based awards.
Clawback and malus provisions
apply for the unvested portion of the
DSA; the Remuneration Committee
may, at any time up to and including
vesting, reduce the number of shares
that vest, should it consider that
misconduct or fraud, material
misstatement of accounts, corporate
failure, serious reputational damage,
or failure of risk management occurs.
Dividend equivalents will be received
on vested shares, reflecting the value
of dividends that have been paid
during the period from the grant date
to the vesting date.
Under the PSP, annual rolling
conditional share awards are made
with a four-year vesting period and an
additional mandatory holding period
of one year following vesting.
Stretch performance targets reward
participants for delivering positive
absolute and superior relative TSR
performance against global peers
over the performance period.
Clawback and malus provisions
apply for the unvested portion of the
PSP, whereby the Remuneration
Committee may, at any time up to
and including vesting, reduce the
number of shares that vest, should it
consider that misconduct or fraud,
material misstatement of accounts,
corporate failure, serious reputational
damage, or failure of risk
management occurs. At the Board’s
absolute discretion, a clawback
provision could be applied in relation
to vested shares.
Retesting of the performance
conditions in future years is not
allowed under any circumstances.
For the period where we cannot
grant shares, we intend to make no
PSP awards to the Executive.
Entitlement to this deferred component is subject
to continued employment over the deferral period.
In normal circumstances, DSAs will continue until
the normal time of vesting upon cessation of
employment due to death, injury, ill-health,
disability, redundancy, retirement, or any other
circumstance which the Committee determines
(Good Leaver Circumstances). Alternatively, the
Board may determine that DSAs will vest
immediately. In both circumstances there would
be no pro-rating of the DSAs for the time from the
award date until cessation of employment or for
performance. The DSA would lapse under other
circumstances.
No performance conditions apply to the DSA
shares as they have been subject to fulfilment of
annual KPIs.
The Committee has the flexibility to set the PSP
metrics each year, with at least 75% of the award
being based on financial metrics.
Vesting is based on the following metrics:
(1) Relative TSR (80% weighting), measured over
four years against the constituents of the FTSE
Gold Mines Index and also on the Company’s
absolute TSR.
Peers are ranked and the Company’s position
determines vesting:
• 0% vests for below median performance
• 20% vests at median performance
• 100% vests at upper quintile performance and
above
• Vesting occurs on a linear basis between
median and upper quintile performance.
No award will vest if absolute TSR is negative,
regardless of relative performance.
(2) GHG emissions intensity metric (20%
weighting). This metric is subject to an additional
underpin of zero incidents at tailing storage
facilities and zero conflicts with local communities
during the four-year performance period.
The Committee may substitute, vary or waive the
performance targets if an event occurs which
causes the Committee to consider that the target
is no longer appropriate.
The Committee has discretion to vary the
proportion of awards that vest to ensure that the
outcomes are fair and appropriate, and reflect the
underlying performance of the Group.
The Board will consider vesting metrics for the
2024 PSP grant in due course, taking into
consideration the divestment of JSC Polymetal
and its subsidiaries and de-listing from the
London Stock Exchange.
Use of discretion for LTIP programme (DSA and PSP)
When setting forward-looking targets, it is not always possible to predict the outcomes, especially with the quickly changing market
environment and the volatility of our sector. The Committee retains the right to exercise discretion, both upwards and downwards, to ensure
that the level of award payable is appropriate. The Committee will make adjustments to retain the original intent and challenge of the
performance measure in the event of, for example, corporate transactions, significant commodity, share price or other macroeconomic
volatility or changes to accounting standards. If any discretion is exercised, the rationale will be fully disclosed in the subsequent Annual
Report on Remuneration. For any period where we cannot grant shares, we intend to make no PSP awards to the Executive Director.
Element and
purpose/link
to strategy
Operation
Opportunity
Performance metrics used and
period applicable
Not applicable.
The minimum shareholding requirement
for the Group CEO is 500% of base
salary.
The retention of the full shareholding is
required for two years post-cessation of
employment, with lock-up at the broker
level to ensure compliance.
Fees are reviewed, but not necessarily
increased, on an annual basis.
Not applicable.
Any increase in non-executive Directors’
fees will normally be in line with market
levels for similar roles in companies of
a similar size and global mining peers,
except where a change in the scope of
the role occurs. Current fee levels are
set out in the Annual Report on
Remuneration on page 110.
Long-Term Incentive Plan (LTIP) continued
Minimum
shareholding
requirements
To strengthen
alignment
between the
interests of the
Executive
Director and
those of
shareholders
Unvested shares under the PSP or
DSA are not taken into account when
calculating progress towards the
minimum shareholding requirements.
For the purposes of determining
whether the requirements have been
met, the share price is measured at the
end of each financial year. Post vesting
and tax, all shares acquired under PSP
and DSA awards must be retained until
the shareholding requirement is met.
Non-Executive Directors
Fees for
Independent
Non-Executive
Directors
To attract
and retain
high-calibre
Non-Executive
Directors
The fees of Independent Non-
Executive Directors are set by
reference to those paid by
companies of a similar size. Fees are
set to reflect the responsibilities and
time spent by Non-Executive
Directors on the affairs of the
Company. No fees are paid to
Non-independent, Non-Executive
Directors. Non-Executive Directors
are not eligible to receive benefits
and do not participate in incentive or
pension plans.
The following fees are paid in addition
to the Non-Executive Director base
fee: Committee Chair’s fee; Senior
Independent Director fee; Committee
membership fee; and Board,
Committee and General Shareholder
Meeting attendance fees. The
Remuneration Committee determines
the framework and broad policy for
the remuneration of the Board Chair
for approval by the Board. The
remuneration of Non-Executive
Directors is a matter for the Board
Chair and the Executive members of
the Board, i.e. the Group CEO.
Directors do not participate in
discussions relating to their own fees.
104
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Remuneration Committee report continued
Performance measures and targets
The Committee selected the performance conditions indicated in the policy table because they are central to the Company’s overall
strategy and include the key metrics used under the annual bonus and LTIP by the Group CEO to oversee the operation of the business.
Performance targets for all of our incentive plans are reviewed annually and, where appropriate, are typically set at a level that is in line
with the Company’s plans and budget.
The composition and structure of the remuneration package for the Group CEO promotes the achievement of both short-term and
long-term performance targets and drives the alignment of the Group CEO’s interests with the interests of shareholders.
Minimum
Target
Maximum
Maximum with share
price appreciation
Fixed elements
Base salary and pension
Base salary and pension
Base salary and pension Base salary and pension
Single year variable
Performance against
quantitative KPIs is below
budget.
Non-achievement of
qualitative or non-
financial KPIs.
0% pay-out.
Performance against
quantitative KPIs is at
budgeted levels. Full
achievement of non-
financial KPIs. 100% of
base salary pay-out
(83.3% of maximum
opportunity). Includes
DSA awards.
Multiple year
variable
Share price performance
is below the median of
FTSE Gold Mines Index
constituents.
No shares vest.
Scenario is based on
125% policy awards.
Share price performance
is at median of FTSE
Gold Mines Index
constituents. Shares
equivalent to 25% of base
salary vest under the PSP
(20% of total shares
available).
Performance against
quantitative KPIs is above
budgeted levels. Full
achievement of non-
financial KPIs. 120% of
base salary pay-out
(100% of maximum
opportunity). Includes
DSA awards.
Performance against
quantitative KPIs is above
budgeted levels. Full
achievement of non-
financial KPIs. 120% of
base salary pay-out (100%
of maximum opportunity).
Includes DSA awards.
Share price performance
is in the top quintile of
FTSE Gold Mines Index
constituents. Shares
equivalent to 125% of
base salary vest under
the PSP (100% of total
shares available).
Share price performance is
in the top quintile of FTSE
Gold Mines Index
constituents. Shares
equivalent to 125% of base
salary vest under the PSP
(100% of total shares
available).
Share price appreciation of
50% has been assumed.
Approach to recruitment remuneration
The Committee’s approach to recruitment remuneration is to pay a competitive overall package, as appropriate, to attract
and motivate the right talent for the role. If an executive is promoted to the Board from within the Company, any pre-
existing awards or benefits that were made available to them prior to becoming a Director (and not in anticipation of an
imminent promotion to the Board) will be retained and allowed to vest or be provided under the original terms.
The following table sets out the various components that would be considered for inclusion in the remuneration package
for the appointment of an Executive Director. Any new Director’s remuneration package would include the same elements,
set at a level consistent with the scope of the role (at a level not exceeding that of the Group CEO as set out in the
Remuneration Policy table), and be subject to the same constraints as those of existing Executive Directors performing
similar roles, as shown below.
Area
Policy and operation
The base salary level will be set by taking into account the experience of the individual and the salaries paid in
comparable companies. Depending on the circumstances of any particular appointment, the Committee may
choose to set the base salary below market median and increase the amount paid over a period of time to
achieve alignment with market levels for the role (with reference to the experience and performance of the
individual), subject to the Company's ability to pay. In line with the Remuneration Policy, as set out in the
Directors' Remuneration Policy table, no benefits will be provided to recruited Directors.
Pension contributions will be limited to the mandatory contributions required by Kazakh or any other applicable
law, as set out in the Directors' Remuneration Policy table.
The Executive Director will be eligible to participate in the annual bonus scheme as set out in the Directors'
Remuneration Policy table. The maximum annual opportunity is 120% of base salary. 50% of any bonus is
deferred into shares under the DSA, subject to legal limitations, as set out in the Directors' Remuneration
Policy table.
The Executive Director will be eligible to participate in the PSP part of the LTIP at the Remuneration
Committee's discretion and in line with the details set out in the Directors' Remuneration Policy table (subject
to legal limitations). The maximum annual grant permitted under the scheme rules is 150% of base salary and
the normal grant level is up to 125% of base salary. Performance measures would apply, as set out in the
Directors' Remuneration Policy table.
The Committee will seek to structure any replacement awards so that overall they are no more generous in
terms of quantum or timing than the awards to be forfeited as a consequence of the individual joining the
Company. In determining the quantum and structure of any replacement awards, the Committee will seek to
replicate the fair value and, as far as practicable, the timing, form and performance requirements of the
forfeited remuneration. The maximum value of replacement awards is capped at 50% of the individual's base
salary and at least 50% of any replacement award should be delivered in the Company's shares.
Base salary
and benefits
Pension
Annual bonus
Long-term
incentives
Replacement
awards
106
Area
Other
Policy and operation
Should relocation of a newly recruited Executive Director be required, reasonable costs associated with this
relocation will be met by the Company. Such relocation support may include, but not be limited to, payment of
legal fees, removal costs, temporary accommodation/hotel costs, a contribution to stamp duty and
replacement of non-transferable household items. In addition, and in appropriate circumstances, the
Committee may grant additional support in relation to the payment of school fees and the provision of tax
advice. The Company will reimburse the Executive Director for all reasonable expenses which they may incur
while carrying out executive duties.
Policy on payment for loss of office
The Committee’s approach when considering payments in the event of termination is to take into account individual circumstances,
including the reason for termination, contractual obligations of both parties, and applicable share plan and pension scheme rules
(including any relevant performance conditions).
Vitaly Nesis is an Executive Director and Group CEO of Polymetal International plc. Further details are set out in the current Directors’
appointment letter section on page 109.
The table below summarises the key elements of the Executive Director policy on payment for loss of office.
Area
Policy and operation
Notice period
Compensation for
loss of office in
service contracts
Treatment of annual
bonus awards
Polymetal International
Six months from Company
Six months from Director
Up to six months
Where an Executive Director's appointment is terminated after the end of the performance year, but before the
payment of the annual bonus is made, the Executive may be eligible for an annual bonus award for that
performance year subject to an assessment based on performance achieved over the period. No award will be
made in the event of gross misconduct. Where an Executive Director's appointment is terminated during a
performance year, a pro-rated annual bonus award for the period worked in that performance year may be
payable, subject to an assessment based on performance achieved over the period.
Treatment of
unvested DSAs
under plan rules
In normal circumstances, DSAs will continue until the normal time of vesting upon cessation of appointment in
Good Leaver Circumstances. Alternatively, the Board may determine that DSAs will vest immediately. In both
circumstances, for the DSA already granted, there would be no pro-rating for time from the award date until
cessation of employment or for performance.
Treatment of
unvested PSP
awards under plan
rules
Any outstanding award will lapse at cessation of appointment within the Group, unless the cessation is due to
Good Leaver Circumstances, in which case the award will usually vest as normal in accordance with the terms
of the award. Alternatively, the Committee may determine that the award will vest immediately.
The Committee will determine the proportion of the award that will vest, taking into account (where relevant)
the extent to which the performance conditions have been met or are likely to be met at the end of the
performance period, and any other factors the Committee may consider relevant.
Post-cessation
shareholding
requirement
Exercise of
discretion
Corporate event
The number of shares will also be pro-rated down to reflect the reduced service period.
The Executive Director is to retain a minimum shareholding requirement (500% of base salary or actual
shareholding if lower) for two years post-cessation of appointment. Shares must be kept with a broker
who can implement blocks on trades.
Any discretion available in determining the treatment of incentives upon termination of employment is intended
only to be relied upon to provide flexibility in unusual circumstances. The Committee’s determination will take
into account the particular circumstances of the Director’s departure and the recent performance of the
Group.
In relation to PSP awards, in the event that the Company’s shares cease to trade on any recognised stock
exchange (delisting) or the Directors of the Company pass a resolution to the effect that delisting is imminent or
where the Board determines that a ‘significant event’ has occurred, which may be a demerger, winding-up or
compulsory acquisition of the Company, or any other event as determined by the Board, at the discretion of
the Board and, where applicable, with the consent of the acquiring company, PSP awards will not vest but will
be exchanged for new PSP awards.
In the event that the PSP awards are exchanged for new PSP awards:
• The award date of the new PSP award shall be deemed to be the same as the award date of the original
PSP award
• The new PSP award will be in respect of shares in a company determined by the Board which may include
any acquiring company
• The new PSP award must be equivalent to the PSP award and will vest at the same time and in the same
manner as the PSP award.
Where relevant, either the vesting of the new PSP award must be subject to any performance conditions which
are, so far as possible, equivalent to any conditions applying to the PSP award, or no performance conditions
will apply but the value of shares comprised in the new PSP award shall be the value of the number of shares
which would have vested under the PSP award if they had not been exchanged for new PSP awards.
DSAs shall vest immediately and shall not be pro-rated for time or performance if any of the events referred to
above occur.
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Remuneration Policy for other employees
The Remuneration Policy for other members of the executive team and broader management team within the Group is consistent in both
structure and KPIs to that of the Group CEO. While the value of remuneration will vary throughout the Group, depending upon the individual’s
role, significance to the business and the level of responsibility, the remuneration of all senior executives consists of a base salary, an annual
bonus and participation in the LTIP (the PSP and DSA).
The KPI structure for all of our senior managers and key employees is tailored to individual responsibilities and performance. To reflect the
aim of zero fatalities, the bonus calculation system for the Group CEO, some senior managers and mine management has a major focus on
health and safety KPIs, adjusting bonus outcomes on all KPIs in the case of fatalities. We aim to ensure the corporate cohesiveness of the
team as well as to support individual success and development.
Operation of the DSA programme for the most senior employees mirrors the Executive Director’s arrangement set out in the policy table,
where 50% of the annual bonus is deferred into shares (if technically practicable, refer to page 104 for details) and released annually to the
employees over a period of three years.
The Remuneration Policy for the wider group of employees is aimed at aligning pay with the achievement of targeted results for each
employee. The Company’s policy on fair pay provides for the payment of additional remuneration for employees living in difficult climatic
locations and the delivery of appropriate levels of pay for different levels of work. The bonus component of remuneration for mid-level
management and operational staff is measured based upon the achievement of production targets, increasing output, the level of justified
cost savings, health and safety records and ESG metrics. In terms of pension arrangements, the Company applies a consistent approach for
the Group CEO and other employees, and adheres to the mandatory pension contributions required under applicable laws.
Polymetal is firmly committed to acknowledging and rewarding employees’ hard work and achievements. To help us attract and retain the
best candidates, we offer a competitive remuneration package and benefits, which exceed regional averages in our areas of operation.
Salaries are considered for annual increases based on the Company’s performance results, inflation rates and the competitive level of
salaries versus the wider market.
We also aim to provide a pleasant and effective working environment as well as training or further education and other opportunities for our
employees.
Annual Report on Remuneration
Current Directors’ service contracts
Group CEO
Mr Nesis resigned from his position as Director General of JSC Polymetal and from all executive positions in the subsidiaries of
JSC Polymetal on 5 June 2023. He continues in his role as Group CEO, and key elements of his employment letter are detailed below.
Date of contract
Expiry of term
Payment in lieu of notice
Pension
5 June 2023
None
None
None
Mr Nesis entered into an appointment letter with the Company in relation to his appointment as an Executive Director. This appointment
took effect on 29 September 2011. Under the terms of the appointment, the Group CEO undertakes to perform general supervision and
control of all of the business and affairs of the Group. The appointment letter does not constitute an employment contract or a service
contract. The contract can be terminated at any time on six month’s notice by Mr Nesis or the Company and shall be automatically
terminated if the Executive ceases to be a Director by virtue of any provision of the Company’s Articles of Association or applicable law.
This could result in compensation of six average monthly salaries. Mr Nesis is subject to annual re-election at the Annual General Meeting
of shareholders. Mr Nesis is entitled to reimbursement of his reasonable expenses incurred in relation to carrying out his duties as a
Director.
The full terms and conditions of appointment are available for inspection at the Company’s registered office in Kazakhstan and its office in
London.
Non-Executive Directors
Non-Executive Directors do not have service contracts and the terms of their appointment are set out in letters of appointment.
The appointment of any Non-Executive Director may be terminated at any time in accordance with the Articles of Association and they
are subject to annual re-election at the Annual General Meeting of shareholders. The appointment of each Non-Executive Director may
be terminated by either party on one month’s notice. A Non-Executive Director is not entitled to receive any compensation on termination
of their appointment. Each Non-Executive Director is subject to confidentiality restrictions without limitation in time.
The full terms and conditions of appointment of all of the Directors are available for inspection at the Company’s registered office in
Kazakhstan and its office in London.
Dates of contract or appointment for Non-executive Directors are set out in the table below:
Director
Evgueni Konovalenko
Steven Dashevsky
Janat Berdalina
Richard Sharko
Pascale Jeannin Perez
Date of appointment
Notice period
17 March 2022
17 March 2022
17 March 2022
1 December 2022
1 December 2022
1 month
1 month
1 month
1 month
1 month
Single total figure of remuneration (audited)
The Group CEO is the only executive member of the Board.
As a result of the performance of the Company and achieving the set KPIs, as presented on page 111, the Group CEO received a bonus
of 85% of maximum opportunity for the year (which constitutes 100% of his base salary or $385,235), with 50% of this bonus deferred
into shares vesting over a period of the next three years under the terms of the DSA.
No discretion has been used in respect of Non-Executive and Executive Directors’ remuneration throughout the reporting period.
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Remuneration Committee report continued
Group CEO
The table below sets out the 2023 remuneration for the Group CEO, which comprises the remuneration received in his capacity as the
Group CEO of Polymetal International for the whole year and in his capacity as the CEO of JSC Polymetal until his resignation from this
position on 5 June 2023. The Group CEO’s remuneration is denominated in EUR and converted to Dollars for presentation purposes
using the average annual exchange rate.
Single total figure of remuneration – Additional information
Annual bonus targets and outcomes
The targets for annual bonus measures and performance against these targets are set out below:
Measures
Link to strategy
Weight Threshold
Target
Maximum
2023 outcome
Achievement
Base salary
Taxable benefits
Annual bonus
Long-term incentive plans
Pension
Total
$
2023
2022
471,809
502,967
-
-
385,235
592,693
-
-
64,665
55,777
921,709
1,151,437
Non-Executive Directors fees
Details of total fees paid to Non-Executive Directors and the Board Chair during 2023 and 2022 are set out in the table below.
Non-Executive Directors do not receive performance-related pay.
Name
Paul Ostling
Evgueni Konovalenko
Steven Dashevsky
Janat Berdalina
Richard Sharko
Pascale Jeannin Perez
Total Non-Executive Directors fees
Total fees, $
2023
2022
135,501
389,301
354,301
320,301
335,845
287,301
231,129
232,027
216,602
188,118
19,667
24,750
1,822,551
1,688,902
Achieving
production
budget, Koz
Total cash costs
per ounce of gold
equivalent
produced, $/oz
Completion of
new projects,
including:
On time
Within budgets
(capital
expenditure for
investment
projects, $m)
Disability
Sustainability,
including:
Environment
• Decarbonisation
• Reduction of
•
fresh water use
Increased share
of dry stacked
tailings
Personnel
• Retention and
gender diversity
Total achievement
before penalty
factor
Penalty factor for
fatal/severe cases
Final achievement
for the year
Focus on Kazakhstan
and selected Central
Asian countries
Strong cash flow
generation and a
strong balance sheet
20% 1,512
1,680
1,764
1,714
20% 1,089
990
940
861
Growth in chosen
jurisdictions
25%
12.5% 1 point
10 points
10 points
8.9 points
12.5% 356
324
308
268
Best practice in corporate
governance and
sustainable development
20% 1%
decrease
year-on-year
>10%
decrease
year-on-year
>10%
decrease
year-on-year
32% increase year-on-year
Best practice in corporate
governance and
sustainable development
15%
12% • Decrease GHG emissions intensity
per oz GE (Scopes 1 and 2) by 12%
compared with 2019 baseline year
• Achieve 44% reduction of fresh water
withdrawal for technological
purposes m³/Kt of processed ore
compared with 2019
• Achieve 13% dry stacked tailings of
total tailings disposed during the
reporting year
• GHG emissions intensity per oz
GE (Scopes 1 and 2) decreased
by 15% compared with 2019
baseline year, see page 59
• Fresh water withdrawal for
technological purposes
decreased by 53% compared
with 2019, see page 52
• Share of dry-stack tailings
achieved 30% of total tailings
disposed during the reporting
year, see page 53
24%
30%
30%
11%
19%
0%
16%
15%
3%
• Achieve 35% women in the Talent
• Share of women in the Talent
1%
Pool
Pool achieved 27%, see page 40
100%
n/a
n/a
0 fatalities and
2 severe cases
100%
-15%
85%
For the Group CEO, the safety penalty factor for fatal/severe cases is up to 50% of the annual bonus earned for non-safety related KPIs.
This resulted in the Group CEO receiving a bonus of 85% of maximum opportunity for the year (which constitutes 100% of his base salary
or $385,235).
Deferred Share Awards Plan (audited)
DSA deferred shares vested in 2023
In accordance with the policy, part of the award of deferred shares under the DSA, which was granted in March 2020, March 2021 and
March 2022, vested and was transferred to the Group CEO on 2 October 2023, totalling 18,902 shares (including an additional 1,132
share awards for dividend equivalents).
DSA deferred shares grant proposed for 2024
In addition, further to the bonus approval for the year ended 31 December 2023, the Group CEO will receive a deferred bonus award
under the terms of the DSA (50% of the annual bonus earned is paid in cash and the remaining 50% is compulsorily deferred into shares)
in March 2024. Under the normal circumstances, share awards would vest annually over the next three years in equal instalments (in
March 2025, 2026 and 2027), subject to continued service in the Group. Under the terms of the DSA, dividend equivalents will be
received on vested shares reflecting the value of the dividends which have been paid during the period from the grant date to the vesting
date. Dividend equivalents will also be paid as shares.
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Remuneration Committee report continued
Performance Share Plan
PSP award made in 2023
Due to external conditions, no conditional awards were made to Mr Nesis in 2023.
PSP award vested in 2023
Due to external conditions, no conditional awards were vested to Mr Nesis in 2023.
Summary of PSP share options outstanding as of 14 March 2024
Name
Vitaly Nesis
Total number of share options
outstanding under the PSP
Position
Year of grant/
Year of vesting
Group CEO
2019/2023
2020/2024
2021/2025
2022/2026
2023/2027
Number of
PSP share
awards
granted
PSP awards
release in
2023
Number of
PSP shares
vested
(see above)
Outstanding
shares under
PSP grant
60,740
34,983
20,683
–¹
–¹
171,976
–
–
–
–
–
–
–
–
–
–
–
–
60,740
34,983
20,683
–
–
116,406
1 No PSP share awards were granted to the Group CEO due to the current issues with the Policy as outlined above.
Other scheme interests awarded during the financial year
No other share awards were made to the Group CEO in 2023.
Total pension entitlements
Save for the Group’s defined contributions to the mandatory social contribution paid in the Republic of Kazakhstan during the financial
year ended 31 December 2023 and to the pension fund of the Russian Federation until his resignation on 5 June 2023, no amounts were
set aside or accrued by the Group to provide pension, retirement or other benefits to the Directors and senior management.
Loss of office payments or payments to past Directors
No loss-of-office payments or payments to past Directors were made in the year under review.
Shareholder support for the Remuneration Policy and 2022 Directors’ Remuneration Committee Report
The Company received shareholder approval of its Remuneration Policy at the AGM on 25 July 2023 to cover a period of three years.
The policy has been applied since the date of approval. The Directors’ annual Remuneration Committee Report was put to an advisory
shareholder vote at the 2023 AGM of the Company. The table below shows full details of the voting outcomes
Votes for
Votes against
Votes withheld
Remuneration Policy (at the 2023 AGM)
126,097,050 (96.88%)
3,485,475 (2.68%)
2022 Remuneration Committee report (at the 2023 AGM)
126,022,155 (96.83%)
3,460,797 (2.66%)
569,394
658,252
Approval
This report was approved by the Board of Directors and signed on its behalf by
Richard Sharko
Chair, Remuneration Committee
112
Stakeholder engagement
We have a structured approach to our
shareholder engagement, which includes
market updates, meetings, webcasts,
shareholder consultations and General
Meetings. We ensure that shareholders’
interests are considered as part of our
Board decision-making process.
The main impetus this year was increased
communication with retail investors, both
quantitatively and qualitatively, given
the re-domiciliation and transfer of the
shareholder register to the new
jurisdiction.
Investor meetings
Despite continued geopolitical uncertainty and external challenges,
we remained committed to proactive shareholder and investor
engagement. The Company remained open and transparent, and
regular reporting and communication with stakeholders continued as
usual. They were also kept up to date about the re-domiciliation
process from Jersey to Astana International Financial Centre (AIFC) in
Kazakhstan as well as the divestment of JSC Polymetal and its
subsidiaries. We established additional communication channels to
advise stakeholders on the process of re-domiciliation and share
transfers to the infrastructure of Astana International Exchange,
which in August 2023 became the Company’s primary listing venue.
As a result of re-domiciliation, we handled more calls, emails and
meetings requests than before. As the volume of interactions grew
exponentially, we made every effort to deal with questions from
investors in a timely, transparent and diligent manner. Responding to
this increased demand, the Company held over 300 online and
personal meetings, guiding institutional and retail investors through
the complex process of re-domiciliation and its impact on all
stakeholders.
Capital Markets Days
During 2023, Polymetal held a hybrid Capital Market Day and Investor
Briefing in London, in January and May respectively. Senior
management presented quarterly production results along with
updates on Polymetal’s execution of its mid-term strategy, covering
re-domiciliation to AIFC and de-listing from the London Stock
Exchange.
Annual General Meeting
• At the AGM, the Board communicated directly with shareholders
about the business and they, in return, had an opportunity to
meet and pose questions to the Directors in attendance.
• The AGM was held in London to facilitate easier participation by
shareholders. The SID and Chairs of all Board Committees made
themselves available to answer any shareholder questions.
• The Integrated Annual Report and Notice of the AGM were made
available – in printed form and on our website – at least 20
working days before the AGM to ensure that shareholders had
time to consider them in detail.
• The AGM voting results are reported on our website.
In addition to investor meetings attended by SID and some Directors,
separate engagement is arranged with our key shareholders to
discuss various areas of corporate governance. In 2023, we listened
to shareholders’ views on the changes to domicile of the Company
and mid-term outlook. Additional work on the Company’s strategy is
being carried out in response to the feedback.
Shareholder engagement outcomes
As a result of our shareholder engagement, we further enhanced
our disclosure process, particularly focusing on providing
comprehensible and thorough feedback on the current state of the
Company and corporate strategic initiatives. We are committed to
proactively engaging with shareholders and investors in a
transparent manner about the governance, safety, ethics and
environment policies and protocols that govern our day-to-day
operations. We regularly publish detailed updates and FAQs in
response to the increased volume of inquiries from retail and
institutional shareholders.
Board site visits
Annual site visits greatly improve the Board’s understanding of
Polymetal’s operations and organisation, and are an invaluable
contribution to the Board’s evaluation of the Group’s business plan
and strategy. They also provide the Board with an opportunity to
talk with local senior management and employees about the
experience of working for Polymetal.
In September 2023, the Board visited Polymetal’s Vavara operation
in the Kostanay Region of Kazakhstan, which included tours of the
quarry, plant and tailings storage facility. This enabled them to
experience first hand not only how the production process is
organised but the sheer scale of the operation. They also
welcomed the chance to speak directly with Vavara’s specialists
about their role in turning ore into gold.
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Directors’ responsibility statement
The Group has already taken precautionary measures to
manage liquidity and provide flexibility for the future. In
addition, it was assumed that the Group has adapted its
sales routes and supply chain and the net cash flows
generated will be available for use within the Group. Under
the stress scenario, the Group’s income and profits are
affected by simultaneous decrease of gold prices by 5%
and local currency appreciation by 10%, as well as 10%
overrun of development capital expenditure.
At the reporting date, the Group holds $329 million of cash
and $100 million of undrawn credit facilities (excluding
assets sold in March 2024), which when combined with the
forecast net cash flows under the stress scenario above, is
considered to be adequate to meet the Group’s financial
obligations as they fall due over the next 12 months. No
borrowing covenant requirements are expected to be
breached in the stress scenario. The Group expects to
settle obligations as they fall due but also has mitigating
actions available such as reducing production volumes and
variable mining costs where possible, reducing and
deferring non-essential and non-committed capital
expenditure.
The Board is therefore satisfied that the Group’s forecasts
and projections, including the stress scenario above,
demonstrate that the Group has adequate resources to
continue in operational existence for at least 12 months
from the date of this report and that it is appropriate to
adopt the going concern basis in preparing the
consolidated financial statements for the year ended 31
December 2023.
In assessing its going concern status, the Group has taken
account principal risks and uncertainties, financial position,
sources of cash generation, anticipated future trading
performance, borrowings and other available credit
facilities, and forecasted compliance with covenants on
those borrowings, and capital expenditure commitments
and plans.
In the going concern assessment, the Group also
considered the implications of sanctions imposed by US
Department of State on JSC Polymetal, the Company’s
subsidiary in the Russian Federation. In February 2024, the
Group entered into contracts for the divestment of its
Russian business through a sale of 100% of JSC
Polymetal’s shares to a third party, JSC Mangazeya Plus, as
described in Note 32 to the consolidated financial
statements. On 16 February 2024, US Department of the
Treasury’s Office of Foreign Asset Control (OFAC) confirmed
to the Company that it would not impose sanctions on
non-US persons, including Polymetal International plc, for
participating in or facilitating such a transaction. The Group
determined that these implications did not have any material
effect on the Group’s liquidity position and its ability to
finance its obligations.
On 7 March 2024, the transaction was approved by the
Shareholders General Meeting and, following receipt of
required regulatory approvals, the transaction was
completed on the same day.
To assess the resilience of the Group’s going concern
assessment in light of the macroeconomic volatility,
management performed the stress downside scenario that
is considered plausible over the next 12 months from the
date of approval of the 2023 consolidated financial
statements. As such this does not represent the Group’s
‘best estimate’ forecast, but was considered in the Group’s
assessment of going concern, reflecting the current
evolving circumstances and the most significant and
plausible changes in macro assumptions identified at the
date of performing of the going concern assessment.
Directors are responsible for the preparation of the consolidated financial statements
that present the financial position of Polymetal International Plc (the Company) and its
subsidiaries (the Group) as of 31 December 2023, and the results of its operations,
cash flows and changes in equity for the year then ended based on the recognition,
derecognition, measurement and classification principles of International Financial
Reporting Standards (“IFRS”).
In preparing the consolidated financial statements, directors
are responsible for:
• Properly selecting and applying accounting policies.
• Presenting information, including accounting policies, in
a manner that provides relevant, reliable, comparable
and understandable information.
• Providing additional disclosures when compliance with
the specific requirements in IFRSs are insufficient to
enable users to understand the impact of particular
transactions, other events and conditions on the Group’s
consolidated financial position and financial
performance.
• Making an assessment of the Group’s ability to continue
as a going concern.
Directors also are responsible for:
• Designing, implementing and maintaining an effective
and sound system of internal controls throughout the
Group.
• Maintaining adequate accounting records that are
sufficient to show and explain the Group’s transactions
and disclose with reasonable accuracy at any time the
consolidated financial position of the Group, and which
enable them to ensure that consolidated financial
statements of the Group comply with IFRS.
• Taking such steps as are reasonably available to them to
safeguard the assets of the Group.
• Preventing and detecting fraud and other irregularities.
Consolidated financial statements of the Group for the year
ended 31 December 2023 were approved by Board of
Directors on 14 March 2024.
By order of Board of Directors:
Evgueni Konovalenko
Senior Independent Director
Vitaly Nesis
Group Chief Executive Officer
14 March 2024
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The Directors submit the Integrated Annual Report of Polymetal International plc together
with the audited financial statements of Polymetal International plc for the year ended
31 December 2023.
Financial statements
Each of the persons who is a Director at the date of approval of
this Integrated Annual Report confirms that:
• So far as the Director is aware, there is no relevant audit
information of which the Group's auditor is unaware
• The Director has taken all steps that they ought to have taken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Group's auditor is
aware of that information.
AO Business Solutions and Technologies as Group auditor has
audited the financial statements. The Group’s annual consolidated
financial statements for the year ended 31 December 2023 are
prepared in accordance with International Financial Reporting
Standards (IFRS). The Audit and Risk Committee reviews both the
level of the audit fee and the level and nature of non-audit fees as
part of its review of the adequacy and objectivity of the audit
process.
Operations during the year
Refer to pages 20-27 for a review of the operations during the year
and the results of those operations.
Significant changes
Details of any significant changes in the Group’s state of affairs
during the financial year are provided on pages 7-9.
Principal activities during the year
Details relating to the Groups’ principal activities during the year
and any significant changes in the nature of those activities are
disclosed on pages 4-5, 10-11.
Events since the end of the year
Refer to page 164 for details of any matter or circumstance that
have arisen since the end of the year that have significantly
affected or may significantly affect the Group’s operations in future
financial years and the results of those operations or the Group’s
state of affairs in future financial years.
Developments in future financial years
For likely developments in the Group’s operations in future financial
years and the expected results of those operations see pages 14-
15. The Board believes that the disclosures set out in the Strategic
report on pages 4 to 37 of this Integrated Annual Report provide
the information necessary for shareholders to assess the Group's
performance, business model and strategy.
Auditor’s statement
A statement by the Group auditor as to whether in the auditor’s
opinion of the financial statements represents a true and fair view
of the financial position of the Group is provided on pages 120-123.
Going Concern statement
A Going Concern statement by the Directors, including key
assumptions, is detailed on page 114.
Connected persons and significant shareholders
Directors' interests are disclosed in annual declarations and the
Company Secretary is notified promptly of any changes to those
interests. Before each Board meeting, Independent Non-Executive
Directors reconfirm their independence and all Directors disclose
whether they hold any interests in the matters to be reviewed at the
meeting.
Information about related parties is provided in Note 30 of the
consolidated financial statements.
Information on significant shareholders is noted on page 204.
Compliance with the corporate governance
principles
Refer to pages 88 to 93 for a description of the Group's corporate
governance structure and policies.
The schedule of matters reserved to the Board and terms of
reference for all Board Committees can be found in the Corporate
governance section on the Company's website. Terms of reference
are reviewed at least annually.
Refer to pages 65 for a description of the Group's business ethics
and anti-bribery policies and procedures.
Re-election policies
In accordance with the Company’s Articles of Association, all
Directors are subject to annual re-election. Full terms and
conditions of the appointment of Non-Executive Directors are
available for inspection at the Company's registered office.
The Directors' biographical details are set out on page 87.
Following their performance evaluations, the Board and the SID
consider that each of the Directors standing for election or
re-election will continue to be an effective contributor to the
Group's success and demonstrates commitment to their role.
Appointment and replacement of Directors
The Board may appoint a person who is willing to act as a Director,
either to fill a vacancy or as an additional Director and, in either
case, whether or not for a fixed term. Irrespective of the terms of
their appointment, a Director so appointed shall hold office only
until the next AGM. If not re-appointed at such AGM, they shall
vacate office at its conclusion.
The Company may, by ordinary resolution, remove any Director
from office (notwithstanding any provision of the Company's
Articles or of any agreement between the Company and such
Director, but without prejudice to any claim that they may have for
damages for breach of any such agreement). No special notice
needs to be given of any resolution to remove a Director and no
Director proposed to be removed has any special right to protest
against their removal. The Company may, by ordinary resolution,
appoint another person in place of a Director removed from office.
Directors’ indemnities
To the extent permitted by the AIFC Companies Regulations No. 2
of 2017, the Company has indemnified every Director and other
officer of the Company (other than any person (whether an officer
or not) engaged by the Company as auditor) out of the assets of
the Company against any liability incurred by them for negligence,
default, breach of duty, breach of trust or otherwise in relation to
the affairs of the Company. This provision does not affect any
indemnity to which a Director or officer is otherwise entitled.
Political donations
The Company may not make a political donation to a political party
or other political organisation or to an independent election
candidate or incur any political expenditure, unless such donation
or expenditure is authorised by an ordinary resolution of
shareholders passed before the donation is made or the
expenditure incurred. No such donations were made in 2023
(2022: none).
Capital structure
The structure of the Company's share capital is detailed in Note 29
to the financial statements. There are no specific restrictions on the
size of a holding or on the transfer of shares, which are both
regulated by the Articles of the Company and applicable
legislation. The Directors are not aware of any agreements
between holders of the Company's shares that may result in
restrictions on the transfer of shares or on voting rights.
The Articles of the Company can be altered by a special resolution
of the Company. A resolution is a special resolution when it is
passed by three-quarters of the members who (being entitled to
do so) vote in person, or by proxy, at a General Meeting of the
Company. Pursuant to the Company's Articles, the Directors have
the power to allot Equity Securities (as defined in the Articles).
There are a number of agreements that take effect, alter or
terminate upon a change of control of the Company, such as
commercial contracts, bank loan agreements and employees'
share plans. None of these is considered to be significant in terms
of their likely impact on the business of the Group as a whole.
Furthermore, the Directors are not aware of any agreements
between the Company and its Directors or employees that provide
for compensation for loss of office or employment that occurs
because of a takeover bid. Substantial shareholdings in the
Company are disclosed on page 204.
Details of employee option schemes are set out in the
Remuneration report on page 108.
Further to the Second Exchange Offer² announced on
23 November 2023 and approved by shareholders at the General
Meeting on 8 December 2023, the Company repurchased
5,082,079 ordinary shares on 5 March 2024 in consideration for
the issuance of exchange shares on a one-for-one basis. These
shares enjoy the same rights and ISIN as are interchangeable with
ordinary shares in all respects. The Second Exchange Offer is
ongoing and closes on 31 October 2024.
Following the repurchase of shares under both Exchange Offers
and the issuance of the exchange shares, the total number of
voting rights in the Company remains unchanged and is
473,645,141 ordinary shares at par value of $0.03, each carrying
one vote. The Company holds 46,696,757 ordinary shares in
treasury, which do not enjoy any voting or economic rights.
Polymetal intends to cancel these shares. However, such a
cancellation is contingent upon the relaxation of the restrictions on
NSD and until such time that the restrictions have been lifted, the
exchanged shares will be held in treasury by the Company and will
not be available for re-issue.
Total issued share capital
As of 14 March 2024, the total issued share capital of the Company
comprises 520,341,898 ordinary shares of no par value of which
46,696,757 are held as treasury shares, which do not enjoy any
voting or economic rights. During 2023, the Company issued
2,562,742 shares of which:
• 18,902 shares were issued as part of the LTIP scheme
• 2,543,840 shares were issued under the First Exchange Offer
and an equivalent number of shares was transferred into
treasury shares.
The total number of voting rights in the Company is 473,645,141
ordinary shares of no par value, each carrying one vote
(31 December 2022: 473,626,239 shares).
Dividends
No dividend will be proposed for the full year 2023. Following the
recent completion of the divestment of the Russian business, the
Board will actively reconsider the dividend policy and intend to
share an update in first half of 2024.
Having taken all matters considered by the Board and brought to
the attention of the Board during the year into account, we are
satisfied that the Integrated Annual Report, taken as a whole, is
accurate, balanced and understandable, and provides the
information necessary for shareholders to assess the Company's
performance, business model and strategy.
Pursuant to Article 61 of the Articles, the Company may hold
treasury shares.
On behalf of the Board
Exchange Offers
Further to the First Exchange Offer¹ announced on 22 September
2022 and as approved by shareholders at the General Meeting on
12 October 2022, the Company repurchased 39,070,838 ordinary
shares on 9 December 2022 and 2,543,840 ordinary shares on 11
October 2023 in consideration for the issuance of exchange shares
on a one-for-one basis. These shares enjoy the same rights and
ISIN as and interchangeable with ordinary shares in all respects.
Тhe First Exchange Offer was completed on 11 October 2023.
Evgueni Konovalenko
Senior Independent Director
14 March 2024
1 The invitation by the Company to Eligible Shareholders to offer to exchange Eligible Shares for Certificated Shares on the terms and subject to the conditions set
out in the Shareholder Circular dated 22 December 2022.
2 The invitation by the Company to Eligible Shareholders to offer to exchange Eligible Shares for shares in uncertificated form on the terms and subject to the
conditions set out in the Shareholder Circular dated 23 November 2023.
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120
124
125
126
127
128
130
Independent auditor’s report
Consolidated financial statements
Consolidated income statement
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements
1. General
2. Significant accounting policies
3.
Critical accounting judgements and key sources
of estimation uncertainty
139
142
4. Acquisitions and disposals
143
5. Segment information
145
6. Revenue
146
7. Cost of sales
146
8. On-mine costs
146
9. Smelting costs
146
10. Depletion and depreciation of operating assets
147
11. General, administrative and selling expenses
147
12. Other operating expenses, net
147
13. Employee costs
148
14. Auditor’s remuneration
148
15. Finance expenses
148
16. Income tax
150
17. Impairment of non-current assets
151
18. Property, plant and equipment
151
19. Leases
152
20. Investments in associates and joint ventures
153
21. Inventories
154
22. Accounts receivable and other financial assets
154
23. Borrowings
155
24. Environmental obligations
155
25. Payables and accrued liabilities
156
26. Commitments and contingencies
156
27. Financial instruments
158
28. Risk management activities
160
29. Stated capital account and retained earnings
161
30. Related parties
162
31. Supplementary cash flow information
32. Subsequent events
164
33. Supplementary financial information on divestment (unaudited) 165
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Independent auditor's report
Independent auditor’s report
To the Shareholders and Board of Directors of Polymetal International plc
Opinion
We have audited the consolidated financial statements of Polymetal International plc and its subsidiaries (the “Group”),
which comprise the consolidated statement of financial position as of 31 December 2023, and the consolidated income
statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including
material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Group as of 31 December 2023, and its consolidated financial performance and its consolidated
cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRSs”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
section of our report. We are independent of the Group in accordance with the Auditor’s Independence Rules and the
Auditor’s Professional Ethics Code that are relevant to our audit of the financial statements in the Russian Federation,
together with the ethical requirements of the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (the “IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
1. Amursk POX CGU determination and impairment review
Why the matter was
determined to be a key
audit matter
How the matter was
addressed in the audit
As described in notes 3 and 17 to the consolidated financial statements, the Group performed reassessment
of the CGU determination and impairment testing in respect of Amursk POX. The reassessment was based
on the updated production plan for Amursk POX which assumes continuing use of its facilities to treat Kyzyl
concentrate after the expected divestment of JSC Polymetal, and treatment of concentrate produced by
Veduga, a Group joint venture. It was judged that as of 31 December 2023, Amursk POX represented a
separate CGU, and an impairment charge of $165 million was recognised. The revision of the CGU
determination and performing impairment assessment require a high level of management judgement and is
usually a complex and subjective process. The recoverable value of Amursk POX was particularly sensitive to
key macro-economic assumptions, including commodity prices forecast and discount rates. In addition,
assessment of the projected operating and capital maintenance costs was complex and judgmental.
In response to the key audit matter, we have:
• Obtained an understanding of the design and implementation of relevant controls over the revision of the
CGU determination and the impairment assessment under IAS 36 Impairment of Assets;
• Obtained an understanding of the commercial rationale and management’s intentions resulted in
management reassessing Amursk POX CGU;
• Challenged management’s accounting analysis for the CGU determination against the requirements of
IAS 36;
• Engaged valuation experts to support audit team in challenging management’s impairment assessment
methodology and key input assumptions in the NPV model, including: commodity price forecasts, the
discount rate applied, the production profile and the capital and operating costs by developing
independent reasonable ranges and assessing external evidence where relevant;
• Assessed the consolidated financial statement disclosures to determine if they were accurate and
complete under the relevant IFRS requirements.
Based on our audit work we are satisfied that the Amursk POX CGU determination and impairment
assessment, and the related disclosures, are reasonable.
2. Accounting for the disposal of controlling interest in Amikan GRK LLC (Veduga) and joint venture
arrangement
Why the matter was
determined to be a key
audit matter
How the matter was
addressed in the audit
As disclosed in notes 3 and 4 to the consolidated financial statements, in September 2023 the Group through a
series of transactions lost control over Amikan GRK LLC (“Amikan”), the licence holder of the Veduga mine. The
Group now owns a 49.9% interest in Amikan, and a 50.1% interest is owned by another unrelated stakeholder.
Simultaneously, JSC Polymetal entered into a number of corporate arrangements with the new stakeholder
regarding joint financing, governance and management of Veduga project. It was concluded that these
arrangements represent joint control by the two parties over Amikan. The transaction which was considered
favourable for the perspective of Veduga project, triggered a reversal of previously recognised impairment loss
in the amount of $68 million. Given the level of judgements involved, our key audit matter focuses on the
appropriateness of accounting treatment of the joint arrangement, assessment of fair value of assets and
liabilities at the disposal date, and appropriateness and amount of the impairment reversal.
In response to the key audit matter, we have:
• Obtained an understanding of the design and implementation of relevant controls in relation to accounting
for significant corporate transactions;
• Challenged management on whether current ownership structure and corporate arrangements in respect
of Amikan represent control by one of the parties, or a joint control, and whether the arrangement meets
the criteria of joint venture or joint operation;
• Assessed the appropriateness of indicators for reversal of an impairment loss;
• Reviewed and challenged management's key assumptions and sources of data used in Amikan
recoverable amount calculations;
• Challenged determination of carrying amount of Amikan’s assets and liabilities at the disposal date;
• Reviewed and assessed the appropriateness of the related disclosures in the consolidated financial
statements.
Based on our work, we are satisfied that the accounting for the Veduga corporate transaction, including
impairment reversal, and the related disclosures are appropriate.
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Other Information
Directors are responsible for the other information. The other information comprises the information included in the Annual
report, but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Other Matter – Supplementary Financial Information
Directors responsible for the preparation of information accompanying the consolidated financial statements, which is
presented as supplementary financial information in note 33. This information is provided for the purposes of additional
analysis and is not a required part of the consolidated financial statements for year ended 31 December 2023 prepared in
accordance with IFRS. Such information has not been subjected to the audit procedures applied in our audit of the
consolidated financial statements for the year ended 31 December 2023 and, accordingly, we do not express opinion or
any form of assurance conclusion thereon.
Responsibilities of Directors
Directors are responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with IFRSs, and for such internal control as directors determine is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, directors are responsible for assessing the Group’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of
the entities or business units within the group as a basis for forming an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and review of the audit work performed for purposes of group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period, and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Natalia Golovkina
(ORNZ № 21906100034),
Engagement partner,
Acting based on the power of attorney issued by the General Director on 29.07.2022 authorizing
to sign off the audit report on behalf of AO “Business Solutions and Technologies”
(ORNZ № 12006020384)
14 March 2024
122
123
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Consolidated financial statements
Consolidated financial statements
Consolidated income statement
Consolidated statement of financial position
Revenue
Cost of sales
Gross profit
General, administrative and selling expenses
Other operating expenses, net
Impairment of non-current assets, net
Share of loss in joint ventures
Operating profit/(loss)
Foreign exchange loss, net
Gain/(loss) on disposal of subsidiaries
Change in fair value of financial instruments
Finance expenses
Finance income
Profit/(loss) before income tax
Income tax
Profit/(loss) for the year
Profit/(loss) for the year attributable to:
Equity shareholders of the Parent
Earnings/(loss) per share ($)
Basic
Diluted
Consolidated statement of comprehensive income
Year ended
31 December
2023
$m
Year ended
31 December
2022
$m
Note
6
7
11
12
17
20
4
27
15
16
29
29
3,025
(1,459)
1,566
(274)
(117)
(126)
(2)
1,047
(174)
113
(8)
(162)
27
843
(315)
528
528
528
1.11
1.11
2,801
(1,690)
1,111
(311)
(142)
(825)
-
(167)
(32)
(2)
(20)
(119)
8
(332)
44
(288)
(288)
(288)
(0.61)
(0.61)
Year ended
31 December
2023
$m
Year ended
31 December
2022
$m
Note
Profit/(loss) for the year
Other comprehensive (loss)/income, net of income tax
Items that will not be reclassified subsequently to profit or loss
Effect of translation to presentation currency
Items that may be reclassified to profit or loss
Fair value (loss)/gain arising on hedging instruments during the year
Exchange differences on translating foreign operations
Currency exchange differences on intercompany loans forming net investment in foreign
operations, net of income tax
27
Total comprehensive income for the year
Total comprehensive income for the year attributable to:
Equity shareholders of the Parent
528
(528)
17
(8)
(592)
55
–
–
(288)
338
–
16
365
(43)
50
50
124
Assets
Property, plant and equipment
Right-of-use assets
Goodwill
Investments in associates and joint ventures
Non-current accounts receivable
Other non-current financial assets
Deferred tax asset
Non-current inventories
Total non-current assets
Current inventories
Prepayments to suppliers
Income tax prepaid
VAT receivable
Trade and other receivables
Other financial assets at FVTPL
Cash and cash equivalents
Total current assets
Total assets
Liabilities and shareholders' equity
Current borrowings
Accounts payable and accrued liabilities
Income tax payable
Other taxes payable
Current portion of contingent consideration liability
Current lease liabilities
Total current liabilities
Non-current borrowings
Contingent and deferred consideration liabilities
Deferred tax liability
Environmental obligations
Non-current lease liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Stated capital account
Share capital
Share premium
Share-based compensation reserve
Cash flow hedging reserve
Translation reserve
Retained earnings
Total equity
Total liabilities and shareholders’ equity
31 December
2023
$m
31 December
2022
$m
Note
18
19
20
22
22
16
21
21
22
22
31
23
25
27
31
23
27
16
24
31
29
29
29
2,998
76
11
129
107
9
192
115
3,637
1,178
180
46
131
261
5
842
2,643
6,280
(1,005)
(240)
(20)
(81)
(15)
(18)
(1,379)
(2,220)
(29)
(252)
(69)
(52)
(26)
(2,648)
(4,027)
2,253
–
14
2,436
33
8
(2,063)
1,825
2,253
(6,280)
3,392
131
14
13
31
24
142
133
3,880
1,057
185
64
148
103
10
633
2,200
6,080
(514)
(270)
(11)
(68)
(9)
(25)
(897)
(2,512)
(112)
(107)
(76)
(106)
(28)
(2,941)
(3,838)
2,242
2,450
–
–
35
16
(1,543)
1,284
2,242
(6,080)
125
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Consolidated financial statements
Consolidated financial statements
Consolidated statement of cash flows
Consolidated statement of changes in equity
Net cash generated by operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Net cash (outflow)/inflow on asset acquisitions
Proceeds from disposal of subsidiaries, net of cash disposed of
Loans advanced
Repayment of loans provided
Contingent consideration received
Net cash used in investing activities
Cash flows from financing activities
Borrowings obtained
Repayments of borrowings
Repayments of principal under lease liabilities
Acquisition of non-controlling interest
Contingent consideration paid
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
Year ended
31 December
2023
$m
Year ended
31 December
2022
$m
575
(679)
(24)
21
(60)
29
7
(706)
1,324
(944)
(21)
–
–
359
228
633
(19)
842
206
(794)
123
5
(19)
3
3
(679)
3,885
(3,029)
(18)
(24)
(27)
787
314
417
(98)
633
Note
31
4
4
31
31
31
31
31
31
Note
29
Balance at 1 January 2022
Loss for the year
Other comprehensive income,
net of income tax
Total comprehensive
income/(loss)
Share-based compensation
Acquisition of non-controlling
interest
Transfer to retained earnings
Balance at 31 December 2022
Profit for the year
Other comprehensive loss,
net of income tax
Total comprehensive
(loss)/income
Redomiciation to AIFC
Share-based compensation
Transfer to retained earnings
Balance at 31 December 2023
Stated
capital
account
$m
2,450
–
–
–
–
–
–
2,450
–
–
–
(2,450)
–
–
–
Share
capital
$m
Share
premium
$m
Share-based
compensation
reserve
$m
Cash flow
hedging
reserve
$m
–
–
–
–
–
–
–
–
–
–
–
14
–
–
14
–
–
–
–
–
–
–
–
–
–
–
2,436
–
–
2,436
31
–
–
–
13
–
(9)
35
–
–
–
–
11
(13)
33
–
–
16
16
–
–
–
16
–
(8)
(8)
–
–
–
8
Translation
reserve
$m
Retained
earnings
$m
(1,865)
–
1,587
(288)
Total
equity
$m
2,203
(288)
322
322
–
–
–
(1,543)
–
–
338
(288)
–
(24)
9
1,284
528
50
13
(24)
–
2,242
528
(520)
–
(528)
(520)
–
–
–
528
–
–
13
–
–
11
–
(2,063)
1,825
2,253
126
127
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements
1. General
Corporate information
Polymetal Group is a leading gold and silver mining group, operating in Kazakhstan and Russia.
Polymetal International plc (the “Company”) is the ultimate parent entity of Polymetal Group. The Company was incorporated on 29 July
2010 as a public limited company under Companies (Jersey) Law. On 8 August 2023, the Group completed the re-domiciliation of the
Company from Jersey to the Astana International Financial Centre ("AIFC"), Republic of Kazakhstan. The Company is listed on the AIX,
which has become the Company’s primary stock exchange, while its listing on London stock exchange was cancelled on 28 August
2023. The Company also maintains a secondary listing on Moscow Exchange (MOEX).
On 19 May 2023, JSC Polymetal, the holding company for the Group’s assets located in the Russian Federation, and its subsidiaries were
designated by the U.S. Department of State pursuant to Executive Order 14024 for operating in the metals and mining sector of the
Russian economy. Following the designation the Board of Directors of the Company (the “Board”) set up a special committee of
independent non-executive directors (the “Special Committee”) to ensure full and comprehensive compliance with U.S. sanctions. The
Company and its non-Russian subsidiaries are not subject to blocking sanctions.
In the light of these developments, and in the interest of preserving shareholder value, the Board and the Special Committee undertook a
strategic process to review all possible options in respect of JSC Polymetal and its subsidiaries (JSC Polymental Group) divestment in
order to restore value for Polymetal shareholders and de-risk its ongoing operations.
Based on circumstances existing as of 31 December 2023, the Group has determined that JSC Polymetal and its subsidiaries did not
meet the definition of the disposal group in accordance IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
In February 2024, the Group entered into contracts for the divestment of its Russian business through a sale of 100% JSC Polymetal’s
shares to a third party, JSC Mangazeya Plus, as described in Note 32. On 16 February 2024, US Department of the Treasury’s Office of
Foreign Asset Control (“OFAC”) confirmed to the Company that it would not impose sanctions on non-US persons, including Polymetal
International Plc, for participating in or facilitating such a transaction. On 7 March 2024, following receipt of required regulatory approvals
and shareholder approvals, the transaction was completed.
Going concern
In assessing its going concern status, the Group has taken into account of its principal risks and uncertainties, financial position, sources
of cash generation, anticipated future trading performance, its borrowings and other available credit facilities, and forecasted compliance
with covenants on those borrowings, and its capital expenditure commitments and plans.
In the going concern assessment, the Group also considered the implications of sanctions imposed by U.S. Department of State on JSC
Polymetal, the Company’s subsidiary in the Russian Federation, and the imminent sale of Russian business in March 2024, as described
above. The Group determined that these implications did not have any material effect on the Group’s liquidity position and its ability to
finance its obligations.
On 7 March 2024 the transaction was approved by the Shareholders General Meeting and, following receipt of required regulatory
approvals, the transaction was completed on the same day.
To assess the resilience of the Group’s going concern assessment in light of the macroeconomic volatility, management performed the
stress downside scenario that is considered plausible over the next 12 months from the date of approval of the 2023 consolidated
financial statements. As such, this does not represent the Group’s ‘best estimate’ forecast, but was considered in the Group’s
assessment of going concern, reflecting the current evolving circumstances and the most significant and plausible changes in macro
assumptions identified at the date of performing the going concern assessment.
The Group has already taken precautionary measures to manage liquidity and provide flexibility for the future. In addition, it was assumed
that the Group has adapted its sales routes and supply chain and the net cash flows generated will be available for use within the Group.
Under the stress scenario, the Group’s income and profits are affected by simultaneous decrease of gold prices by 5% and local currency
appreciation by 10%, as well as 10% overrun of development capital expenditure.
At the reporting date, the Group holds $329 million of cash and $100 million of undrawn credit facilities (excluding assets sold in March
2024), which when combined with the forecast net cash flows under the stress scenario above, is considered to be adequate to meet the
Group’s financial obligations as they fall due over the next 12 months. No borrowing covenant requirements are expected to be breached
in the stress scenario. The Group expects to settle obligations as they fall due but also has mitigating actions available such as reducing
production volumes and variable mining costs where possible, reducing and deferring non-essential and non-committed capital
expenditure.
The Board is therefore satisfied that the Group’s forecasts and projections, including the stress scenario above, demonstrate that the
Group has adequate resources to continue in operational existence for at least 12 months from the date of this report and that it is
appropriate to adopt the going concern basis in preparing the consolidated financial statements for the year ended 31 December 2023.
Basis of presentation
The Group’s annual consolidated financial statements for the year ended 31 December 2023 are prepared in accordance with
International Financial Reporting Standards (IFRS). The financial statements have been prepared on the historical cost basis, except for
certain financial instruments which are measured at fair value as of end of the reporting period and share-based payments which are
recognised at fair value as of the measurement date.
During the year ended 31 December 2023 management has reviewed the segmental presentation of financial information it requires to
assess performance and allocate resources, as a result the presentation of segmental information was re-assessed, including
comparative information as described in Note 5.
The Group determined that starting from August 2023, following the re-domiciliation of the Company from Jersey to AIFC in Kazakhstan
and due to the accumulation over time of those factors which are the main determinants of functional currency, there had been a change
in facts and circumstances surrounding the operations of the Company, indicating that the functional currency of the Company and some
of its intermediate holding companies had changed from the US Dollar to the KZT. In accordance with IAS 21 The Effects of Changes in
Foreign Exchange Rates, this change has been accounted for prospectively from 1 August 2023 (Note 2).
New standards adopted by the Group
•
IFRS 17 Insurance Contracts, effective for annual period beginning on or after 1 January 2023 with earlier application permitted;
• Amendments to IAS 1 and IFRS Practice Statement 2 requiring that an entity discloses its material accounting policies, instead of its
significant accounting policies, effective for annual period beginning on or after 1 January 2023 with earlier application permitted;
• Amendments to IAS 12 clarifying that the initial recognition exemption does not apply to transactions in which equal amounts of
deductible and taxable temporary differences arise on initial recognition, effective for annual period beginning on or after 1 January
2023 with earlier application permitted;
• Amendments to IAS 12 – International Tax Reform – Pillar Two Model Rules, introducing a temporary exception to the accounting
requirements for deferred taxes in IAS 12, so that an entity would neither recognise nor disclose information about deferred tax assets
and liabilities related to Pillar Two income taxes; and
• Amendments to IAS 8 replacing the definition of a change in accounting estimates with a definition of accounting estimates, effective
for annual period beginning on or after 1 January 2023 with earlier application permitted.
The Group has determined that these standards and interpretations do not have a material impact on its consolidated financial
statements or are not applicable to the Group.
New accounting standards issued but not yet effective
The following amendments to the accounting standards were in issue but not yet effective as of date of approval of these consolidated
financial statements:
• Amendments to IAS 1 Presentation of Financial Statements regarding non-current liabilities with covenants, effective for annual
periods beginning on or after 1 January 2024, with early application permitted;
• Amendments to IFRS 16 Leases regarding lease liabilities in sale and leaseback transactions, effective for annual period beginning on
or after 1 January 2024 with earlier application permitted;
• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures regarding supplier finance
arrangements, effective for annual period beginning on or after 1 January 2024 with earlier application permitted;
• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Disclosures of information that enables users of financial
statements to understand the impact of a currency not being exchangeable, effective for annual period beginning on or after
1 January 2025 with earlier application permitted; and
• Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures regarding the
sale or contribution of assets between an investor and its associate or joint venture, the effective date of the amendments has yet to
be set. However, earlier application of the amendments is permitted
The Group has determined that these standards and interpretations are unlikely to have a material impact on its consolidated financial
statements or are not applicable to the Group.
128
129
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Notes to the consolidated financial statements continued
2. Significant accounting policies
Basis of consolidation
Subsidiaries
The consolidated financial statements of the Group include the financial statements of the Company and its subsidiaries, from the date
that control effectively commenced until the date that control effectively ceased. Control is achieved where the Company is exposed, or
has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the
investee.
Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from
the effective date of acquisition and up to the effective date of disposal, as appropriate.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those
used by the Group.
All intra-group balances, transactions and any unrealised profits or losses arising from intra-group transactions are eliminated on
consolidation.
Changes to the Group’s ownership interests that do not result in a loss of control over the subsidiaries are accounted for as equity
transactions. The carrying amount of the Group’s interests and non-controlling interests are adjusted to reflect the change in their relative
interests in the subsidiaries. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the
consideration paid or received is recognised directly in equity and attributed to the owners of the Company.
When the Group loses control of a subsidiary, the profit or loss from the disposal is calculated as the difference between 1) the
aggregated fair value of the consideration received and the fair value of any retained interest and 2) the previous carrying amount of the
assets (including goodwill), and liabilities of the subsidiary and non-controlling interests.
If the Group retains a residual interest in the subsidiary sold, the remaining investment is reclassified under “Investments in associates
and joint ventures” as appropriate and remeasured at fair value through profit or loss. The total gain or loss recognised on the date when
control is lost corresponds to the sum of the gain or loss realised on the sold interest and the gain or loss arising from remeasurement at
fair value of the residual interest.
Business combinations
IFRS 3 Business Combinations applies to a transaction or other event that meets the definition of a business combination. When
acquiring new entities or assets, the Group applies judgement to assess whether the assets acquired and liabilities assumed constitute
an integrated set of activities, whether the integrated set is capable of being conducted and managed as a business by a market
participant, and thus whether the transaction constitutes a business combination, using the guidance provided in the standard.
Goodwill and goodwill impairment
Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill is
measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the
fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the
identifiable assets acquired and the liabilities assumed.
If the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the
amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree
(if any), the excess is recognised immediately in the consolidated income statement as a bargain purchase gain.
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to
each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which
goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be
impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the
carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
The recoverable amount of the relevant cash-generating units was determined based on value in use calculation. Value in use is based on
the application of the Discounted Cash Flow Method (DCF) using post-tax cash flows to the life of mine models based on proved and
probable ore reserves and certain resources where a relevant resource-to-reserve conversion ratio can be reasonably applied.
On disposal of a subsidiary, the attributable goodwill is included in the determination of the profit or loss from disposal.
Acquisition of mining licenses
The acquisition of mining licenses is often affected through a non-operating corporate entity. As these entities do not represent a
business, it is considered that the transactions generally do not meet the definition of a business combination and, accordingly, the
transaction is usually accounted for as the acquisition of an asset. The net assets acquired are accounted for at cost. Where asset
acquisition is achieved in stages net assets acquired are accounted for as the sum of cost of the original interest acquired and the cost of
additional interest acquired.
Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint
arrangement. Significant influence constitutes the power to participate in the financial and operating policy decisions of the investee but
does not extend to control or joint control over the enactment of those policies. The results and assets and liabilities of associates are
incorporated in the consolidated financial statements using the equity method of accounting.
A joint arrangement is defined as an arrangement of which two or more parties have joint control. Joint control is the contractually agreed
sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
A joint operation is a joint arrangement in which the parties that share joint control have rights to the assets, and obligations for the
liabilities, relating to the arrangement. This includes situations where the parties benefit from the joint activity through a share of the
output, rather than by receiving a share of the results of trading. In relation to its interest in a joint operation, the Group recognises: its
share of assets and liabilities; revenue from the sale of its share of the output and its share of any revenue generated from the sale of the
output by the joint operation; and its share of expenses.
A joint venture is a joint arrangement in which the parties that share joint control have rights to the net assets of the arrangement and is
accounted for using the equity accounting method.
When entering in a new joint arrangement, the Group applies judgement to assess whether the parties that have joint control over the
arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement (joint operation) or rights to the net
assets of the arrangement (joint venture), using the guidance provided in the standard. When a joint arrangement has been structured
through a separate vehicle, consideration has been given to the legal form of the separate vehicle, the terms of the contractual
arrangement and, when relevant, other facts and circumstances.
Equity method of accounting
Under the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated balance sheet at cost
and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the investee. When the
Group's share of the losses of an associate or a joint venture exceeds the Group's interest in that entity, the Group ceases to recognise its
share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or
made payments on behalf of the investee.
Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent
liabilities of an investee at the date of acquisition is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost
of acquisition, after reassessment, is recognised immediately in profit or loss.
The requirements of IAS 28 Investments in Associates and Joint Ventures are applied to determine whether any indicators that the interest
in an associate or a joint venture may be impaired. Where an indicator of impairment exists or the carrying value of the asset contains
goodwill with an indefinite useful life, the entire carrying amount of the investment (including goodwill) is tested for impairment in
accordance with IAS 36 Impairment of Assets as a single cash generating unit through the comparison of its recoverable amount (the
higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying
amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 Impairment of Assets.
When a Group entity transacts with its investees, profits and losses resulting from the transactions with the investee are recognised in the
Group's consolidated financial statements only to the extent of interests in the associate or the joint venture that are not related to the
Group.
130
131
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Notes to the consolidated financial statements continued
2. Significant accounting policies continued
Functional and presentation currency
The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it
operates. For all Russian entities the functional currency is the Russian Rouble (RUB). The functional currency of the Group’s entities
located and operating in Kazakhstan (Varvarinskoye JSC, Bakyrchik Mining Venture LLC, Inter Gold Capital LLC, Komarovskoye Mining
Company LLC) is the Kazakh Tenge (KZT).
The Group determined that from August 2023, following the re-domiciliation of the Company from Jersey to AIFC in Kazakhstan and due
to the accumulation over time of those factors which are the main determinants of functional currency, there had been a change in facts
and circumstances surrounding the operations of its parent company (Polymetal International plc) and some of its intermediate holding
companies indicating that the functional currency of these companies had changed from the the US Dollar to the KZT.
In accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates, this change has been accounted for prospectively from 1
August 2023.
The Group has chosen to present its consolidated financial statements in US Dollars ($), as management believes it is the most useful
presentation currency for international users of the consolidated financial statements of the Group as being common presentation
currency in the mining industry. Translation of the financial statements of the Group entities from their functional currencies to the
presentation currency is performed as follows:
• all assets and liabilities are translated at closing exchange rates at each reporting period end date;
• all income and expenses are translated at the average exchange rates for the periods presented, except for significant transactions
•
•
that are translated at rates on the date of such transactions;
resulting exchange differences are recognised in other comprehensive income and presented as movements relating to the effect of
translation to the Group’s presentation currency within the Translation reserve in statement of change in equity; and
in the consolidated statement of cash flows, cash balances at the beginning and end of each reporting period presented are
translated using exchange rates prevalent at those respective dates. All cash flows in the period are translated at the average
exchange rates for the periods presented, except for significant transactions that are translated at rates on the date of transaction.
Resulting exchange differences, if any, are presented as Effect of foreign exchange rate changes on cash and cash equivalents.
On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, or a disposal involving loss of
control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a jointly controlled entity that
includes a foreign operation, or a disposal involving loss of significant influence over an associate that includes a foreign operation), all of
the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to
profit or loss.
In the case of a partial disposal that does not result in the Group losing control over a subsidiary that includes a foreign operation, the
proportionate share of accumulated exchange differences are reattributed to non-controlling interests and are not recognised in the
consolidated income statement. For all other partial disposals (i.e. reductions in the Group's ownership interest in associates or jointly
controlled entities that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated
exchange differences is reclassified to the consolidated income statement.
Goodwill and fair value adjustments on identifiable assets and liabilities acquired arising on the acquisition of a foreign operation are
treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting
period. Exchange differences arising are recognised in equity.
The Group translates its income and expenses in presentation currency on a the monthly basis at monthly average rate. During the years
ended 31 December 2023 and 2022 exchange rates used in the preparation of the consolidated financial statements were as follows:
31 December 2023
Period ended
Average
Maximum monthly rate
Minimum monthly rate
31 December 2022
Period ended
Average
Maximum monthly rate
Minimum monthly rate
Russian Rouble/
US Dollar
Kazakh Tenge/
US Dollar
89.69
85.25
97.04
69.23
70.34
68.55
104.08
57.27
454.56
456.24
476.43
445.25
462.65
460.85
499.75
431.82
The Russian Rouble and Kazakh Tenge are not freely convertible currencies outside the Russian Federation and Kazakhstan,
accordingly, any translation of Russian Rouble and Kazakh Tenge denominated assets and liabilities into US Dollar for the purpose of the
presentation of consolidated financial statements does not imply that the Group could or will in the future realise or settle in US Dollars the
translated values of these assets and liabilities.
Foreign currency transactions
Transactions in currencies other than an entity’s functional currencies (foreign currencies) are recorded at the exchange rates prevailing
on the dates of the transactions. All monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates
prevailing at the reporting date. Non monetary items carried at historical cost are translated at the exchange rate prevailing on the date of
transaction. Non-monetary items carried at fair value are translated at the exchange rate prevailing on the date on which the most recent
fair value was determined. Exchange differences arising from changes in exchange rates are recognised in the consolidated income
statement. Exchange differences generated by monetary items that forms part of the intragroup net investment in the foreign operation
are recognised in the consolidated financial statements within foreign currency translation reserve.
Property, plant and equipment
Mining assets
Mining assets include the cost of acquiring and developing mining assets and mineral rights. Mining assets are depreciated to their
residual values using the unit-of-production method based on proven and probable ore reserves according to the JORC Code, which is
the basis on which the Group’s mine plans are prepared. Changes in proven and probable reserves are dealt with prospectively.
Depreciation is charged on new mining ventures from the date that the mining asset is capable of commercial production. In respect of
those mining assets whose useful lives are expected to be less than the life of the mine, depreciation over the period of the asset’s useful
life is applied.
Mineral rights for the assets under development are included within Exploration and development. When a production phase is started,
mineral rights are transferred into Mining assets and are depreciated as described below.
Capital construction-in-progress
Capital construction-in-progress assets are measured at cost less any recognised impairment. Depreciation commences when the
assets are ready for their intended use.
Exploration and evaluation assets
Mineral exploration and evaluation costs, including geophysical, topographical, geological and similar types of costs are expensed as
incurred until such time as the Group determines that reasonable prospects exist for the eventual economic extraction of minerals, which
is supported by management’s decision to prepare the mineral resource estimation for the relevant field. Mineral resource estimation
prepared in accordance with JORC is subsequently published on the Group’s corporate website.
Exploration assets representing mineral rights which were acquired as a result of a business combination or an asset acquisition in
accordance with IFRS 3 Business Combinations, are recognised as a result of the purchase price allocation where appropriate; and are
carried at deemed cost, being fair value as at the date of acquisition or at cost where a transaction is classified as an asset acquisition.
In accordance with IFRS 6 Exploration for and evaluation of mineral resources, the potential indicators of impairment include:
management’s plans to discontinue the exploration activities, lack of further substantial exploration expenditure planned, expiry of
exploration licenses in the period or in the nearest future, or existence of other data indicating the expenditure capitalised is not
recoverable. At the end of each reporting period, management assesses whether such indicators exist for the exploration and evaluation
assets capitalised.
Development assets
Exploration and evaluation expenditures are transferred to development assets when commercially-viable reserves are identified, so that
the entity first establishes proved and probable reserves in accordance with the JORC Code and a respective mining plan and model are
prepared and approved. At the time of reclassification to development assets, exploration and evaluation assets are assessed for
impairment based on the economic models prepared.
The costs to remove any overburden and other waste materials to initially expose the ore body, referred to as stripping costs, are
capitalised as a part of development assets when these costs are incurred.
Non-mining assets
Non-mining assets are depreciated to their residual values on a straight-line basis over their estimated useful lives. When parts of an item
of property, plant and equipment are considered to have different useful lives, they are accounted for and depreciated separately.
Depreciation methods, residual values and estimated useful lives are reviewed at least annually.
Estimated useful lives are as set out below:
Machinery and equipment
Transportation and other assets
5 – 20 years
3 – 10 years
Gains or losses on disposal of property, plant and equipment are determined by comparing the proceeds from disposal with the asset’s
carrying amount at the date. The gain or loss arising is recognised in the consolidated income statement.
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Notes to the consolidated financial statements continued
2. Significant accounting policies continued
Stripping costs
In open pit mining operations, it is necessary to remove overburden and other waste in order to access the ore body. During the mines
under development stage, these costs are capitalised as part of the mines development costs. At the same time the Company incurs
stripping cost during production phase of mine, during which such costs are considered to create two benefits, being the production of
inventory (ore mined) in the current period and/or improved access to the ore body to be mined in the future. Where stripping costs are
incurred and the benefit that was created is improved access to the component of the ore body to be mined in the future, the stripping
costs are recognised as a stripping activity assets, if the following criteria are met:
• Future economic benefits (being improved access to the ore body) are probable;
• The component of the ore body for which access will be improved can be accurately identified; and
• The costs associated with the improved access can be reliably measured.
If not all of the above-mentioned criteria are met, the stripping costs are included in the production cost of inventory (ore mined),
otherwise the stripping costs in excess of the average long term ore-to-waste ratio evaluated for the life of mine of that component as
recognised as non-current assets and presented within property, plant and equipment as a separate class of assets.
Estimated ore reserves
Estimated proven and probable ore reserves reflect the economically recoverable quantities which can be legally recovered in the future
from known mineral deposits. The Group’s reserves are estimated in accordance with JORC Code.
Impairment of property, plant and equipment
An impairment review of property, plant and equipment is carried out when there is an indication that those assets have suffered an
impairment loss or there are impairment reversal indicators. If any such indication exists, the carrying amount of the asset is compared to
the estimated recoverable amount of the asset in order to determine the extent of the impairment loss or its reversal (if any). Where it is
not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-
generating unit (CGU) to which the asset belongs.
A CGU is defined as the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows
from other assets or groups of assets. Assets are combined into a CGU consisting of the assets for which it is impossible to estimate the
recoverable amount individually, which is the case when:
•
•
the asset does not generate cash inflows that are largely independent of those from other assets; and
the asset’s value in use cannot be estimated to be close to its fair value less costs of disposal (which is the case when the future cash
flows from continuing use of the asset cannot be estimated to be negligible).
Recoverable amount is the higher of fair value less costs of disposal and value in use. Value in use is based on the application of the
Discounted Cash Flow Method (DCF) using post-tax cash flows and post-tax discount rate. The DCF method is applied to the
development of proved and probable reserves and certain resources where a relevant resource-to-reserve conversion ratio can be
reasonably applied.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the
asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately in the
consolidated income statement.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the original carrying
amount that would have been determined had no impairment loss been recognised in prior periods. Impairment loss may be
subsequently reversed if there has been a significant change in the estimates used to determine the asset’s recoverable amount since the
last impairment loss was recognised.
A reversal of an impairment loss is recognised in the consolidated income statement immediately.
Inventories
Metal inventories
Inventories including ore stockpiles, metals in concentrate and in process, Doré and refined metals are stated at the lower of production
cost and net realisable value. Production cost is determined as the sum of the applicable costs incurred directly or indirectly in bringing
inventories to their existing condition and location. Work in-process, metal concentrate, Doré and refined metal are valued at the average
total production costs at each asset’s relevant stage of production (i.e. the costs are allocated proportionally to unified metal where
unified metal is calculated based on prevailing market metal prices). Ore stockpiles are valued at the average cost of mining that ore.
Where ore stockpiles and work in-process are not expected to be processed within 12 months, those inventories are classified as
non-current.
Net realisable value represents the estimated selling price for that product based on forward metal prices for inventories which are
expected to be realised within 12 months, and the flat long-term metal prices for non-current inventories, less estimated costs to
complete production and selling costs.
Consumables and spare parts
Consumables and spare parts are stated at the lower of cost or net realisable value. Cost is determined on the weighted average moving
cost. The portion of consumables and spare parts not reasonably expected to be used within one year is classified as a long-term asset
in the Group's consolidated statement of financial position. Net realisable value represents the estimated selling price less all estimated
costs of completion and costs to be incurred in marketing, selling and distribution.
Mining tax
Mining tax includes royalties payable in Russian Federation and Kazakhstan. Mining tax in Russian Federation and Kazakhstan is
calculated based on the value of the precious metals extracted in the period. This value is usually determined based on the realised
selling price of precious metals or, in case if there were no sales during the period, cost of production of metals extracted (Russian
Federation) or the average market price (Kazakhstan) during the reporting period. Mining tax is charged to cost of production and
absorbed into metal inventories (Note 7).
Financial instruments
Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the
instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition
or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised
immediately in the consolidated income statement.
Trade receivables without provisional pricing that do not have a significant financing component (determined in accordance with IFRS 15
Revenue from Contracts with Customers) are are initially measured at their transaction price.
Financial assets
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the
classification of the financial assets. Financial assets are classified as either financial assets at amortised cost or at fair value through
profit or loss (FVTPL) depending upon the business model for managing the financial assets and the nature of the contractual cash flow
characteristics of the financial asset.
Trade receivables without provisional pricing that do not contain provisional price features, loans and other receivables are held to collect
the contractual cash flows and therefore are carried at amortised cost adjusted for any loss allowance. The loss allowance is calculated in
accordance with the impairment of financial assets policy described below.
Trade receivables arising from the sales of copper, gold and silver concentrate with provisional pricing features are exposed to future
movements in market prices as described below and therefore contain an embedded derivative. IFRS 9 does not require that these
embedded derivatives are separated; instead, the contractual cash flows of the financial asset are assessed in their entirety. Trade
receivables from sales of copper, gold and silver concentrates have contractual cash flow characteristics that are not solely payments of
principal and interest, and are therefore measured at fair value through profit or loss in accordance with IFRS 9 and do not fall under the
expected credit losses model (ECL) described below.
Effective interest rate method
The effective interest rate method is a method of calculating the amortised cost of a financial instrument and of allocating interest income
or expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash receipts or payments
(including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) through the expected life of the financial instrument, or, where appropriate, a shorter period, to the net carrying amount on
initial recognition.
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2. Significant accounting policies continued
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses (ECL) on investments in debt instruments that are measured at
amortised cost, trade and other receivables and contract assets, except for trade accounts receivable with provisional pricing. The
amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the
respective financial instrument.
The Group always recognises lifetime ECL for trade receivables and other receivables. The expected credit losses on these financial
assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific
to the receivables, general economic conditions and assessment of both the current as well as the forecast direction of conditions at the
reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial
recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group
measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial
instrument that are possible within 12 months after the reporting date.
The Group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no
realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in
the case of trade receivables, when the amounts are over two years past due, whichever occurs sooner. Financial assets written off may
still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate. Any
recoveries made are recognised in profit or loss.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor
retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its
retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and
rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
Financial liabilities
Financial liabilities are initially classified and subsequently measured at amortised cost or FVTPL.
A financial liability is classified as and measured at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are
recognised in profit or loss.
A derivative is defined as a financial instrument or other contract within the scope of IFRS 9 with all three of the following characteristics:
•
•
•
its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange
rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the
variable is not specific to a party to the contract. Inclusion of the term 'non-financial variable specific to a party to the contract' is
limited to excluding insurance contracts from the definition of a derivative.
it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that
would be expected to have a similar response to changes in market factors; and
it is settled at a future date.
Borrowings, representing financial contracts for unconditional repayment of principal and interest under a loan agreement, and other
financial liabilities, including trade payables, are subsequently measured at amortised cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognised in
profit or loss.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The
difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the
consolidated income statement.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in the consolidated income statement in the period in which they are incurred.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, cash deposits and highly liquid investments with original maturities of three months
or fewer, which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting
date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
Environmental obligations
An obligation to incur environmental restoration, rehabilitation and decommissioning costs arises when disturbance is caused by the
development or ongoing production of mining assets. Such costs arising from the decommissioning of plant and other site preparation
work, discounted to their net present value using a risk-free rate applicable to the future cash flows, are provided for and capitalised at
the start of each project, as soon as the obligation to incur such costs arises. These costs are recognised in the consolidated income
statement over the life of the operation, through the depreciation of the asset in the cost of sales line and the unwinding of the discount
on the provision in the finance costs line. Costs for restoration of subsequent site damage which is created on an ongoing basis during
production are provided for at their net present values and recognised in the consolidated income statement as extraction progresses.
Changes in the measurement of a liability relating to the decommissioning of plant or other site preparation work (that result from changes
in the estimated timing or amount of the cash flow or a change in the discount rate), are added to or deducted from the cost of the related
asset in the current period. If a decrease in the liability exceeds the carrying amount of the asset, the excess is recognised immediately in
the consolidated income statement.
The provision for closure cost obligations is remeasured at the end of each reporting period for changes in estimates and circumstances.
Changes in estimates and circumstances include changes in legal or regulatory requirements, increased obligations arising from
additional mining and exploration activities, changes to cost estimates and changes to the risk free interest rate.
Employee benefit obligations
Remuneration paid to employees in respect of services rendered during a reporting period is recognised as an expense in that reporting
period. The Group pays mandatory contributions to the state social funds, including the Pension Fund of the Russian Federation and
Kazakhstan, which are recorded as an expense over the reporting period based on the related employee service rendered.
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2. Significant accounting policies continued
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. Income taxes are computed in accordance with
the laws of countries where the Group operates.
Current tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the consolidated income
statement because of items of income or expense that are taxable or deductible in other periods and items that are never taxable or
deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of
the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for
all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that
it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax
assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future (judged to be one year). Deferred tax assets arising from deductible
temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will
be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or
the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the
Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets
and liabilities on a net basis.
Recognition of current and deferred tax
Current and deferred tax is recognised in the consolidated income statement, except when they relate to items that are recognised in the
consolidated statement of comprehensive income or directly in equity, in which case, the current and deferred tax is also recognised in
consolidated statement of comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the
initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
Uncertain tax positions
Provision for uncertain tax positions is recognised within current tax when management determines that it is probable that a payment will
be made to the tax authority. For such tax positions the amount of the probable ultimate settlement with the related tax authority is
recorded. When the uncertain tax position gives rise to a contingent tax liability for which no provision is recognised, the Group discloses
tax-related contingent liabilities and contingent assets in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Total exposures identified as of 31 December 2023 are disclosed in Note 26.
Revenue recognition
The Group has three major streams: the sale of gold and silver bullions; sale of copper, gold and silver concentrate; and sale of Doré.
Revenue is measured at the fair value of consideration to which the entity expects to be entitled in a contract with a customer in exchange
for transferring promised goods, excluding amounts collected on behalf of third parties, such as value added tax (VAT). Group recognises
revenue when it transfers control of a product to a customer.
Sale of gold and silver bullion
Metal sales includes sales of refined gold and silver, which are generally physically delivered to customers in the period in which they are
produced, with their sales price based on prevailing spot market metal prices.
Revenue from metal sales is recognised when control over the metal is transferred to the customer, which generally occurs when the
refined gold and silver has been accepted by the customer. Once the customer has accepted the metals, the significant risks and
rewards of ownership have typically been transferred and the customer is able to direct the use of and obtain substantially all of the
remaining benefits from the metals.
Sales of copper, gold and silver concentrate
The Group sells copper, gold and silver concentrate under pricing arrangements whereby the final price is determined by the quoted
market prices in a period subsequent to the date of sale. These quotation periods differ from 1 to 4 months, depending on the specific
terms of the relevant agreement.
For shipments under the Incoterms Cost, Insurance and Freight (CIF) and Cost and Freight (CFR), control passes to the customer and the
revenue is recorded at the time of loading, whilst for shipments under the Incoterms Delivery at Place (DAP) and Delivery at Terminal
(DAT), control passes when the goods are delivered at an agreed destination. The proportion of concentrate sold on CIF or CFR
Incoterms is insignificant, and therefore no separate material performance obligations for freight and insurance services are recognised.
Revenue is initially recognised based on Polymetal’s estimate of copper, gold and silver content in the concentrate and using the forward
London Bullion Market Association (LBMA) or London Metal Exchange (LME) price, adjusted for the specific terms of the relevant
agreement, including refining and treatment charges which are subtracted in calculating the provisional amount to be invoiced.
Subsequent adjustments to pricing during the quotation period is not considered to be variable consideration under IFRS 15, as the
Group’s performance obligation has been satisfied at the point of delivery. Trade receivables arising from the sales of copper, gold and
silver concentrate with provisional pricing features are accounted for under IFRS 9 Financial Instruments as described above. The
provisionally priced accounts receivable, outstanding as of each reporting date, are marked to market using the forward price for the
quotation period under the relevant agreement with mark-to-market adjustments recognised within revenue. Ore sales arrangements are
substatially similar to the copper, gold and silver concentrate pricing arrangements described above.
Doré
Doré sales arrangements are similar to the copper, gold and silver concentrate pricing arrangements described above, with shorter
quotational periods of up to 14 days.
Share-based compensation
The Group applies IFRS 2 Share-based Payments to account for share-based compensation. IFRS 2 requires companies to recognise
compensation costs for share-based payments to employees based on the grant-date fair value of the award.
The fair value of the awards granted is recognised as a general, administrative and selling expense over the vesting period with a
corresponding increase in the share-based compensation reserve. Upon the exercise of the awards the amounts recognised within the
share-based compensation reserve are transferred to the share capital and share premium.
Earnings per share
Earnings per share calculations are based on the weighted average number of common shares outstanding during the period. Diluted
earnings per share are calculated using the treasury stock method, whereby the proceeds from the potential exercise of dilutive stock
options with exercise prices that are below the average market price of the underlying shares are assumed to be used in purchasing the
Company’s common shares at their average market price for the period.
3. Critical accounting judgements and key sources of estimation uncertainty
In the course of preparing the consolidated financial statements, management necessarily makes judgements and estimates that can
have a significant impact on those financial statements. The determination of estimates requires judgements which are based on
historical experience, current and expected economic conditions, and all other available information.
Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions recognised in the period in which the estimates
are revised and in the future periods affected. The judgements involving a higher degree of estimation or complexity are set out below.
Critical accounting judgements
The following are the critical accounting judgements (apart from judgements involving estimation which are dealt with separately below),
made during the year that had the most significant effect on the amounts recognised in the consolidated financial statements.
Re-assessment and impairment of Amursk POX CGU
Impairment charges are assessed at the CGU level. Significant management judgement is applied in determining the Group’s CGUs,
particularly when assets relate to integrated operations, and where changes in CGU determinations could impact the impairment
recognised. It was previously determined that Amursk POX represented a shared corporate asset in accordance with IAS 36 Impairment
of assets. During the year ended 31 December 2023, the Group has determined that due to the changes in the mode of assets utilisation
that generate a revenue stream for Amursk POX, it became a separate CGU. Such changes included continued use of Amursk POX
processing facility to treat Kyzyl refractory concentrate on the terms of tolling agreement, as entailed by provisions of JSC Polymetal
divestment (Notes 1, 32) and the offtake arrangement over Veduga concentrate, described below. This judgement was applied to the
impairment review as of 31 December 2023, resulting in the impairment charge of $165 million (Note 17).
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3. Critical accounting judgements and key sources of estimation uncertainty
continued
Indicators of impairment and reversal of impairment
The Group considers both external and internal sources of information in assessing whether there are any indications that CGUs are impaired.
The external sources of information the Group considers include changes in the market, economic and legal environment in which the Group
operates, that are usually not within its control, and are expected to affect the recoverable amount of CGUs. Internal sources of information
include the manner in which mining properties, plant and equipment are being used or are expected to be used; and indicators of the economic
performance of the assets, historical exploration and operating results. The primary external factors considered are changes in spot and forecast
metal prices, market rates of returns that form discount rates, and changes in laws and regulations. The primary internal factors considered are
the Group’s current mine performance against expectations, changes in mineral reserves and resources, life of mine plans and exploration
results.
Assets (other than goodwill) that have been previously impaired should be assessed for indicators of both impairment and impairment reversal.
Such assets are generally carried on the balance sheet at a value close to their recoverable amount at the last assessment. Therefore in principle
any change to operational or macroeconomic parameters could result in further impairment or impairment reversal if an indicator is identified.
During year ended 31 December 2023 the Group determined that due to updated operational plans and futher advancement of the project,
impairment loss previously recognised for Veduga was fully reversed as detailed in Note 17. As a result the reversal of impairment loss of
$68 million was recorded.
Other significant operating assets that the Group has previously impaired include Nezhda-Prognoz and Kutyn CGU. These assets had combined
carrying value of $751 million within property, plant and equipment as at 31 December 2023. Despite the external indicators such as
commodities’ prices and foreign exchange rates showed favorable changes, there was no significant positive change in these CGUs’ expected
economic performance, and therefore no indicators of the reversal of previously recognised impairment loss were identified.
Veduga (Amikan GRK LLC) Joint Venture
In September 2023, the Group disposed of the stake in Amikan LLC (holder of Veduga deposit license), which resulted in a loss of control over
subsidiary, as described in Note 4. The Group retained interest of 49.9% in Amikan and entered into a number of corporate arrangements with
the new shareholder regarding project financing, governance and operations.
When the Group enters into an arrangement where it has the power to participate in the financial and operating policy decisions of an investee or
into arrangements with other parties for the joint ownership of particular assets or developments, it must assess whether the arrangements
constitute significant influence, control, joint operations or a joint venture based on the rights and obligations of the parties to the arrangements
(Note 2 sets out the related accounting policies).
Based on the governance structure of the investee, it was determined that the arrangement requires the unanimous consent of the parties
sharing control. The preliminary offtake arrangement to purchase the output by Amursk POX, entailed by the shareholders agreement, does not
indicate that the parties have rights to the substantially all economic benefits of the assets and, therefore, in effect do not have the obligation for
liabilities, as pricing mechanism relates only to the market metal price and related adjustments and is in line with the market practice, with no
additional financing arrangements.
Therefore it was concluded that the joint arrangement provides the parties with rights to the net assets of the arrangement and, therefore, the
retained investment represents a joint venture. The retained investment was initially recognised at fair value as of date of transaction, as described
in Note 4.
Accounting for acquisitions
To determine the appropriate accounting approach to be followed for an acquisition transaction, the Group applies judgement to assess whether
the acquisition is of a business, and therefore within scope of IFRS 3 Business Combinations, or is of a group of assets that do not constitute a
business and is therefore outside scope of IFRS 3. In making this determination, management evaluates the inputs, processes and outputs of the
asset or entity acquired. Judgement is used to determine whether an integrated set of activities and assets is capable of being conducted and
managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits directly to investors or other
owners, members or participants. The acquisitions of subsidiaries during reporting year have been assessed as asset acquisitions (Note 4).
Recoverability of exploration and evaluation assets
Exploration and evaluation assets include mineral rights and exploration and evaluation costs, including geophysical, topographical, geological
and similar types of costs. Exploration and evaluation costs are capitalised if management concludes that future economic benefits are likely to
be realised and determines that economically viable extraction operation can be established as a result of exploration activities and internal
assessment of mineral resources.
According to IFRS 6 Exploration for and evaluation of mineral resources, the potential indicators of impairment include: management’s plans to
discontinue the exploration activities, lack of further substantial exploration expenditure planned, expiry of exploration licences in the period or in
the nearest future, or existence of other data indicating the expenditure capitalised is not recoverable. At the end of each reporting period,
management assesses whether such indicators exist for the exploration and evaluation assets capitalised, which requires significant judgement.
During the year ended 31 December 2023 the Group recognised impairment loss related to the individual exploration and evaluation assets of
$29 million as detailed in Note 17.
Use of estimates
The preparation of financial statements requires the Group to make estimates and assumptions that affect the amounts of the assets and
liabilities recognised, amounts of revenue and expenses reported, and contingent liabilities disclosed, as of the reporting date.
The determination of estimates is based on current and expected economic conditions, as well as historical data and statistical and
mathematical methods as appropriate.
Key sources of estimation uncertainty
Key sources of estimation uncertainty reflect those sources of estimation uncertainty which may have a possible material impact of resulting in a
material adjustment to the carrying amount of assets and liabilities within the next financial year. They include: cash flow projections for
impairment testing and impairment reversal, valuation of contingent consideration assets and liabilities and calculation of net realisable value of
stockpiles and work-in progress, mineral reserves and resources assessment and life of mine plans, useful lives of production and other assets,
environmental provision and recoverability of deferred tax assets.
DCF models are developed for the purposes of impairment testing, valuation of contingent consideration assets and liabilities, calculation of net
realisable value of metal inventories and assessment of the recoverability of deferred tax assets. Expected future cash flows used in DCF
models are inherently uncertain and could change over time. They are affected by a number of factors including ore reserves, together with
economic factors such as commodity prices, exchange rates, discount rates and estimates of production costs and future capital expenditure.
• Ore reserves and mineral resources – Recoverable reserves and resources are based on the proven and probable reserves and
resources in existence. Reserves and resources are incorporated in projected cash flows based on ore reserve statements and
exploration and evaluation work undertaken by appropriately qualified persons (see below). Mineral resources, adjusted by certain
conversion ratios, are included where management has a high degree of confidence in their economic extraction, despite additional
evaluation still being required prior to meeting the required confidence to convert to ore reserves.
• Commodity prices – Commodity prices are based on latest internal forecasts, benchmarked against external sources of information.
Polymetal currently uses flat real long-term gold and silver prices of $1,900 per ounce for 2024, $1,800 per ounce from 2025 per
ounce (2022: of $1,800 per ounce for 2023, $1,700 per ounce from 2024) and $23 per ounce (2022: $20 per ounce for 2023, $21 per
ounce from 2024), respectively.
• Foreign exchange rates – Foreign exchange rates are based on observable spot rates, or on latest internal forecasts, benchmarked
with external sources of information for relevant countries of operation, as appropriate. The RUB/$ exchange rates are estimated at
90 RUB/$ for 2024 (2022: 65 RUB/$ for 2023, at 73 RUB/$ for 2024 and 75 RUB/$ from 2025). The KZT/$ exchange rate are
estimated at 450 KZT/$ for 2024 and 500 KZT/$ for 2025 and beyond (2022: 450 KZT/$ for 2023, at 502 KZT/$ from 2024),
respectively.
• Discount rates – The Group used a post-tax real discount rate of 12.5% for Russia assets and 8.7% for Kazakhstan (2022: 14.1% for
Russia assets and 9% for Kazakhstan). Post-tax cash flow projections used in the value in use impairment models are discounted
based on these rates.
• Operating costs, capital expenditure and other operating factors – Cost assumptions incorporate management experience and
expectations, as well as the nature and location of the operation and the risks associated therewith. Underlying input cost
assumptions are consistent with related output price assumptions. Other operating factors, such as the timelines of granting licences
and permits are based on management’s best estimate of the outcome of uncertain future events at the balance sheet date.
Sensitivity analysis
The impairment charge of $165 million for Amursk POX property, plant and equipment was recognised during the year ended
31 December 2023 (Note 17). The recoverable amount was estimated based on a value in use calculation.
The impairment assessment is inherently sensitive to plausible changes in certain economic and operational key input assumptions within
the next financial year, which could increase or reduce the CGU’s recoverable value estimate.
Management performed an analysis as to whether a reasonably possible adverse change to any of the key assumptions would lead to
further impairment. The table below summarises the outcomes of the following isolated scenarios and respective additional impairment
that would be recognised.
Scenario
10% simultaneous decrease in gold and silver prices over the life of mine
10% appreciation in RUB/$ exchange rates
10% increase in operating expenses over the life of mine
1% increase in the discount rate applied
$m
73
6
60
26
Each of the sensitivities above has been determined by assuming that the relevant key assumption moves in isolation, and without regard
to potential mine plan changes and other management decisions which would be taken to respond to adverse changes in existing
management projections.
The sensitivities of contingent consideration liabilities measured at FVTPL of $44 million at 31 December 2023 (31 December 2022:
$36 million) and inventories held at net realisable value of $80 million at 31 December 2023 (31 December 2022: $95 million) to a
reasonably possible change in key assumptions described above are not considered material due to materiality of the respective
balances.
140
141
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Notes to the consolidated financial statements continued
3. Critical accounting judgements and key sources of estimation uncertainty
continued
Recoverability of deferred tax assets
Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be utilised. This review takes into account the factors such as
estimated future production, projected commodity prices, operating costs, future capital expenditure, as described above. If actual
results differ from these estimates or if these estimates must be adjusted in future periods, the financial position, results of operations and
cash flows may be negatively affected. Deferred tax assets arising from tax losses carried forward, as well as applicable tax legislation,
are described in Note 16.
Climate change
We have assessed and set out the Group’s climate risks and opportunities as part of our commitment to climate disclosure within the
Strategic Report. Mitigation and adaptation measures that may be required in the future to combat the physical and transition risks of
climate change could also have potential implications for the Group’s financial statements. This would be the case where assets and
liabilities are measured based on an estimate of future cash flows.
In preparing the Group’s financial statements, climate-related strategic decisions have impacted the following:
• Our decarbonisation and clean energy initiatives considered and approved by the Board were included in future cash flow projections,
underpinned by estimates for recoverable amounts of property, plant and equipment, as deemed relevant; and
• The provision for mine closure costs impacted by climate risks and opportunities is set out in Note 24 to the consolidated financial
statements.
We have adopted both mitigation and adaptation measures within our climate management system. We focus on renewable energy, carbon-
intensive fuel replacement and innovative technologies to both mitigate climate change impacts and to reduce our carbon footprint. The
adaptation measures we use are based on climate models, which inform the design, construction, operation and closure of our mining assets.
Significant judgements and key estimates made by the Group may be impacted in the future by changes to our climate change strategy or in
global commitments to decarbonisation. This could, in turn, result in material changes to the financial results and the carrying values of certain
assets and liabilities in future reporting periods. As at the reporting date, the Group believes that there is no material impact on balance sheet
carrying values of assets or liabilities.
4. Acquisitions and disposals
Veduga (Amikan GRK LLC)
In September 2023, the Group has agreed to cancel its historic call and put options and a shareholder agreement over 40.6% share in GRK
Amikan LLC (“Amikan”) with the previous joint venture (JV) partner (refer to the transaction disclosure in the consolidated financial statements for
the year ended 31 December 2020). This allowed the Group to form a new joint venture over Amikan. The 40.6% stake was acquired from the
previous JV partner by a new third party. Subsequently, JSC Polymetal disposed of its 9.5% stake in Amikan to the same third party for a сash
consideration of $21 million. As a result, the Group now owns 49.9% interest of Amikan. Simultaneously, JSC Polymetal entered into a number
of corporate arrangements with the new shareholder regarding Amikan project financing, governance and operations.
In 2020 at the inception of options the Group determined that the call option over 40.6% stake represents a derivative containing potential voting
right, that provided the Group access to the returns associated with related ownership interest, and thus in accordance with IFRS 10
Consolidated financial statements the Group accounted for the options over 40.6% interest as if they were already exercised and consolidated
100% interest in Amikan with the option exercise price recognised as a deferred consideration payable. At the disposal date, the fair value of
deferred consideration payable amounted to $88 million, which was recognised as a part of the consideration received in disposal.
As a result of this transaction the Group has effectively disposed of 50.1% interest of the investee. The retained interest of 49.9% was valued at
the fair value of $110 million at the date when control was lost in accordance with IFRS 10 requirements. The fair value was determined based
on consideration received from third party for 9.5% stake, which was supported by life-of-mine model.
Cash consideration received
Deferred consideration cancelled
Fair value of the investment retained
Less net assets disposed of
Gain on disposal of subsidiary
$m
21
88
110
(106)
113
Other acquisitions
Other individually insignificant acquisitions of exploration assets during the year ended 31 December 2023 of $52 million in total, related
to consolidation of certain former joint ventures, including the Baksy project in Kazakhstan (Note 20), and the acquisition a number of
exploration interests in Russia. All transactions represented asset acquisitions in accordance with IFRS 3 Business Combinations, as the
acquired companies did not have any substantive processes required to create outputs. The summary of net assets acquired is
presented below:
Property, plant and equipment
Other assets/(liabilities), net
Intercompany loans and other accounts
Net assets acquired
Cost of equity investment reclassified
Loan assignment
Cash consideration
Total consideration
5. Segment information
Baksy
$m
NORK LLC
$m
OGK LLC
$m
Utkinskaya
$m
Uenma
$m
Total equity
$m
19
(1)
(5)
13
–
–
13
13
5
–
(4)
1
–
–
1
1
3
1
(1)
3
1
–
2
3
19
–
–
19
–
17
2
19
6
–
–
6
–
–
6
6
52
–
(10)
42
1
17
24
42
The Group’s operating segments are aligned to those businesses that are evaluated regularly by the chief operating decision maker (the
CODM) in deciding how to allocated resources and in assessing performance. Operating segments with similar economic characteristics
are aggregated into reportable segments.
In May 2023, following the designation of JSC Polymetal by the U.S. Department of State pursuant to Executive Order 14024, the
governance and management structure of the Group was changed. As a part of ring-fencing the Group’s Russian subsidiaries to ensure
sanctions compliance the management of the Russian operations has been delegated to the executives of JSC Polymetal, while the
Company’s Board and management focused on the operations of the Group’s assets located in Kazakhstan, as well as separation of the
Group’s assets by jurisdiction, as described in Note 1.
As a result of these changes management of the Company has re-assessed presentation of financial information by segments it requires
to assess performance and allocate resources. It was concluded that jurisdiction-based reporting format is more meaningful from a
management and forecasting perspective, as well as better aligned to the new management structure, internal reporting and processes.
The comparative information was presented in line with the current year format.
Therefore the Group has identified two reportable segments in 2023:
• Kazakhstan (Varvarinskoye JSC, Komarovskoye Mining Company LLC, Bakyrchik Mining Venture LLC);
• Russian Federation (aggregating Khabarovsk, Magadan, Ural and Yakutia operating segments).
The measure which management and the CODM use to evaluate the performance of the Group is a segment Adjusted EBITDA, which is
an Alternative Performance Measure (APM).
Based on the governance structure of the investee, policy-making processes and the board of directors composition, it was determined that all
key decisions require the unanimous consent of the parties sharing control and provides the parties of the joint arrangement with rights to its net
assets, therefore, the investment was classified as a joint venture. Subsequently, the investment is accounted for using the equity method.
The accounting policies of the reportable segments are consistent with those of the Group’s accounting policies under IFRS. Revenue
and cost of sales of the production entities are reported net of any intersegmental revenue and cost of sales, related to the intercompany
sales of ore and concentrates.
The summary of transaction is presented below.
Property, plant and equipment
Inventories
Other assets
Income tax
Accounts payable
Intercompany loans and other accounts
Net assets of disposed of
142
Business segment current assets and liabilities, other than current inventory, are not reviewed by the CODM and therefore are not
disclosed in these consolidated financial statements. Additionally, net debt is included in performance measures, reviewed by CODM.
The segment adjusted EBITDA reconciles to the profit before income tax as follows:
$m
162
22
3
(14)
(3)
(64)
106
143
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
5. Segment information continued
Period ended 31 December 2023
Period ended 31 December 2022
Revenue from external customers
Cost of sales, excluding depreciation, depletion and
write-down of inventories to net realisable value
Cost of sales
Depreciation included in Cost of sales
Reversal/(write-down) of metal inventories to net
realisable value
(Write-down)/reversal of non-metal inventories to
net realisable value
Rehabilitation expenses
General, administrative and selling expenses,
excluding depreciation, amortisation and
share-based compensation
General, administrative and selling expenses
Depreciation included in SGA
Share-based compensation
Other operating expenses excluding additional tax
charges
Other operating expenses, net
Bad debt and expected credit loss allowance
Additional tax charges/fines/penalties
Share of losses of associates and joint ventures
Kazakhstan
893
378
442
(64)
–
–
–
58
71
(2)
(11)
18
18
–
–
–
Russia
2,132
833
1,017
(190)
8
(2)
–
198
203
(5)
–
80
99
(19)
–
2
Total
3,025
1,211
1,459
(254)
8
(2)
–
256
274
(7)
(11)
98
117
(19)
–
2
Adjusted EBITDA
439
1,019
1,458
Depreciation
Rehabilitation expenses
Write-down/(reversal) of non-metal inventories to
net realisable value
(Reversal)/write-down of metal inventories to net
realisable value
Impairment of non-current assets, net
Share-based compensation
Bad debt and expected credit loss allowance
Additional tax charges/fines/penalties
Operating loss
Foreign exchange loss
Gain/(loss) on disposal of subsidiaries
Change in fair value of financial instruments
Finance expenses
Finance income
Profit/(loss) before income tax
Income tax
Profit/(loss) for the year
Current metal inventories
Current non-metal inventories
Non-current segment assets:
Property, plant and equipment, net
Goodwill
Non-current inventories
Investments in associates
Total segment assets
Additions to non-current assets:
Property, plant and equipment
Acquistion of assets
Total segment liabilities
66
–
–
–
16
11
–
–
346
171
62
810
–
41
6
1,090
150
19
195
–
2
(8)
110
–
19
–
701
647
298
2,188
11
74
123
3,341
606
33
Kazakhstan
933
340
415
(75)
–
–
–
47
62
(2)
(13)
30
32
–
(2)
–
516
77
–
–
–
–
13
–
2
Russia
1,868
1,015
1,275
(197)
(65)
1
1
241
249
(8)
–
111
110
1
–
–
501
205
(1)
(1)
65
825
–
(1)
–
261
–
2
(8)
126
11
19
–
1,047
424
(591)
(174)
113
(8)
(162)
27
843
(315)
528
818
360
2,998
11
115
129
4,431
756
52
111
46
–
696
–
34
–
887
108
–
594
306
–
2,696
14
99
13
3,722
775
49
6. Revenue
Gold (thousand ounces)
Silver (thousand ounces)
Copper (tonnes)
Total
Gold (thousand ounces)
Silver (thousand ounces)
Copper (tonnes)
Total
Year ended 31 December 2023
Volume
shipped
(unaudited)
Volume
payable
(unaudited)
Average price
($ per oz/t
payable)
(unaudited)
1,438
17,461
3,037
1,400
16,595
2,693
1,886
21.9
8,168
Year ended 31 December 2022
Volume
shipped
(unaudited)
Volume
payable
(unaudited)
Average price
($ per oz/t
payable)
(unaudited)
1,408
18,973
3,810
1,376
18,542
3,399
1,738
20.7
7,650
$m
2,640
363
22
3,025
$m
2,392
383
26
2,801
Included in revenues for the year ended 31 December 2023 are those arisen from the sales to the Group’s largest customers, whose
contribution to the Group’s revenue presented 10% or more of the total revenue. In 2023 revenues from such customers amounted to
$547 million, $357 million and $292 million (2022: $754 million, $446 million, $452 million and $233).
Geographical analysis of revenue by destination is presented below:
Sales within the Russian Federation
Sales to Asia
Sales to Kazakhstan
Sales to Europe
Total
Presented below is an analysis per revenue streams as described in Note 2 Significant accounting policies:
Bullions
Concentrate
Doré
Ore
Total
Year ended
31 December
2023
$m
31 December
2022
$m
1,251
969
805
–
3,025
296
1,284
1,205
16
2,801
Year ended
31 December
2023
$m
31 December
2022
$m
1,582
865
547
31
3,025
1,104
915
754
28
2,801
Total
2,801
1,355
1,690
(272)
(65)
1
1
288
311
(10)
(13)
141
142
1
(2)
–
1,017
282
(1)
(1)
65
825
13
(1)
2
(167)
(32)
(2)
(20)
(119)
8
(332)
44
(288)
705
352
–
3,392
14
133
13
4,609
883
49
Net debt
(174)
(2,209)
(2,383)
(277)
(2,116)
(2,393)
144
145
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
7. Cost of sales
11. General, administrative and selling expenses
Cash operating costs
On-mine costs (Note 8)
Smelting costs (Note 9)
Purchase of metal inventories from third parties
Mining tax
Total cash operating costs
Depreciation and depletion of operating assets (Note 10)
Rehabilitation expenses (Note 24)
Total costs of production
Increase in metal inventories
(Reversal)/write-down of inventories to net realisable value (Note 21)
Idle capacities and abnormal production costs
Total
8. On-mine costs
Services
Labour
Consumables and spare parts
Other expenses
Total (Note 7)
9. Smelting costs
Consumables and spare parts
Services
Labour
Other expenses
Total (Note 7)
10. Depletion and depreciation of operating assets
On-mine
Smelting
Total in cost of production (Note 7)
Less: absorbed into metal inventories
Depreciation included in cost of sales
Year ended
31 December
2023
$m
31 December
2022
$m
632
532
127
163
1,454
280
–
1,734
(276)
(6)
7
741
567
69
136
1,513
324
(1)
1,836
(216)
64
6
1,459
1,690
Year ended
31 December
2023
$m
31 December
2022
$m
283
153
190
6
632
363
175
196
7
741
Year ended
31 December
2023
$m
31 December
2022
$m
216
207
104
5
532
242
213
110
2
567
Year ended
31 December
2023
$m
31 December
2022
$m
182
98
280
(26)
254
228
96
324
(52)
272
Depreciation of operating assets excludes depreciation relating to non-operating assets (included in general, administrative and selling
expenses) and depreciation related to assets employed in development projects where the charge is capitalised.
Labour
Share-based compensation
Depreciation
Services
Other
Total
12. Other operating expenses, net
Exploration expenses
Social payments
Bad debt allowance
Expenses related to the investment in Special Economic Zone
Taxes, other than income tax
Change in estimate of environmental obligations
Other expenses
Total
Year ended
31 December
2023
$m
31 December
2022
$m
215
11
7
19
22
274
243
13
10
15
30
311
Year ended
31 December
2023
$m
31 December
2022
$m
35
34
19
15
14
(7)
7
62
44
(1)
14
17
(2)
8
117
142
For the operations held in the Special Economic Zone of the Russian Far East, Omolon Gold Mining Company LLC and Magadan Silver
JSC are entitled to the decreased statutory income tax rate of 17%, as well as decreased mining tax rate (paying 60% of standard mining
tax rates). In return for obtaining this tax relief the members of the regional free Economic Zone are obliged to invest 50% of their tax
savings each year in the Special Economic Zone Development Programme, amounting to $15 million in 2023 (2022: $14 million).
Operating cash flows spent on exploration activities amounted to $34 million (2022: $61 million).
13. Employee costs
Wages and salaries
Social security costs
Share-based compensation
Total employee costs
Reconcilation:
Less: employee costs capitalised
Less: employee costs absorbed into unsold metal inventory balances
Employee costs included in costs of sales
Year ended
31 December
2023
$m
31 December
2022
$m
428
105
11
544
(45)
(33)
466
500
115
13
628
(64)
(24)
540
The weighted average number of employees during the year ended 31 December 2023 was 14,564 (year ended 31 December 2022: 14,455).
Compensation of key management personnel is disclosed within Note 30.
146
147
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
14. Auditor’s remuneration
Audit of financial statement(s)
Audit related assurance services (half-year financial statements review)
Other non-assurance (non-audit but related) services
Total
15. Finance expenses
Interest expense on borrowings
Unwinding of discount on contingent consideration liability (Note 31)
Unwinding of discount on environmental obligations (Note 24)
Unwinding of discount on lease liabilities (Note 19, 31)
Total
Year ended
31 December 2023
31 December 2022
AO BST
$m
MacIntyre
Hudson Ltd
$m
0.77
0.27
0.01
1.05
0.79
0.35
–
1.14
AO BST
$m
0.74
0.44
0.01
1.19
Year ended
31 December
2023
$m
31 December
2022
$m
141
7
7
7
162
94
10
8
7
119
During the year ended 31 December 2023 interest expense on borrowings excluded borrowing costs capitalised in the cost of qualifying
assets of $49 million (2022: $35 million). These amounts were calculated based on the Group’s general borrowing pool and by applying
an effective interest rate of 5.57% (2022: 4.53%) to weighted average balance of expenditure associated with qualifying assets.
16. Income tax
Income tax expense for the years ended 31 December 2023 and 2022 recognised in the consolidated income statement was as follows:
Current income taxes
Deferred income taxes
Total
Year ended
31 December
2023
$m
31 December
2022
$m
(235)
(80)
(315)
(164)
208
44
A reconciliation between the reported amounts of income tax expense attributable to income before income tax is as follows:
Profit before income tax
Theoretical income tax (expense)/benefit at the tax rate of 20%
Effect of Special Economic Zone and Regional Investment project decreased tax rates
Tax effect of withholding tax on intercompany dividends
Non taxable net foreign exchange gains
Disposal of subsidiary
Effect of different tax rates of subsidiaries operating in other jurisdictions and windfall tax
Change in unrecognised deferred taxes
Non-deductible interest expense
Other non-taxable income and non-deductible expenses, net
Adjustments in respect of prior periods
Total income tax expense
Year ended
31 December
2023
$m
31 December
2022
$m
843
(169)
16
(161)
37
11
(7)
(9)
(17)
(14)
(2)
(315)
(332)
66
(19)
15
25
–
9
(14)
(6)
(27)
(5)
44
The actual tax expense differs from the amount which would have been determined by applying the statutory rate of 20% for the Russian
Federation and Kazakhstan to profit before income tax as a result of the application of relevant jurisdictional tax regulations, which disallow
certain deductions which are included in the determination of accounting profit.
The Group has a number of tax concessions, therefore the tax rate varies for each separate entity from 0% to 20%.
Tax exposures related to the income tax
In 2023 and 2022 no individual material exposures were identified as probable and therefore provided for. Management has identified a
total exposure in respect of contingent liabilities (covering taxes and related interest and penalties) of approximately $38 million being
uncertain tax positions (31 December 2022: $122 million) which relate to income tax. This is connected largely to the more assertive
position of the Russian tax authorities in their interpretation of tax legislation in several recent court cases for other taxpayers. Fiscal
periods remain open to review by the tax authorities in respect of taxes for the three and five calendar years preceding the year of tax
review for Russia and Kazakhstan respectively. In case of Regional Investment Project in Russian Federation fiscal period remains open
to review for five years as well. While the Group believes it has provided adequately for all tax liabilities based on its understanding of the
tax legislation, the above facts may create additional financial risks for the Group.
Management does not anticipate a significant risk of material changes in estimates in these matters in the next financial year.
Deferred taxation
Deferred taxation is attributable to the temporary differences that exist between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for tax purposes.
The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the reporting
period.
Mineral
rights
$m
Exploration
in progress
$m
Borrowings
and other
liabilities
$m
Environmental
obligation
$m
Tax losses
$m
Undistributed
earnings
$m
Other
$m
At 1 January 2022
Charge to income statement
Exchange differences
At 31 December 2022
Charge to income statement
Disposal of subsidiaries
Exchange differences
At 31 December 2023
(184)
88
(22)
(118)
(4)
12
15
(95)
(66)
12
(9)
(63)
(17)
10
15
(55)
18
(23)
2
(3)
92
(1)
(23)
66
11
1
–
12
2
–
(2)
12
100
86
3
189
(39)
(2)
(28)
119
(22)
22
–
–
(151)
–
(1)
(152)
4
22
(8)
18
37
(5)
(5)
45
Total
$m
(139)
208
(34)
35
(80)
14
(29)
(60)
Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following analysis shows
deferred tax balances presented for financial reporting purposes:
Deferred tax liabilities
Deferred tax assets
Total
Year ended
31 December
2023
$m
31 December
2022
$m
(252)
192
(60)
(107)
142
35
The Group believes that recoverability of the recognised deferred tax asset (DTA) of $119 million at 31 December 2023
(2022: $189 million), which is related to the tax losses carried forward, is more likely than not based upon expectations of future taxable
income in the Russian Federation. It was concluded that there is sufficient evidence to overcome the recent history of losses based on
forecasts of sufficient taxable income in the carry-forward period.
In accordance with Russian Federation tax law regarding loss carryforwards, they are limited to 50% of taxable profit in tax years through
to 2026. Starting from 2027 the limitation will expire and it will be possible to fully utilise loss carryforwards against the corporate tax base
in a given year. Losses incurred from 2007 can be carried forward for an indefinite period until fully utilised.
The Group’s estimate of future taxable income is based on established proven and probable reserves which can be economically
developed. The related detailed mine plans and forecasts provide sufficient supporting evidence that the Group will generate taxable
earnings to be able to fully realise its net DTA even under various stressed scenarios. The amount of the DTA considered realisable, however,
could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced due to delays in
production start dates, decreases in ore reserve estimates, increases in environmental obligations, or reductions in precious metal prices.
No deferred tax asset has been recognised in respect of $31 million (2022: $95 million) of losses as it is not considered probable that
there will be future taxable profits against which these losses can be utilised.
In 2023 the Group paid withholding income tax of $10 million (2022: $7 million) related to intercompany dividends, which were remitted
during the year. As of 31 December 2023 the Group recognised deferred tax liability of $152 million (31 December 2022: nil) in respect of
the undistributed retained earnings of certain of the Group subsidiaries, which are expected to be remitted from these subsidiaries in a
foreseeable future (judged to be one year). No deferred tax liabilities for taxes that would be payable on the unremitted earnings of the
Group subsidiaries is recognised where the Group determines that the undistributed profit of its subsidiaries will not be distributed in a
foreseeable future (judged to be one year). The temporary differences associated with investments in subsidiaries, for which deferred tax
liabilities have not been recognised, amounted to $2.3 billion (2022: $4.1 billion).
148
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
17. Impairment of non-current assets
During year ended 31 December 2023 due to the updated operational plans and further advancement of the Veduga project (Amikan
GRK LLC), the Group carried out an impairment review of the property, plant and equipment, related to this CGU. As a result of this
review an impairment loss of $68 million previously recognised for Veduga CGU was fully reversed.
An impairment charge of $165 million in respect to Amursk POX is mainly attributable to the classification of Amursk POX as a separate
CGU due to changes in the mode of assets utilisation (Note 3). Additionally, as a result of review of recoverability of exploration and
evaluation assets, the Group recognised an impairment loss of $29 million.
Total net impairment loss of $126 million recognised comprised the following:
Property, plant and equipment
Exploration assets
Development assets
Mining assets
Capital construction in-progress
Total
Amikan
$m
Amursk POX
$m
Viksha
$m
Bolshevik
$m
2
8
48
10
68
–
–
(29)
(136)
(165)
(13)
–
–
–
(13)
(16)
–
–
–
(16)
Total
$m
(27)
8
19
(126)
(126)
Amikan, Amursk POX and Viksha related to Russia reporting segment, Bolshevik was included in Kazakhstan reporting segment (Note 5).
The recoverable amount of the relevant cash-generating units is determined based on a value in use calculation. The impairment testing
procedure, related assumptions and sensitivities are described in detail in Notes 2 and 3.
18. Property, plant and equipment
Cost
Balance at 1 January 2022
Additions
Transfers
Change in environmental obligations (Note 24)
Acquisitions
Eliminated on disposal of subsidiaries
Disposals and write-offs including fully
depleted mines
Translation to presentation currency
Balance at 31 December 2022
Additions
Transfers
Change in environmental obligations (Note 24)
Acquisitions (Note 4)
Eliminated on disposal of subsidiaries (Note 4)
Disposals and write-offs including fully
depleted mines
Translation to presentation currency
Balance at 31 December 2023
Development
assets
$m
Exploration
assets
$m
Mining assets
$m
Non-mining
assets
$m
Capital
construction
in-progress
$m
384
65
(13)
–
29
–
–
35
500
47
(282)
–
–
(18)
–
(82)
165
74
19
–
–
1
(8)
–
(1)
85
26
(18)
–
52
(4)
(16)
(14)
111
3,343
255
245
12
–
(10)
(152)
50
3,743
255
491
7
–
(113)
(55)
(603)
3,725
74
11
2
–
–
–
–
6
93
7
2
–
–
(2)
(3)
(23)
74
783
533
(234)
8
19
–
(1)
39
1,147
421
(193)
(1)
–
(36)
(17)
(263)
1,058
Total
$m
4,658
883
–
20
49
(18)
(153)
129
5,568
756
–
6
52
(173)
(91)
(985)
5,133
18. Property, plant and equipment continued
Development
assets
$m
Exploration
assets
$m
Mining assets
$m
Non-mining
assets
$m
Capital
construction
in-progress
$m
Accumulated depreciation, amortisation
Balance at 1 January 2022
Charge for the year
Eliminated on disposal of subsidiaries (Note 4)
Impairment recognised during the year (Note 17)
Disposals and write-offs including fully
depleted mines
Translation to presentation currency
Balance at 31 December 2022
Charge for the year
Transfers
Eliminated on disposal of subsidiaries (Note 4)
Reversal of Impairment/(Impairment) recognised
during the year, net (Note 17)
Disposals and write-offs including fully
depleted mines
Translation to presentation currency
Balance at 31 December 2023
Net book value
31 December 2022
31 December 2023
–
–
–
(334)
–
82
(252)
–
202
–
8
–
35
(7)
248
158
–
–
–
(2)
–
–
(2)
–
–
–
(27)
16
2
(11)
83
100
(1,304)
(345)
10
(418)
148
75
(1,834)
(297)
(214)
10
19
52
334
(1,930)
1,909
1,795
(40)
(9)
–
(4)
–
–
(53)
(7)
–
1
–
2
13
(44)
40
30
Total
$m
(1,344)
(354)
10
(801)
148
165
(2,176)
(304)
–
11
(126)
70
390
–
–
–
(43)
–
8
(35)
–
12
–
(126)
–
6
(143)
(2,135)
1,112
915
3,392
2,998
Mining, exploration and development assets at 31 December 2023 included mineral rights with a net book value of $621 million
(31 December 2022: $713 million) and capitalised stripping costs with a net book value of $262 million (31 December 2022: $277 million).
Mineral rights of the Group comprise assets acquired upon acquisition of subsidiaries.
Disposed and written off assets included fully depreciated items of $21 million (year ended 31 December 2022: $153 million and
$121 million, respectively).
No property, plant and equipment was pledged as collateral at 31 December 2023 and 2022.
19. Leases
Movements of the right-of-use assets for the year ended 31 December 2023 are as follow:
Right-of-use assets
At 1 January
Additions and modifications
Depreciation charge for the period
Disposals
Accumulated depreciation of assets disposed
Translation to presentation currency
At 31 December
Year ended
31 December
2023
$m
31 December
2022
$m
131
(14)
(8)
(10)
4
(27)
76
33
122
(8)
(1)
1
(16)
131
Lease modification related to the updated lease contract of the overhead power line, supplying electricity to the Nezhda production site,
which commenced in July 2022. The corresponding decrease was recognised in right-of-use assets.
Movements of the lease liabilities for the year ended 31 December 2023 are detailed in Note 31. Maturity analysis of lease liabilities is
presented in Note 28. The Group’s lease commitments related to the variable lease payments are disclosed in Note 26.
The Group excluded the following lease agreements from the right-of-use assets and lease liabilities and recognises the lease payments
associated with those leases as expenses on a straight-line basis over the lease term:
• Lease agreements with variable payments;
• Lease agreements of land plots to explore for or use minerals and similar non-generative resources;
• Short-term lease agreements that expire within 12 months from the date of initial application;
• Lease agreements of low value assets (of $5,000 or less).
150
151
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
19. Leases continued
Amounts recognised in profit and loss were as follows:
Expenses related to lease exemptions
Unwinding of discount on lease liabilities
Depreciation of right-of-use assets
Total lease expenses
20. Investments in associates and joint ventures
Interests in associates and joint ventures
GRK Amikan LLC (Veduga) (Note 4)
Individually immaterial investments
Total
Loans forming part of net investment in joint ventures
Individually immaterial investments
Total
Total investments in associates and joint ventures
Movement during the reporting periods was as follows:
At 1 January
Impairment recognised
Fair value of interest in joint venture retained (Note 4)
Consolidated as subsidiaries (Note 4)
Loans advanced forming part of net investment
Share of loss in joint ventures
Currency translation adjustment
Total at 31 December
Summarised financial position of the investments
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Year ended
31 December
2023
$m
31 December
2022
$m
10
7
8
25
5
7
8
20
31 December 2023
31 December 2022
Voting
power
%
49.9
Carrying
Value
$m
121
6
127
2
2
129
Voting
power
%
n/a
Carrying
Value
$m
–
6
6
7
7
13
Year ended
31 December
2023
$m
31 December
2022
$m
13
–
110
(11)
11
(2)
8
129
28
(24)
3
–
4
–
2
13
31 December 2023
31 December 2022
Amikan
$m
Non-significant
investments
$m
Non-significant
investments
$m
364
12
(40)
(94)
242
4
1
(2)
–
3
13
5
(5)
(1)
12
Reconciliation of Amikan net assets to the investment recognised in the Group balance sheet
Group interest
Net assets
Group's ownership interest
Carrying value of the investment
152
49,9%
242
121
121
21. Inventories
Inventories expected to be recovered after twelve months
Ore stock piles
Work in-process
Сopper, gold and silver concentrate
Consumables and spare parts
Total non-current inventories
Inventories expected to be recovered in the next twelve months
Сopper, gold and silver concentrate
Ore stock piles
Work in-process
Doré
Metal for refining
Refined metals
Total current metal inventories
Consumables and spare parts
Total current inventories
Year ended
31 December
2023
$m
31 December
2022
$m
51
13
8
43
115
324
208
146
70
25
45
818
360
89
–
10
34
133
277
229
121
55
20
3
705
352
1,178
1,057
Write-downs of metal inventories to net realisable value
The Group recognised the following write-downs and reversals to net realisable value of its metal inventories:
Ore stock piles
Ore in heap leach piles
Сopper, gold and silver concentrate
Total
Year ended
31 December
2023
$m
31 December
2022
$m
(6)
15
(1)
8
(28)
(31)
(6)
(65)
The key assumptions used as of 31 December 2023 in determining net realisable value of inventories (including the commodity price
assumptions for long-term stockpiles) are described in Note 3 “Use of estimates” section. For short-term metal inventories, applicable
quoted forward prices as of 31 December 2023 were used: gold and silver prices of $2,128 per ounce (2022: $1,874) and $24.8 per ounce
(2022: $24.6), respectively.
During the year ended 31 December 2023 the Group recognised a write-down of consumables and spare parts of $2 million (year ended
31 December 2022: reversal of $1 million).
The amount of inventories held at net realisable value at 31 December 2023 amounted to $81 million (31 December 2022: $95 million).
153
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
22. Accounts receivable and other financial assets
Non-current accounts receivable
Loans provided to related parties (Note 30)
Loans provided to third parties
Other long-term assets
Total
Other non-current financial assets
Interest rate swaps (Note 27)
Contingent consideration receivable
Total
Trade and other receivables
Receivables from provisional copper, gold and silver concentrate sales
Other receivables
Short-term loans provided
Less: Impairment allowance for doubtful debts
Total
Other financial assets at FVTPL
Short-term contingent consideration receivable
Shares held at FVTPL
Total
Year ended
31 December
2023
$m
31 December
2022
$m
64
23
20
107
8
1
9
135
121
13
(8)
261
3
2
5
–
15
16
31
16
8
24
54
46
8
(5)
103
9
1
10
The average credit period on sales of copper, gold and silver concentrate and dore at 31 December 2023 was 24 days (2022: 20 days on
sales of copper, gold and silver concentrate, as dore receivables were insignificant). No interest is charged on trade receivables. The
Group’s doubtful debt relates to its non-trade receivables, which are fully impaired.
Contingent consideration receivable are classified as Group’s Level 3 financial assets as detailed in Note 27.
23. Borrowings
Secured loans from third parties
US Dollar denominated
Total secured loans from third
parties
Unsecured loans from third parties
US Dollar denominated
US Dollar denominated
Euro denominated
RUB denominated
RUB denominated
CNY denominated
CNY denominated
Total unsecured loans from third
parties
Total loans from third parties
Actual interest rate at
31 December 2023
31 December 2022
Type of
rate
31 Dec
2023
31 Dec
2022
Current
$m
Non-
current
$m
Total
$m
Current
$m
Non-
current
$m
fixed
4.32%
2.68%
floating
fixed
floating
floating
fixed
floating
fixed
6.74%
3.50%
4.32%
17.95%
13.17%
4.95%
5.54%
5.69%
3.75%
0.98%
9.35%
8.03%
3.50%
5.99%
27
27
240
432
2
20
19
-
265
114
114
100
274
18
694
142
70
808
978
1,005
2,106
2,220
141
141
340
706
20
714
161
70
1,073
3,084
3,225
33
33
149
43
2
132
3
69
83
481
514
158
158
339
1,206
19
518
202
70
–
2,354
2,512
Total
$m
191
191
488
1,249
21
650
205
139
83
2,835
3,026
Bank loans
The Group has a number of borrowing arrangements with various lenders. These borrowings consist of unsecured and secured loans
and credit facilities as detailed above.
Movements in borrowings are presented in Note 31. The Group complied with its debt covenants throughout 2023 and 2022.
The table below summarises maturities of borrowings:
Less than 1 year
1-5 years
More than 5 years
Total
24. Environmental obligations
Opening balance
Change in estimate of environmental obligations (Note 12)
Decommissioning liabilities recognised as increase in property plant and equipment (Note 18)
Rehabilitation expenses (Note 7)
Effect of unwinding of discount (Note 15)
Translation to presentation currency
Closing balance
Year ended
31 December
2023
$m
31 December
2022
$m
1,005
2,208
12
3,225
514
2,332
180
3,026
Year ended
31 December
2023
$m
31 December
2022
$m
76
(7)
6
–
7
(13)
69
54
(2)
20
(1)
8
(3)
76
The principal assumptions are related to Russian Rouble and Kazakh Tenge projected cash flows. The assumptions used for the
estimation of environmental obligations were as follows:
Discount rates
Inflation rates
Expected mine closure dates
2023
2022
10.66%-14.01%
4%-8.5%
1-27 years
7.25%-13.61%
4%-14%
1-30 years
The discount rates applied are based on the applicable government bond rates in Russia and Kazakhstan. The expected mine closure
dates are consistent with life of mine models and applicable mining licence requirements.
25. Payables and accrued liabilities
Non-current liabilities
Long-term royalties payable (Note 31)
Other non-current liabilities
Total non-current liabilities
Current liabilities
Trade payables
Accrued liabilities
Payables related to investment in Special Economic Zone (Note 12)
Labour liabilities
Advances received
Short-term royalties payable (Note 31)
Other payables
Total current liabilities
Year ended
31 December
2023
$m
31 December
2022
$m
19
7
26
121
59
15
17
11
5
12
240
19
9
28
150
69
13
19
6
5
8
270
In 2023 the average credit period for payables to suppliers of goods and services was 37 days (2022: 34 days). There was no interest
charged on the outstanding trade and other payables balance during the credit period. The Group has financial risk management policies
in place, which include budgeting and analysis of cash flows and payment schedules to ensure that all amounts payable are settled within
the credit period.
154
155
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
26. Commitments and contingencies
Commitments
Capital commitments
The Group’s contractual capital expenditure commitments as of 31 December 2023 amounted to $171 million (2022: $279 million).
Nezhda power line
The Group’s lease commitments, representing variable lease payments related to the Nezhda grid power line and substation, were
estimated at $24 million (undiscounted), which will be expensed as incurred (2022: $36 million).
Contingent liabilities
Taxation
Russian and Kazakhstan tax, currency and customs legislation is subject to varying interpretations, and changes, which can occur
frequently. Management’s interpretation of such legislation as applied to the transaction and activity of the companies of the Group may
be challenged by the relevant regional and federal authorities and as a result, significant additional taxes, penalties and interest may be
assessed. Fiscal periods remain open to review by the tax authorities in respect of taxes for three and five calendar years preceding the
year of review for Russia and Kazakhstan respectively. Under certain circumstances reviews may cover longer periods.
Management has identified a total exposure (covering taxes and related interest and penalties) of $41 million in respect of contingent
liabilities (2022: $125 million), mainly related to income tax as described in Note 16.
27. Financial instruments
Major categories of financial instruments
Financial assets
Derivatives designated in hedge relationships
Interest rate swaps
Financial assets at FVTPL
Receivables from provisional copper, gold and silver concentrate sales (Note 22)
Contingent consideration receivable (Note 22)
Shares held at FVTPL (Note 22)
Financial assets at amortised cost, including cash and cash equivalents
Cash and cash equivalents (Note 31)
Other receivables (Note 22)
Non-current loans and receivables (Note 22)
Total financial assets
Financial liabilities
Financial liabilities at FVTPL
Contingent consideration liability (Note 31)
Royalty payable (Note 31)
Financial liabilities at amortised cost
Borrowings (Note 23)
Deferred consideration (Note 31)
Trade and other payables (Note 25)
Total financial liabilities
Year ended
31 December
2023
$m
31 December
2022
$m
8
135
4
2
842
126
87
1,204
44
24
3,225
–
148
3,441
16
54
17
1
633
49
15
785
36
24
3,026
85
171
3,342
The Group’s principal financial liabilities comprise borrowings, derivatives, trade and other payables. The Group has various financial
assets such as accounts receivable, loans advanced and cash and cash equivalents.
Trade and other payables exclude employee benefits and social security.
Interest expense, calculated using effective interest method, arising on financial liabilities at amortised costs is disclosed in Note 31.
The main risks arising from the Group’s financial instruments are foreign currency and commodity price risk, interest rate, credit and
liquidity risks.
At the end of the reporting period, there were no significant concentrations of credit risk for receivables at FVTPL. The carrying amount
reflected above represents the Group's maximum exposure to credit risk for such receivables.
Presented below is a summary of the Group’s accounts receivable with embedded derivative recorded on the consolidated balance
sheet at fair value.
As of 31 December 2023, accounts receivable with embedded derivatives recognised at fair value amounted to $135 million
(31 December 2022: $54 million) and represented receivables from provisional metal concentrate sales. In 2023 gains recognised on
revaluation of these instruments amounted to $4 million (2022: $17 million) and was recorded within revenue.
Fair value of financial instruments
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped
into Levels 1 to 3 based on the degree to which the fair value is observable as follows:
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly or indirectly; and
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
At 31 December 2023 and 31 December 2022, the Group held the following financial instruments:
Receivables from provisional copper, gold and silver concentrate sales
Interest rate swaps
Contingent consideration receivable
Shares held at FVTPL
Royalty liabilities payable
Contingent consideration liability (Note 31)
Total
Receivables from provisional copper, gold and silver concentrate sales
Interest rate swaps
Contingent consideration receivable
Shares held at FVTPL
Royalty liabilities payable
Contingent consideration liability (Note 31)
Total
31 December 2023
Level 1
$m
Level 2
$m
Level 3
$m
–
–
–
2
–
–
2
135
8
–
–
–
–
143
–
–
4
–
(24)
(44)
(64)
31 December 2022
Level 1
$m
Level 2
$m
Level 3
$m
–
–
–
1
–
–
1
54
16
–
–
–
–
70
–
–
17
–
(24)
(36)
(43)
Total
$m
135
8
4
2
(24)
(44)
81
Total
$m
54
16
17
1
(24)
(36)
28
During the reporting year, there were no transfers between Level 1 and Level 2.
The Group recognised the following gains and loss from revaluation of its Level 3 financial instruments:
Loss on contingent consideration receivable revaluation
(Loss)/gain on contingent consideration payable revaluation
Change in fair value of shares held at FVTPL
Loss on royalty payable revaluation
Total change in fair value of financial instruments
Year ended
31 December
2023
$m
31 December
2022
$m
(4)
(4)
–
–
(8)
(17)
3
(4)
(2)
(20)
The carrying values of cash and cash equivalents, trade and other receivables, trade and other payables and short-term debt recorded at
amortised cost approximate to their fair values because of the short maturities of these instruments. Long-term loans to related parties
(Note 30) are discounted at rates obtained from active capital markets. The estimated fair value of the Group’s debt, calculated using the
market interest rate available to the Group as of 31 December 2023, was $2,699 million (2022: $2,615 million), and the carrying value as of
31 December 2023 was $3,225 million (2022: $3,026 million) (see Note 23).
As of 31 December 2023 the Group held several interest rate swap contracts, recognised within non-current accounts receivables and
other financial instruments in the amount of $8 million (31 December 2022: $16 million). All interest rate swap contracts to pay fixed and
receive floating interest payments are designated as cash flow hedges to reduce the Group’s cash flow exposure resulting from variable
interest rates on borrowings. As the critical terms of the interest rate swap contracts and their corresponding hedged items are the same,
the Group performs a qualitative assessment of effectiveness and it is expected that the value of the interest rate swap contracts and the
value of the corresponding hedged items will systematically change in opposite direction in response to movements in the underlying
interest rates. As of 31 December 2023 and 31 December 2022 it was determined that there is no hedge ineffectiveness identified and
therefore change of fair value was recognised within other comprehensive income.
156
157
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
27. Financial instruments continued
Receivables from provisional copper, gold and silver concentrate sales
The fair value of receivables arising from copper, gold and silver concentrate sales contracts that contain provisional pricing mechanisms
is determined using the appropriate quoted forward price from the exchange that is the principal active market for the particular metal. As
such, these receivables are classified within Level 2 of the fair value hierarchy.
Valuation methodologies used in the measurement of fair value for Level 3 financial assets
and financial liabilities
The main level 3 inputs used by the Group in measuring the fair value of contingent consideration assets and liabilities, represented by
various royalties and net smelter returns (NSR), are derived and evaluated as follows:
• The relevant valuation model simulates expected production of metals at respective mines and are based on life of mine models
prepared using applicable ore reserves and mineral resource estimations;
• Commodity prices - Commodity prices are based on latest internal forecasts, benchmarked against external sources of information.
The prices applied are consistent with those described in Note 3.
• Discount rates – The Group used a post-tax real discount rate of 12.5% (2022: 14.1%) as described in Note 3. For the Monte-Carlo
modelling, where inflation is incorporated into volatility estimation, a nominal discount rate of 15.1% (2022: 16%) is applied.
• Where the percentage of net smelter return (NSR) or royalty receivable or payable depends on commodity prices or foreign exchange
rates reaching certain levels, the Group applies the Monte-Carlo modelling to incorporate the volatility measure into the valuation,
which is applied to the prevailing market prices/rates as of the valuation date. The Monte-Carlo modelling is applied to Prognoz (NSR)
contingent considerations payable and all contingent considerations receivable.
The key assumptions used in the Monte-Carlo calculations are set out below:
The carrying amounts of monetary assets and liabilities denominated in foreign currencies other than functional currencies of the
individual Group entities at 31 December 2023 and 2022 were as follows:
Dollar
CNY
Euro
Total
Assets
Liabilities
31 December 2023
$m
31 December 2022
$m
31 December 2023
$m
31 December 2022
$m
298
471
–
769
272
–
–
272
1,063
1,147
5
2,215
1,417
224
10
1,651
US Dollar denominated assets and liabilities disclosed above exclude balances outstanding held in Polymetal International plc and its
intermediate holding companies.
Currency risk is monitored on a monthly basis by performing a sensitivity analysis of foreign currency positions in order to verify that
potential losses are at an acceptable level.
The table below details the Group’s sensitivity to changes in exchange rates by 10% which is the sensitivity rate used by the Group for
internal analysis. The analysis includes external loans as well as loans to foreign operations within the Group where the denomination of
the loans is in a currency other than of the lender or the borrower.
Year ended
31 December
2023
$m
31 December
2022
$m
36
(55)
(71)
–
–
(31)
(84)
(22)
35
(35)
Gold
Silver
Copper
Zinc
RUB rate
Price as of valuation date per
ounce/tonne, $
2,062
23.79
8,476
2,641
89.6883
Volatility, %
12.15%-15.18%
26.93%
16.34%
24.89%
21.51%
Constant correlation to gold,
%
n/a
65.88%
(37.98)%
29.53%
43.13%
Profit or loss
RUB to US Dollar
KZT to US Dollar
RUB to CNY
Other comprehensive income or loss
RUB to US Dollar
KZT to US Dollar
Management consider that a reasonably possible change in a valuation assumption would not have a material impact on the consolidated
financial statements for contingent considerations receivables and payable.
28. Risk management activities
Capital management
The Group manages its capital to ensure that it continues as a going concern while maximising the return to stakeholders through the
optimisation of the debt and equity balance. The Group's overall strategy is to provide value to stakeholders by maintaining an optimal
short-term and long-term capital structure, reducing cost of capital, and to safeguard the ability to support the operating requirements on
an ongoing basis, continuing the exploration and development activities.
The capital structure of the Group consists of net debt (borrowings as detailed in Note 23 offset by cash and cash equivalents and bank
balances as detailed in Note 31) and equity of the Group comprising the Stated Capital account, reserves and retained earnings.
The Group’s committed borrowings are subject to certain financial covenants. Compliance with covenants is reviewed on a semi-annual
basis by management.
The Group's Board reviews the capital structure of the Group on a semi-annual basis. As part of this review, the Board considers the cost
of capital and the risks associated with each class of capital.
Foreign currency and commodity price risk
In the normal course of business, the Group enters into transactions for the sale of its commodities, denominated in US Dollars. In
addition, the Group has assets and liabilities in a number of different currencies (primarily Russian Rouble and Chinese Yuan). As a result,
the Group is subject to transaction and translation exposure from fluctuations in foreign currency exchange rates.
The Group does not currently use derivative instruments to hedge its exposure to foreign currency risk.
Provisionally priced sales
Under a long-established practice prevalent in the industry, copper, gold and silver concentrate sales are provisionally priced at the time
of shipment. The provisional prices are finalised in a contractually specified future period (generally one to three months) primarily based
on quoted LBMA or LME prices. Sales subject to final pricing are have quotation periods from 1 to 4 months.
Interest rate risk
The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. The risk is
managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate
swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite; ensuring the most
cost-effective hedging strategies are applied.
The Group's exposure to interest rates on financial assets and financial liabilities are detailed in the liquidity risk section of this note.
For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was
outstanding for the whole period. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key
management personnel and represents management's assessment of the reasonably possible change in interest rates.
If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Group's profit for the year ended
31 December 2023 would have decreased/increased by $9 million (2022: $7 million). This is mainly attributable to the Group's exposure
to interest rates on its variable rate borrowings.
Credit risk
Credit risk is the risk that a customer may default or not meet its obligations to the Group on a timely basis, leading to financial losses to
the Group. The Group’s financial instruments that are potentially exposed to concentration of credit risk consist primarily of cash and
cash equivalents and loans and receivables.
Trade accounts receivable at 31 December 2023 and 2022 are represented by provisional copper, gold and silver concentrate sales
transactions. A significant portion of the Group’s trade accounts receivable is due from reputable export trading companies. With regard
to other loans and receivables, the procedures of accepting a new customer include checks by a security department and responsible
on-site management for business reputation, licences and certification, creditworthiness and liquidity. Generally, the Group does not
require any collateral to be pledged in connection with its investments in the above financial instruments. Credit limits for the Group as a
whole are not set up.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international and local
credit-rating agencies. The major financial assets at the balance sheet date other than trade accounts receivable presented in Note 31 are
cash and cash equivalents at 31 December 2023 of $842 million (2022: $633 million).
158
159
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
28. Risk management activities continued
Liquidity risk
Liquidity risk is the risk that the Group will not be able to settle its liabilities as they fall due.
The Group’s liquidity position is carefully monitored and managed. The Group manages liquidity risk by maintaining detailed budgeting,
cash forecasting processes and matching the maturity profiles of financial assets and liabilities to help ensure that it has adequate cash
available to meet its payment obligations.
The following table details the Group's remaining contractual maturity for its financial liabilities with agreed repayment periods. The table
has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be
required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the
undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the
earliest date on which the Group may be required to pay.
Presented below is the maturity profile of the Group’s financial liabilities as of 31 December 2023 and 2022:
Borrowings (Note 23)
Accounts payable and accrued expenses (Note 25)
Contingent consideration liabilities (Note 27, 31)
Royalty payable (Note 31)
Lease liabilities (Note 19)
Total
Borrowings (Note 23)
Accounts payable and accrued expenses (Note 25)
Contingent consideration liabilities (Note 27, 31)
Royalty payable (Note 31)
Lease liabilities (Note 19)
Total
31 December 2023
Less than
3 months
$m
3–12 months
$m
1–5 years
$m
More than
5 years
$m
536
140
10
–
5
691
573
8
4
5
16
606
2,234
–
24
16
52
2,326
595
–
17
–
9
621
31 December 2022
Less than
3 months
$m
3–12 months
$m
1–5 years
$m
More than
5 years
$m
14
149
6
–
8
177
664
22
4
5
23
718
2,487
–
124
16
87
2,714
366
–
15
–
43
424
Total
$m
3,938
148
55
21
82
4,244
Total
$m
3,531
171
149
21
161
4,033
29. Stated capital account
The movements in the Stated capital account in the year were as follows:
Balance at 31 December 2021
Own shares exchanged during the year
Own shares issued in exchange
Balance at 31 December 2022
Redomiciation to AIFC
Own shares exchanged during the year
Own shares issued in exchange
Deferred shares issued
Balance at 31 December 2023
Stated capital
account
no. of shares
Stated capital
account
$m
Share capital
$m
Share
premium
$m
Treasury
shares
no. of shares
473,626,239
2,450
(39,070,838)
39,070,838
473,626,239
–
(2,543,840)
2,543,840
18,902
473,645,141
–
–
2,450
(2,450)
–
–
–
–
–
–
–
–
14
–
–
–
14
–
–
–
–
–
39,070,838
–
39,070,838
2,436
–
–
–
–
2,543,840
–
–
2,436
41,614,678
As a part of the re-domiciliation described in Note 1, in order to comply with the AIFC companies rules, the Company's shares were
converted from 512,697,077 ordinary shares of no par value to 512,697,077 ordinary shares of $0.03 each in the share capital of the
Company. As result the Company recognised Share capital of $14 million and Share premium of $2,436 million, calculated as difference
between Share capital and Stated capital account, previously recorded.
On 22 September 2022, the Board announced its intention to conduct an exchange offer. The exchange offer invited shareholders whose
rights have been affected by the sanctions imposed on NSD, subject to fulfilling eligibility criteria, to tender such shares for exchange in
consideration for the issuance of a certificated share, on a one-for-one basis.
The first exchange offer which was completed on 11 October 2023. 2,543,840 shares were repurchased during year ended 31 December
2023 (31 December 2022: 39,070,838 shares). The exchange of shares did not give rise to any cash settlement and hence does not give
rise to any financial liability. The shares were exchanged at par, on a one-for-one basis and does not affect the Company’s net asset and
resources position or capital structure.
As of 31 December 2023 total number of voting rights in the Company amounted to 473,645,141 ordinary shares of nominal value $0.03
each (31 December 2022: 473,626,239 ordinary shares with no par value), each carrying one vote, and additionally the Company held
41,514,678 shares in treasury and such shares did not enjoy any voting or economic rights (31 December 2022: 39,070,838 shares).
Weighted average number of shares: Diluted earnings per share
Both basic and diluted earnings per share were calculated by dividing profit for the year attributable to equity holders of the parent by the
weighted average number of outstanding common shares before/after dilution respectively. The calculation of the weighted average
number of outstanding common shares after dilution is as follows:
Weighted average number of outstanding common shares
Weighted average number of outstanding common shares after dilution
Year ended
31 December
2023
31 December
2022
473,645,141
473,626,239
473,645,141
473,626,239
There were no adjustments required to earnings for the purposes of calculating the diluted earnings per share during the year ended
31 December 2023 (year ended 31 December 2022: nil). There are no dilutive potential ordinary shares with respect to earnings per share
from continuing operations as these are out of money as of the reporting date (2022: no dilutive potential ordinary shares).
30. Related parties
Related parties are considered to include shareholders, affiliates, associates, joint ventures and entities under common ownership and
control with the Group and members of key management personnel.
During the period ended 31 December 2023 transactions with the related parties, represented by equity method investments, comprise
included miscellaneous purchases of $4 million (year ended 31 December 2022: $0.7 million) and various sales of $0.5 million (year
ended 31 December 2022: $0.5 million).
Outstanding balances as of 31 December 2023 were represented by accounts receivable of $1.2 million (31 December 2022: $1.2 million)
from equity method investments and long-term loans advanced to the joint venture amounting to $64 million (Note 20). The loans bear
contractual 0% interest date up to the start of production with maturity of 5 years.
Loans provided to equity method investments, classified as loans forming part of net investment in joint ventures, are presented in
Note 20.
The remuneration of directors and other members of key management personnel during the periods was as follows:
Share-based payments
Short-term benefits of board members
Short-term employee benefits
Total
Year ended
31 December
2023
$m
31 December
2022
$m
–
3
1
4
1
3
6
10
160
161
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
31. Supplementary cash flow information
Year ended
31 December
2023
$m
Year ended
31 December
2022
$m
Note
Changes in liabilities arising from financing activities
The table below details changes in the Group's liabilities arising from financing activities, including both cash and non-cash changes.
Liabilities from financing activities are those for which cash flow were, or future cash flows will be, classified in the Group's consolidated
cash flow statements as cash flows from financing activities.
Profit before tax
Adjustments for:
Depreciation and depletion recognised in the statement of comprehensive income
Impairment of non-current assets, net
(Gain)/loss on disposal of subsidiaries
(Reversal)/write-down of inventories to net realisable value
Share-based compensation
Finance expenses
Finance income
Change in fair value of financial instruments
Foreign exchange loss
Other non-cash items
5
17
4
7
11
15
27
Movements in working capital
Change in inventories
Change in VAT and other taxes
Change in trade and other receivables
Change in prepayments to suppliers
Change in trade and other payables
Change in prepayments received
Cash generated from operations
Interest paid
Interest received
Income tax paid
Net cash generated by operating activities
843
261
126
(113)
(6)
11
162
(27)
8
174
21
(332)
282
825
2
64
13
119
(8)
20
32
12
1,460
1,029
(328)
18
(159)
(25)
(4)
–
962
(190)
19
(216)
575
(269)
8
(18)
(31)
(29)
(134)
556
(123)
7
(234)
206
There were no significant non-cash transactions during the years ended 31 December 2023 and 31 December 2022, other than in
respect of exchange of the ordinary shares (Note 29).
Cash outflows related to capitalised exploration amounted to $11 million for the year ended 31 December 2023 (2022: $15 million). During
the year ended 31 December 2023, the capital expenditure related to the new projects, which increase the Group’s operating capacity
amounts to $237 million (2022: $208 million).
Cash and cash equivalents
Bank deposits
Current bank accounts
Total
– USD
– CNY
– KZT
– other currencies
– USD
– CNY
– other currencies
31 December
2023
$m
31 December
2022
$m
17
364
104
39
159
107
52
842
468
-
15
75
68
-
7
633
At 31 December 2023 cash balances included $513 million of cash and cash equivalents (31 December 2022: $118 million) held in Russia,
that are subject to certain legal and sanctions restrictions and are therefore not available for general use of the Company (but fully
available for use by Russian subsidiaries). The Group determined that these restrictions would not have any material effect on the Group’s
liquidity position and its ability to finance its obligations.
Bank deposits as of 31 December 2023 were mainly presented by the US Dollar and CNY deposits, bearing an average interest rate of
2.98% and 4.04% per annum, respectively (2022: US Dollar deposits, bearing an average interest rate of 3.9% per annum).
162
Year ended 31 December 2023
Contingent
consideration
payable at fair
value
$m
Deferred
consideration
payable at
amortised
cost
$m
Borrowings
$m
Royalty
payable
$m
Lease
liabilities
$m
1 January
Cash inflow
Cash outlow
Changes from financing cash flows
Disposal of subsidiary
Change in fair value, included in profit or loss
Unwind of discount
New leases and modifications
Lease termination
Net foreign exchange losses
Exchange differences on translating foreign operations
Other changes
31 December
Less current portion
Total non-current liabilities at 31 December
1 January
Cash inflow
Cash outlow
Changes from financing cash flows
Additions as a result of acquisitions
Change in fair value, included in profit or loss
Unwind of discount
Arrangement fee amortisation
New leases
Lease termination
Net foreign exchange losses
Exchange differences on translating foreign operations
Other changes
31 December
Less current portion
Total non-current liabilities
3,026
1,324
(944)
380
–
–
1
–
–
371
(553)
(181)
3,225
(1,005)
2,220
Borrowings
$m
2,064
3,885
(3,029)
856
161
–
–
1
–
–
(19)
(37)
106
3,026
(33)
2,993
36
–
–
–
–
4
4
–
–
6
(6)
8
44
(15)
29
85
–
–
–
(88)
–
3
–
–
4
(4)
(85)
–
–
–
24
–
–
–
–
–
–
–
–
6
(6)
–
24
(5)
19
131
–
(21)
(21)
–
–
7
(14)
(7)
–
(26)
(40)
70
(18)
52
31 December 2022
Contingent
consideration
payable at fair
value
$m
63
–
(27)
(27)
–
(3)
3
–
–
–
–
–
–
36
(9)
27
Deferred
consideration
payable at
amortised
cost
$m
79
–
–
–
–
–
6
–
–
–
–
–
6
85
–
85
Royalty
payable
$m
Lease
liabilities
$m
21
–
–
–
–
3
–
–
–
–
(2)
2
3
24
(5)
19
36
–
(18)
(18)
–
–
7
–
123
(1)
–
(16)
113
131
(25)
106
163
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
32. Subsequent events
Оn 18 February 2024 the Group entered into contracts for the divestment of its Russian business through a sale of 100% JSC Polymetal’s
shares to a third party, JSC Mangazeya Plus (the Purchaser). On 7 March 2024, following receipt of required regulatory approvals and
shareholder approvals, the transaction was completed.
The transaction entailed $50 million cash consideration which was paid to the Company at completion.
Prior to completion, an aggregate dividend of $1,429 million (before tax) was paid by JSC Polymetal to the Company, of which
$278 million will be retained by the Company for its general corporate purposes and $1,151 million were used to repay, and fully
discharge, the intra-group debt and related interest owed to JSC Polymetal. Combined net cash proceeds from the Purchaser and
through dividends retained by the Company, after tax of $28 million, amounted to $300 million.
Major classes of assets and liabilities of JSC Polymetal Group, net of dividends payable and intercompany loans receivable, that were
settled in March 2024 before the actual disposal date and which will not be part of assets and liabilities of the divested subsidiaries, are
presented below. Cash and cash equivalents balance as of 31 December 2023 was adjusted for the net outflow accordingly, including
dividends tax effect.
33. SUPPLEMENTARY FINANCIAL INFORMATION ON DIVESTMENT
(UNAUDITED)
The financial information below is to illustrate the financial effect of the divestment, so each caption of the consolidated statement of
financial position and consolidated income statement was adjusted to exclude the amounts of JSC Polymetal Group. In contrast with the
statement of financial position presented on the face of these consolidated financial statements intra-group balances with JSC Polymetal
Group are not eliminated, instead they are treated as balances with a related party. Unrealised profits or losses are excluded from the
inventory balances and accumulated profits of Polymetal International plc.
Additionally, the table below presents post-disposal Polymetal International plc pro forma financial information, which illustrates the
impact of the sale transaction on the net assets of the Polymetal International plc as of 31 December 2023 as if it had taken place at that
date and the results of operations of the Polymetal International plc as it the transaction had taken place at 1 January 2023.
Year ended
31 December 2022
$m
31 December 2023
$m
Post-disposal pro forma
based on year ended
31 December 2023
$m
Assets
Property, plant and equipment
Investments in associates and joint ventures
Non-current accounts receivable
Deferred tax asset
Non-current inventories
Other non-current assets
Total non-current assets
Current inventories
Prepayments to suppliers
Income tax prepaid
VAT receivable
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Accounts payable and accrued liabilities
Current borrowings
Income tax payable
Other taxes payable
Other current liabilities
Total current liabilities
Non-current borrowings
Deferred tax liability
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
31 December
2023
$m
2,189
123
80
186
74
87
2,739
904
156
9
73
310
121
1,573
4,312
(189)
(860)
(20)
(57)
(30)
(1,156)
(1,863)
(44)
(138)
(2,045)
(3,201)
1,111
The rationale for the transaction is associated with the significant political and financial risks that the pre-divestment structure poses to
the Group, as well as the difficulty and related uncertainty of executing any alternative transaction. Therefore management believes that
the transaction terms do not represent an indicator of further impairment of any CGU within the JSC Polymetal Group. The impairment
review conducted as 31 December 2023 is described in Notes 2 and 3.
164
Assets
Property, plant and equipment
Investments in associates and joint ventures
Non-current accounts receivable
Other non-current financial assets
Non-current inventories
Total non-current assets
Current inventories
Prepayments to suppliers
Income tax prepaid
VAT receivable
Trade and other receivables
Receivables from related parties
Dividends receivable from JSC Polymetal
Other financial assets at FVTPL
Cash and cash equivalents
Total current assets
Total assets
Accounts payable and accrued liabilities
Current borrowings
Intercompany balances
Income tax payable
Other taxes payable
Current portion of contingent consideration liability
Total current liabilities
Non-current borrowings
Non-current borrowings to related parties
Contingent and deferred consideration liabilities
Deferred tax liability
Environmental obligations
Non-current lease liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
717
10
13
–
24
764
146
36
21
25
17
100
–
10
515
870
1,634
(43)
(75)
(1,097)
–
(19)
–
(1,234)
(716)
(32)
(98)
(57)
(8)
(1)
(5)
(917)
(2,151)
(517)
809
6
27
9
41
892
274
24
37
58
24
–
1,429
5
328
2,179
3,071
(126)
(145)
(270)
–
(24)
(3)
(568)
(357)
(766)
(14)
(208)
(17)
(1)
(6)
(1,369)
(1,937)
1,134
809
6
27
9
41
892
274
24
37
58
74
–
–
5
628
1,050
1,942
(131)
(145)
–
(6)
(24)
(3)
(309)
(357)
–
(14)
(65)
(17)
(1)
(6)
(460)
(769)
1,173
165
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Notes to the consolidated financial statements continued
Appendices
33. SUPPLEMENTARY FINANCIAL INFORMATION ON DIVESTMENT
(UNAUDITED) continued
Year ended
31 December 2022
$m
31 December 2023
$m
Post-disposal pro forma
based on
31 December 2023
$m
Revenue
Cost of sales
Gross profit
General, administrative and selling expenses
Other operating expenses, net¹
Impairment of non-current assets
Operating profit
Foreign exchange gain, net
Loss on disposal of subsidiaries
Change in fair value of financial instruments
Finance expenses
Finance income
Profit before income tax
Income tax
Profit from continuing operations
Loss from discontinued operations²
Translation differences recycling on disposal of foreign operation³
Total from continuing and discontinued operations
913
(407)
506
(48)
(30)
–
428
214
(2)
(1)
(55)
5
589
(51)
538
–
–
538
826
(420)
406
(59)
(16)
(16)
315
171
–
(2)
(90)
6
400
(218)
182
–
–
182
826
(420)
406
(59)
(21)
(16)
310
171
–
(2)
(90)
6
395
(75)
320
(1,210)
(979)
(1,869)
168 Alternative performance measures
170 Reserves and Resources
173 Group production statistics
173 Financial highlights
174 Non-financial information statement
175
Independent practitioner’s assurance
report
GRI content index
190 Tailings Storage Facilities Disclosure
191 GRI and SASB content indices
191
198
201 Glossary
204 Share information
205 Contacts
SASB content index
Water management
Waste management
People
Air quality
Consumables
Health and safety
178 Sustainability data
178
178
181
182
183
183
184
185
186
187
187
188
189
189
Value distribution
GHG emissions
Human rights
Energy
Lands and biodiversity
Environmental expenditure
Communities investment and engagement
Compliance and business ethics
1 Adjustment of $5 million in post-disposal proforma represents the estimated costs of the disposal.
2 Loss from discontinued operation was calculated as cash consideration receivable of $50 million less the carrying amount of the net assets of the Polymetal Russia
Group as of 31 December 2023 net of dividends payable (including applicable taxation) and intercompany loans receivable (Note 32).
3 The functional currency of the Polymetal Russia Group is the Russian rouble, which is different from the Polymetal International plc functional currency (US dollar to
1 January 2015 and Kazakh tenge from 1 August 2023). The exchange differences arising on translation of the assets, liabilities and income statements of the
Polymetal Russia Group were recorded in other comprehensive income and accumulated in the separate component of equity. On disposal of the Polymetal Russia
Group the cumulative amount of the exchange differences relating to Polymetal Russia operations is to be recycled to the Polymetal International plc’s income
statement.
166
167
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Alternative performance measures
Introduction
The financial performance reported by the Group contains certain Alternative Performance Measures (APMs), disclosed
to complement measures that are defined or specified under International Financial Reporting Standards (IFRS). APMs
should be considered in addition to, and not as a substitute for, measures of financial performance, financial position or
cash flows reported in accordance with IFRS.
The Company believes that these measures, together with measures determined in accordance with IFRS, provide the
readers with valuable information and an improved understanding of the underlying performance of the business.
APMs are not uniformly defined by all companies, including those within the Group’s industry. Therefore, the APMs used
by the Group may not be comparable to similar measures and disclosures made by other companies.
Purpose
APMs used by the Group represent financial KPIs for clarifying the financial performance of the Company and measuring
it against strategic objectives, given the following background:
• Widely used by the investor and analyst community in the mining sector and, together with IFRS measures, provide a
holistic view of the Company
• Applied by investors to assess earnings quality, facilitate period-to-period trend analysis and forecasting of future
earnings, and understand performance through eyes of management
• Highlight key value drivers within the business that may not be obvious in the financial statements
• Ensure comparability of information between reporting periods and operating segments by adjusting for uncontrollable
or one-off factors which impact upon IFRS measures
• Used internally by management to assess the financial performance of the Group and its operating segments
• Used in the Group’s Dividend Policy
• Certain APMs are used in setting management’s remuneration.
APMs and justification for their use
Group APM
Underlying
net earnings
Underlying
earnings per
share
Underlying
return on
equity
Underlying
return on
assets
Adjusted
EBITDA
Net debt
Net debt/
Adjusted
EBITDA ratio
Free cash
flow
Free cash
flow post
M&A
Closest equivalent
IFRS measure
• Profit/(loss)
for the financial
period
attributable
to equity
shareholders of
the Company
Adjustments made to IFRS measure
Rationale for adjustments
• Write-down of metal inventory to net realisable value (post-tax)
• Write-down of development and exploration assets (post-tax)
• Foreign exchange (gain)/loss (post-tax)
• Change in fair value of contingent consideration liability (post-tax)
• Gains/losses on acquisition, revaluation and disposals of
interests in subsidiaries, associates and joint ventures (post-tax)
• Excludes the impact of key significant
one-off non-recurring items and significant
non-cash items (other than depreciation)
that can mask underlying changes in core
performance
• Earnings per
share
• Underlying net earnings (as defined above)
• Weighted average number of outstanding common shares
• Excludes the impact of key significant one-off
non-recurring items and significant non-cash
items (other than depreciation) that can mask
underlying changes in core performance
• No equivalent
• Underlying net earnings (as defined above)
• Average equity at the beginning and the end of reporting year,
• The most important metric for evaluating
a Group profitability
adjusted for translation reserve
• Measures the efficiency with which a
company generates income using the funds
that shareholders have invested
• No equivalent
• Underlying net earnings (as defined above) before interest and
• A financial ratio that shows the percentage
tax
• Average total assets at the beginning and the end of reporting
year
of profit a company earns in relation to its
overall resources
• Profit/(loss)
before income
tax
• Finance cost (net)
• Depreciation and depletion
• Write-down of metal and non-metal inventory to net
realisable value
• Write-down of development and exploration assets
•
Impairment/reversal of previously recognised impairment of
operating assets
• Share-based compensation
• Bad debt allowance
• Net foreign exchange gain/losses
• Change in fair value of contingent consideration liability
• Rehabilitation costs
• Additional mining taxes, VAT, penalties and accrued interest
• Gains/losses on acquisition, revaluation and disposals of
interests in subsidiaries, associates and joint ventures
• Not applicable
• Net total of
current and
non-current
borrowings1
• Cash and cash
equivalents
• No equivalent
• Not applicable
• Excludes the impact of certain non-cash
elements, either recurring or non-recurring,
that can mask underlying changes in core
operating performance, to be a proxy for
operating cash flow generation
• Measures the Group’s net indebtedness
that provides an indicator of the overall
balance sheet strength
• Used by creditors in bank covenants
• Used by creditors, credit rating agencies
and other stakeholders
• Cash flows from
operating activity
less cash flow
from investing
activities
• Excluding acquisition costs in business combinations and
investments in associates and joint ventures
• Excluding loans forming part of net investment in joint ventures
• Excluding proceeds from disposal of subsidiaries
• Reflects cash generating from operations
after meeting existing capital expenditure
commitments
• Measures the success of the Group in
• Cash flows from
• Not applicable
operating
activity less
cash flow from
investing
activities
Total cash
costs (TCC)
• Total cash
operating costs
• General,
administrative &
selling expenses
• Depreciation expense
• Rehabilitation expenses
• Write-down of inventory to net realisable value
Intersegment unrealised profit elimination
•
•
Idle capacities and abnormal production costs
• Exclude corporate costs and costs related to development
assets
• Reclassification of treatment charges deductions to cost of sales
turning profit into cash through the strong
management of working capital and capital
expenditure
• Free cash flow including cash used in/
received from acquisition/disposal of assets
and joint ventures
• Reflects cash generation to finance returns
to shareholders after meeting existing
capital expenditure commitments and
financing growth opportunities
• Calculated according to common mining
industry practice using the provisions of Gold
Institute Production Cost Standard
• Gives a picture of the Group current ability to
extract its resources at a reasonable cost and
generate earnings and cash flows for use in
investing and other activities
168
169
All-in
sustaining
cash costs
(AISC)
• Total cash
operating costs
• General,
administrative &
selling expenses
• AISC is based on total cash costs, and adds items relevant to
sustaining production such as other operating expenses,
corporate level SG&A, and capital expenditure and exploration
at existing operations (excluding growth capital) After tax, all-in
cash costs include additional adjustments for net finance cost,
capitalised interest and income tax paid. All-in costs include
additional adjustments on that for development capital
•
Includes the components identified in World
Gold Council’s Guidance Note on Non-GAAP
Metrics – All-In Sustaining Costs and All-In
Costs (June 2013), which is a non-IFRS
financial measure
• Provides investors with better visibility into the
true cost of production
1 Excluding lease liabilities and royalty payments.
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Reserves and Resources
Ore Reserves as at 1 January 20241
Mineral Resources as at 1 January 20245
Tonnage
Grade
Content
Kt Au g/t Ag g/t
Cu % Zn % Pb % GE g/t Au Koz Ag Koz
Cu Kt
Zn Kt
Pb Kt GE Koz
Tonnage
Grade
Content
Kt Au g/t
Ag g/t Cu % Zn % Pb % GE g/t Au Koz
Ag Koz Cu Kt Zn Kt Pb Kt GE Koz
Proved
Standalone mines
Kyzyl
Varvara hub
Varvara²
High–grade ore
Low–grade ore
Komar
Elevator³
Total Proved
(Kazakhstan)
Total Proved (Russia)
Total Proved
Probable
Standalone mines
Kyzyl
Varvara hub
Varvara²
High–grade ore
Low–grade ore
Komar
Elevator³
Total Probable
(Kazakhstan)
Total Probable (Russia)
Total Probable
Proved+Probable
Standalone mines
Kyzyl
Varvara hub
Varvara²
High–grade ore
Low–grade ore
Komar
Elevator³
Total Proved+Probable
(Kazakhstan)
Total Proved+Probable
(Russia)⁴
Total Proved+Probable
4,900
4,900
24,020
17,780
7,260
10,520
2,690
3,550
28,920
45,460
74,380
52,470
52,470
29,900
3,640
1,370
2,270
18,940
7,320
82,370
95,420
177,790
57,370
57,370
53,920
21,420
8,630
12,790
21,630
10,870
111,290
140,880
252,170
6.1
0.7
0.8
0.7
1.2
1.1
5.1
1.2
1.1
1.3
1.6
1.3
5.2
0.8
0.8
0.8
1.5
1.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.44
0.44
–
–
–
–
0.63
0.63
–
–
–
–
0.47
0.47
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6.1
6.1
0.8
0.7
0.8
0.7
1.2
1.1
1.7
3.2
2.7
5.1
5.1
1.5
1.2
1.1
1.3
1.6
1.3
3.8
3.8
3.8
5.2
5.2
1.2
0.8
0.8
0.8
1.5
1.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
967
967
644
420
178
242
100
124
1,612
–
–
–
–
–
–
–
–
–
4,202
45,271
5,813
45,271
8,610
8,610
1,405
142
49
93
966
297
10,015
–
–
–
–
–
–
–
–
–
9,587 164,741
19,602 164,741
9,578
9,578
2,049
562
227
335
1,066
421
–
–
–
–
–
–
–
–
–
3.2
11,627
3.6
3.5
13,789 210,011
25,415 210,011
–
–
32
32
32
–
–
–
32
5
37
–
–
9
9
9
–
–
–
9
25
34
–
–
41
41
41
–
–
–
41
30
71
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
25
25
13
13
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
78
78
121
121
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
967
967
644
420
178
242
100
124
1,612
4,733
6,344
8,610
8,610
1,405
142
49
93
966
297
10,015
11,616
21,631
9,578
9,578
2,049
562
227
335
1,066
421
11,627
103
103
134
134
16,348
27,975
1 Ore Reserves are reported in accordance with the JORC Code (2012). Gold equivalent (GE) is calculated based on gold and silver only. Discrepancies in
calculations are due to rounding.
2 Copper grade is indicated only for high-grade copper ore. Low-grade ore is low-grade copper ore.
3 Estimate was performed by Polymetal as at 1 January 2022. Revised estimate was not performed due to lack of material changes.
4 Ore Reserves for the Russian assets are presented only for information.
5 Mineral Resources are reported in accordance with the JORC Code (2012). Gold equivalent (GE) is calculated based on gold and silver only. Mineral Resources are
additional to Ore Reserves. Discrepancies in calculations are due to rounding.
6 Mineral Resources estimate for Bolshevik was prepared by Polymetal as at 1 January 2019. Price: Au = $1,200/oz. Revised estimate was not performed due to lack
of material changes.
Initial estimate was prepared by Polymetal as at 1 January 2024.
7
170
Measured
Standalone mines
Kyzyl6
Varvara hub
Varvara²
High-grade ore
Low-grade ore
Komar
Elevator³
Total Measured (Kazakhstan)
Total Measured (Russia)
Total Measured
Indicated
Standalone mines
Kyzyl6
Varvara hub
Varvara²
High-grade ore
Low-grade ore
Komar
Elevator³
Baksy⁷
Total Indicated (Kazakhstan)
Total Indicated (Russia)
Total Indicated
Measured+Indicated
Standalone mines
Kyzyl6
Varvara hub
Varvara²
High-grade ore
Low-grade ore
Komar
Elevator³
Baksy⁷
Total Measured+Indicated
(Kazakhstan)
Total Measured+Indicated
(Russia)
Total Measured+Indicated
Inferred
Standalone mines
Kyzyl6
Varvara hub
Varvara²
High-grade ore
Low-grade ore
Komar
Elevator³
Baksy⁷
Total Inferred (Kazakhstan)
Total Inferred (Russia)
Total Inferred
2.8
0.8
1.3
0.7
1.3
1.2
100
100
6,440
5,270
590
4,680
1,090
80
6,540
22,650
29,190
8,450
8,450
3.7
1.4
1.3
1.4
1.4
1.4
2.9
9,370
2,190
640
1,550
5,530
1,230
420
17,820
41,880
59,700
8,550
8,550
3.7
1.0
1.3
0.9
1.4
1.4
2.9
15,810
7,460
1,230
6,230
6,620
1,310
420
24,360
64,530
88,890
11,570
11,570
5.3
1.8
2.2
1.6
1.8
1.7
1.1
7,730
1,220
380
840
3,080
3,400
30
19,300
89,900
109,200
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.48
0.48
–
–
–
–
0.58
0.58
–
–
–
2.14
–
0.53
0.53
–
–
–
2.14
–
0.68
0.68
–
–
–
1.06
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.9
2.8
0.9
0.8
1.3
0.7
1.3
1.2
0.9
4.0
3.3
3.7
3.7
1.4
1.4
1.3
1.4
1.4
1.4
2.9
2.5
4.0
3.6
3.7
3.7
1.2
1.0
1.3
0.9
1.4
1.4
2.9
9
9
185
135
24
111
46
3
194
–
–
–
–
–
–
–
–
–
2,557
30,071
2,751
30,071
1,000
1,000
434
96
26
70
245
55
39
1,434
–
–
–
–
–
–
–
–
–
–
4,616
66,415
6,049
66,415
1,009
1,009
619
231
50
181
291
58
39
–
–
–
–
–
–
–
–
–
–
2.1
1,628
4.0
3.5
5.3
5.3
1.7
1.8
2.2
1.6
1.8
1.7
1.1
3.9
7,173
96,486
8,800
96,486
1,981
1,981
430
70
27
43
176
182
1
2,411
–
–
–
–
–
–
–
–
–
–
5.0 12,929
112,536
4.8 15,340
112,536
–
–
3
3
3
–
–
–
3
1
3
–
–
13
4
4
–
–
–
9
13
146
158
–
–
15
6
6
–
–
–
9
15
146
161
–
–
3
3
3
–
–
–
0.4
3
15
18
–
–
–
–
–
–
–
–
–
6
6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4
4
–
–
–
–
–
–
–
–
–
–
308
308
23
23
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
314
314
27
27
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
31
31
23
23
9
9
185
135
24
111
46
3
194
2,912
3,106
1,000
1,000
434
96
26
70
245
55
39
1,434
5,406
6,839
1,009
1,009
619
231
50
181
291
58
39
1,628
8,318
9,945
1,981
1,981
430
70
27
43
176
182
1
2,411
14,328
16,740
171
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Reserves and Resources continued
Group production statistics
Mineral Resources as at 1 January 20241 (continued)
Tonnage
Grade
Content
Kt Au g/t
Ag g/t Cu % Zn % Pb % GE g/t Au Koz
Ag Koz Cu Kt Zn Kt Pb Kt GE Koz
Measured+Indicated +Inferred
Standalone mines
20,120
Kyzyl2
Varvara hub
Varvara³
High-grade ore
Low-grade ore
Komar
Elevator⁴
Baksy⁵
Total Measured+Indicated
+Inferred (Kazakhstan)
Total Measured+Indicated
+Inferred (Russia)6
Total Measured+Indicated
+Inferred
20,120
4.6
1.1
1.5
1.0
1.5
1.6
2.8
23,540
8,680
1,610
7,070
9,700
4,710
450
43,660
154,430
198,090
–
–
–
–
–
–
–
–
0.56
0.56
–
–
–
2.05
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4.6
4.6
1.4
1.1
1.5
1.0
1.5
1.6
2.8
2,990
2,990
1,049
301
77
225
468
240
40
2.9
4,039
–
–
–
–
–
–
–
–
–
–
–
–
18
9
9
–
–
–
9
18
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,990
2,990
1,049
301
77
225
468
240
40
4,039
4.6 20,101
209,022
161
345
50
22,646
4.2 24,140
209,022
179
345
50
26,685
This estimate was prepared by employees of Polymetal Eurasia LLC, Bakyrchik Mining Venture LLC and JSC Polymetal
Engineering, led by Mr Valery Egorov, who assumes overall responsibility for the Mineral Resources and Ore Reserves
Report.
Mr Egorov is employed full-time as the Technical Director of Bakyrchik Mining Venture LLC and has more than 17 years’
experience in gold, silver and polymetallic mining. He is a Member of the Institute of Materials, Minerals & Mining (MIMMM),
London, and a Competent Person under the JORC Code. Valery Egorov owns shares in the Company granted under the
long-term incentive plan for the key employees.
Listed below is other Competent Person employed by the Company who is responsible for the relevant research on which
the Mineral Resources and Ore Reserves estimate is based:
Geology and Mineral Resources – Victor Pchelka, an advisor of the Deputy Director for Mineral Resources, Polymetal
Eurasia LLC, MIMMM, PONEN, with 37 years’ relevant experience.
All the above mentioned Competent Persons have sufficient experience that is relevant to the style of mineralisation and
types of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in
the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’
(JORC Code).
All Competent Persons have given their consent to the inclusion in the report of the matters based on their information in
the form and context in which it appears.
Metals prices used in estimating Mineral Resources and Ore Reserves are listed below (unless otherwise indicated in the
footnotes of the above tables):
Au = $1,800/oz;
Cu = $8,000/t.
All metals presented in the tables of Mineral Resources and Ore Reserves were used in the Mineral Resources and Ore
Reserves estimates. The gold equivalent includes only gold and silver.
Consolidated highlights
Waste mined, Kt
Underground development, m
Ore mined, Kt
Open-pit
Underground
Ore processed, Kt
Gold grade processed, g/t
Silver grade processed, g/t
GE grade processed, g/t
Total Production
Gold, Koz
Silver, Moz
Copper, t
Gold equivalent, Koz based on 80:1 Ag/Au ratio, excluding base metals
Gold equivalent production by mine, GE Koz
Kazakhstan
Kyzyl
Varvara
Russia
Total
Financial highlights
Revenue, $m
Adjusted EBITDA, $m2
Adjusted EBITDA margin, %
Average realised gold price, $/oz3
Average LBMA closing gold price, $/oz
Average realised silver price, $/oz3
Average LBMA closing silver price, $/oz
Total cash costs, $/GE oz2
All-in sustaining costs, $/GE oz2
Net earnings/(loss), $m
Underlying net earnings, $m2
Underlying EPS, $/share2
Dividends declared during the period, $/share4
Dividend proposed for the period, $/share5
Operating cash flow, $m
Capital expenditure, $m
Free cash flow (pre M&A), $m2
Free cash flow (post M&A), $m2
FY 2019
FY 2020
FY 2021
FY 2022
FY 2023
158,560
105,819
17,224
13,022
4,202
15,024
3.4
52
3.8
1,316
21.6
2,452
1,586
481
343
137
1,108
1,585
166,805
90,011
15,386
11,221
4,166
15,447
3.5
44
4.1
1,402
18.8
1,544
1,637
541
382
159
1,097
1,637
205,888
95,549
15,647
11,686
3,962
15,799
3.2
45
3.8
1,422
20.4
1,901
1,677
558
360
198
1,120
1,677
211,127
97,997
19,456
15,388
4,068
18,289
3.1
39
3.6
1,450
21.0
1,664
1,720¹
541
330
211
1,178
1,720¹
184,713
93,265
16,615
12,184
4,431
19,306
2.9
33
3.3
1,492
17.7
2,163
1,714
486
316
169
1,228
1714
FY 2019
FY 2020
FY 2021
FY 2022
FY 2023
2,241
1,075
48%
1,411
1,393
16.5
16.2
655
866
483
586
1.25
0.51
0.82
696
436
256
299
2,865
1,661
58%
1,797
1,771
20.9
20.5
638
874
1,066
1,052
2.23
1.02
1.29
1,166
558
610
603
2,890
1,464
51%
1,792
1,799
24.8
25.0
730
1,030
904
913
1.93
1.34
0.97
1,195
759
418
407
2,801
1,017
36%
1,764
1,802
21.9
21.8
942
1,344
(288)
440
0.93
–
–
206
794
(445)
(473)
3,025
1,458
48%
1,929
1,943
22.8
23.4
861
1,276
528
615
1.3
–
–
575
679
(128)
(131)
1 Mineral Resources are reported in accordance with the JORC Code (2012). Gold equivalent (GE) is calculated based on gold and silver only. Mineral Resources are
additional to Ore Reserves. Discrepancies in calculations are due to rounding.
2 Mineral Resources estimate for Bolshevik was prepared by Polymetal as at 1 January 2019. Price: Au = $1,200/oz. Revised estimate was not performed due to lack
of material changes.
3 Copper grade is indicated only for high-grade copper ore. Low-grade ore is low-grade copper ore.
4 Estimate was performed by Polymetal as at 1 January 2022. Revised estimate was not performed due to lack of material changes.
5
6 Mineral Resources for the Russian assets are presented only for information.
Initial estimate was prepared by Polymetal as at 1 January 2024.
1 Mayskoye production reporting approach was amended to record production as soon as the ownership title for gold is transferred to a buyer at the mine site’s
concentrate storage facility. Previous periods were restated accordingly.
2 Refer to “Alternative Performance Measures” section for definition and details.
3
In accordance with IFRS, revenue is presented net of treatment charges which are subtracted in calculating the amount to be invoiced. Average realised prices are
calculated as revenue divided by gold and silver volumes sold, excluding effect of treatment charges deductions from revenue.
4 Based on declaration date.
5 Dividend proposed for the FY include interim, final and special dividend paid for the financial year.
Source: Consolidated audited IFRS financial statements for the years ended 31 December 2023, 2022, 2021, 2020, 2019.
172
173
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Non-financial information statement
Independent practitioner’s assurance report
The following information is provided in compliance with the Non-Financial Reporting
Directive requirements. The table below sets out where relevant information can be found
in this Integrated Annual Report. More detailed information is available on the Company’s
website: www.polymetalinternational.com.
To the Shareholders and Management
of Polymetal International plc.
Reporting requirement
Policy and standards
Business model
The International Integrated Reporting Framework
Universal matters
Environmental matters
Employees
Human rights
Social matters
Anti-corruption and
anti-bribery
UN Global Compact
EBRD Environmental and Social Policy
Responsible Gold Mining
Principles
Code of Conduct
Environmental Policy
Code of Conduct
Climate Change Policy
Tailings and Water Storage Facilities Management Policy
Energy Policy
Mine Closure Policy
ISO 14001
ISO 15001
ILO conventions, national labour codes
Code of Conduct
ISO 45001
Employment and Labour Standard
Health and Safety Policy
Diversity and Inclusion Policy
Collective agreements
Universal Declaration on Human Rights
The UN Guiding Principles on Business and Human Rights
Human Rights Policy
Modern Slavery Act Statement
Code of Conduct
Supplier Code of Conduct
Community Engagement Policy
Political and Charitable Donations Policy
Procurement Policy
Code of Conduct
Anti-Bribery and Corruption Policy
Supplier Code of Conduct
Gifts and Entertainment Policy
Policy on Use of Agents, Representatives, Intermediaries
and Contractors’ Due Diligence
Whistleblowing Policy
Policy on Disciplinary Action for Violation of Anti-Bribery
and Corruption Procedures
Relevant information
Business model, pages 12-13;
Strategy, pages 14-15.
Our contribution to the UN SDGs, page 39;
Our material issues, pages 40-41.
Environment, pages 50-55;
Climate and Energy, pages 56-61;
Environmental risk, page 76;
Disclosure on Tailings Storage Facilities
2023, page 196.
Employees, pages 46-49;
Health and safety, pages 42-45;
Human capital risk, page 77;
Health and safety risk, page 75.
Human rights, page 66;
Modern Slavery Act Transparency
Statement 2023, available on the website;
Supply chain stewardship, pages 65-66.
Communities, pages 62-63.
Anti-bribery and corruption, page 65.
Principal risks and impact
from business activity
Risk Management Policy
Non-financial key
performance indicators
GRI
SASB
Risk management, pages 68-84.
Key performance indicators, page 17;
Sustainability, pages 38-67;
Sustainability data, pages 178-189.
Scope
We have been engaged by Polymetal International plc (hereinafter “the Company”) to perform a ‘limited assurance
engagement,’ as defined by International Standards on Assurance Engagements, here after referred to as the
engagement, to report on the Company’s information in the field of sustainability for subsidiaries in Kazakhstan
(hereinafter “Sustainability Information for Kazakhstan” or the “Subject Matter”) contained in the Company’s
Integrated Annual Report (hereinafter “the Report”) for the period from January 1 to December 31, 2023
(hereinafter “the Reporting Period”).
The Subject Matter is disclosed in the following sections of the Report:
• Sustainability section of the Report, pages 39-67,
• Sustainability highlights on “At a glance” spread of the Report, page 4,
• Sustainability-related figures in all spreads of the Integrated Annual Report, including Key Performance
Indicators related to sustainability, page 17,
• Green highlights in Operating review, pages 24-25,
• Safety & Sustainability Committee report, pages 98-99,
• Sustainability data section in appendix, pages 178-190,
• GRI content index and relevant sections of the Report which the GRI Index refers to, pages 191-197,
• SASB content index and relevant sections of the Report which the SASB Index refers to, pages 198-200.
Other than as described in the preceding paragraph, which sets out the scope of our engagement, we did not
perform assurance procedures on the remaining information included in the Report, and accordingly, we do not
express a conclusion on this information.
Criteria applied by the Company
In preparing the Sustainability Information for Kazakhstan the Company applied the
• Global Reporting Initiative Sustainability Reporting Standards (hereinafter “the GRI Standards”),
• Metals & Mining Sustainability Accounting Standard published by the Sustainability Accounting Standards
Board (hereinafter “the SASB Standards”), as set forth in section “About this Report” on the page 2 of the
Report (hereinafter “the Criteria”).
The Company’s responsibilities
The Company’s management is responsible for selecting the Criteria, and for presenting the Sustainability
Information for Kazakhstan in accordance with that Criteria, in all material respects. This responsibility includes
establishing and maintaining internal controls, maintaining adequate records and making estimates that are
relevant to the preparation of the subject matter, such that it is free from material misstatement, whether due to
fraud or error.
174
175
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Ernst & Young Advisory LLP
Al-Farabi ave., 77/7
Esentai Tower
Almaty, 050060
Republic of Kazakhstan
Tel.: +7 727 258 59 60
Fax: +7 727 258 59 61
www.ey.com/kz
Other matter
Our assurance procedures were limited only to the procedures in relation to the information for the Company’s
subsidiaries in Kazakhstan, and accordingly, we express a conclusion on that information pertinent to the
Kazakhstani subsidiaries only. We did not conduct any procedures in relation to the Group-wide information or
information for the Company’s subsidiaries in Russia.
Conclusion
Based on our procedures and the evidence obtained, we are not aware of any material modifications that
should be made to the Sustainability Information for Kazakhstan for the period from January 1 to December 31,
2023, in order for it to be in accordance with the Criteria.
March 19, 2024
Almaty, Kazakhstan
Independent practitioner’s assurance report continued
EY’s responsibilities
Our responsibility is to express a conclusion on the presentation of the Subject Matter based on the evidence
we have obtained.
We conducted our engagement in accordance with the International Standard for Assurance Engagements
Other Than Audits or Reviews of Historical Financial Information (‘ISAE 3000 (Revised)’), and the terms of
reference for this engagement as agreed with the Company on November 15, 2023. That standard requires
that we plan and perform our engagement to express a conclusion on whether we are aware of any material
modifications that need to be made to the Subject Matter in order for it to be in accordance with the Criteria,
and to issue a report. The nature, timing, and extent of the procedures selected depend on our judgment,
including an assessment of the risk of material misstatement, whether due to fraud or error.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for our limited assurance
conclusions.
Our independence and quality management
We have maintained our independence and confirm that we have met the requirements of the Code of Ethics
for Professional Accountants issued by the International Ethics Standards Board for Accountants, and have the
required competencies and experience to conduct this assurance engagement.
EY also applies International Standard on Quality Management 1, Quality Management for Firms that Perform
Audits or Reviews of Financial Statements, or Other Assurance or Related Services engagements, which
requires that we design, implement and operate a system of quality management including policies or
procedures regarding compliance with ethical requirements, professional standards and applicable legal and
regulatory requirements.
Description of procedures performed
Procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent
than for a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited
assurance engagement is substantially lower than the assurance that would have been obtained had a
reasonable assurance engagement been performed. Our procedures were designed to obtain a limited level of
assurance on which to base our conclusion and do not provide all the evidence that would be required to
provide a reasonable level of assurance.
Although we considered the effectiveness of management’s internal controls when determining the nature and
extent of our procedures, our assurance engagement was not designed to provide assurance on internal
controls. Our procedures did not include testing controls or performing procedures relating to checking
aggregation or calculation of data within IT systems.
A limited assurance engagement consists of making enquiries, primarily of persons responsible for preparing
the Subject Matter and related information, and applying analytical and other appropriate procedures.
Our procedures included the following:
• We verified the list of material topics required to be disclosed in the Subject Matter;
• We interviewed representatives of the Company's divisions involved in the preparation of the Subject Matter;
• We conducted analytical procedures over the quantitative information related to the Subject Matter;
• We examined sustainability-related internal corporate documents of the Company;
• On a sample basis we compared the items included in the Subject Matter with source information;
• We evaluated the presentation of the Subject Matter in the layout of the Report.
We also performed such other procedures as we considered necessary in the circumstances.
176
177
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability data
Health and safety
Polymetal employees' health and safety (Group-wide data)
Injuries, including:
Fatalities
Severe injuries
Minor injuries
LTIFR rate1
Days off work following accidents²
Occupational deseases and health difficulties
Near-misses
Polymetal employees' safety in 2023: site level
2023
10
0
2
8
0.07
1,156
8
4,881
2022
13
0
0
13
0.10
877
9
4,770
2021
15
0
2
13
0.12
1,545
5
4,687
2020
13
0
2
11
0.12
1,583
2
3,653
2019
20
2
3
15
0.19
1,760
1
2,684
LTIFR¹
Fatalities Severe injuries Minor injuries
Days off work
following
accidents
Near-misses
Occupational
deseases and
health
difficulties
Assets in Kazakhstan, including:
Kyzyl
Varvara
Komar mine (part of Varvara hub)
Assets in Russia
0
0
0
0
0.09
0
0
0
0
0
Contractor employees' safety (Group-wide data)
Injuries, including:
Fatalities
Severe injuries
Minor injuries
LTIFR rate1
Contractor employees' safety in 2023: site level
Assets in Kazakhstan, including:
Kyzyl
Varvara
Komar mine (part of Varvara hub)
Assets in Russia
People
Headcount and turnover (Group-wide data)
Employees
Average headcount
Headcount as of 31 Dec³
New employee hires during the reporting period
Percentage of female employees
Contractors working on Polymetal's territories
(average headcount)
Turnover⁴
Voluntary turnover⁵
Involuntary turnover⁶
0
0
0
0
2
2023
4
0
0
4
0.08
0
0
0
0
8
2022
12
0
0
12
0.21
0
0
0
0
1,156
2021
6
1
0
5
0.09
477
179
233
65
4,404
2020
12
0
0
12
0.24
0
0
0
0
8
2019
10
1
0
9
0.20
LTIFR¹
Fatalities Severe injuries Minor injuries
0
0
0
0
0.12
0
0
0
0
0
0
0
0
0
0
0
0
0
0
4
Units
2023
2022
2021
2020
2019
number
number
number
%
14,647
15,562
4,145
21
14,694
15,160
4,584
21
13,392
14,281
4,722
21
12,065
12,679
3,156
21
11,611
11,819
N/A
21
number
6,035
6,078
7,082
5,277
5,336
%
%
4.7
0.9
8.4
0.9
8.2
0.3
6.5
N/A
5.8
N/A
Collective agreements (Group-wide data)
Percentage of employees at operating sites covered by
collective bargaining agreements
Percentage of all employees covered by collective bargaining
agreements
2023
2022
2021
2020
2019
100
77
100
80
100
83
100
83
100
86
1 Lost-time injury frequency rate per 200,000 hours worked.
2 Data for 2021 was restated due to sick leave extension for one of the injured employees.
3 This metric includes core employees and external part-time employees (i.e. those people who simultaneously employed at several enterprises of the Kazakhstan
segment).
4 Due to changes in the internal reporting methodology in the Kazakhstan segment, turnover for other reasons is not disclosed in the integrated report.
5
6
Includes only employees that left the Company voluntarily due to dissatisfaction with their job.
Includes employees that were dismissed.
Headcount and turnover in Kazakhstan segment
Units
2023
2022
2021
2020
2019
Employees
Average headcount
Headcount as of 31 Dec³
Contractors working on Polymetal's territories
(average headcount)
New employee hires during the reporting period
Female
Male
Turnover⁴
Voluntary turnover⁵
– Female
– Male
Involuntary turnover⁶
number
number
number
number
number
number
%
%
%
%
3,202
3,423
1,959
690
143
547
1.4
2.5
1.1
0.4
3,219
3,292
1,866
753
159
594
4.6
2.9
5.1
0.7
2,889
2,995
1,833
615
115
500
4.4
4.4
4.7
0.6
2,633
2,760
1,816
524
113
411
2.8
3.1
2.7
N/A
2,489
2,590
1,495
640
195
445
4.2
3.4
4.3
N/A
Workforce diversity in Kazakhstan segment
Units
2023
2022
2021
2020
2019
Gender
Percentage of female employees
Percentage of female managers⁷
Percentage of female qualified personnel⁸
Percentage of female workers⁹
Gender pay gap10
Taken parental leave, including:
Female employees on parental leave
Male employees on parental leave
Return to work and retention rates after parental
leave
Age
Employees under 30 years old, including:
Female
Male
Percentage of employees under 30 years old
Employees 30-50 years old, including:
Female
Male
Percentage of employees 30-50 years old
Over 50 years old, including:
Female
Male
Percentage of employees over 50 years old
Disability
Disabled personnel
%
%
%
%
%
number
number
number
%
number
number
number
%
number
number
number
%
number
number
number
%
number
20
21
37
14
29
39
39
0
100
593
125
468
17
2,104
447
1,657
61
726
133
593
21
23
20
22
39
14
30
5
5
0
100
582
119
463
18
2,049
440
1,609
62
661
127
534
20
18
19
22
37
14
21
19
19
0
100
565
123
442
19
1,838
378
1,460
61
592
103
489
20
17
18
21
37
12
22
20
20
0
100
595
130
465
22
1,661
335
1,326
60
502
66
436
18
15
18
20
34
13
29
14
14
0
100
568
116
452
22
1,559
304
1,255
60
463
59
404
18
11
Collective agreements in Kazakhstan segment
Percentage of employees at operating sites
covered by collective bargaining agreements
Percentage of all employees covered by collective
bargaining agreements
%
%
100
91
100
93
100
93
100
97
100
98
Units
2023
2022
2021
2020
2019
7 Managers – employees who hold positions as heads of business units: directors, chiefs of divisions, managers, experts or supervisors, etc.; chief specialists, for
example, chief accountant, chief dispatcher, chief engineer, chief mechanic, chief metallurgist, chief geologist; and deputies to these positions.
8 Qualified personnel – employees engaged in engineering and technical works or finance, such as accountants, geologists, dispatchers, engineers, inspectors,
mechanics, quantity surveyors, editors, economists, energy specialists, legal advisors, etc., and assistants to these positions. It also covers office workers in
accounting and control and maintenance positions who are not engaged in manual labour.
9 Workers include personnel who are directly engaged in the process of value creation, as well as those engaged in repair, moving goods, transporting passengers,
providing material services, and so on.
10 Calculated as average remuneration for men to average remuneration for women divided by average remuneration for women. Only the operational assets and
management company in Astana are taken into account; small exploration and non-core assets are not included in the calculation due to the small number of
personnel and irrelevant data on average wages.
178
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Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability data continued
People continued
Employees by type of employment contract in Kazakhstan segment in 2023¹
Employment contract type
Indefinite term employment contract
Fixed-term employment contract
Employment status
Full-time
Part-time
Employee training
Female
Male
Total
Share in total
workforce
678
27
631
74
2,704
14
2,615
103
3,382
41
3,246
177
99
1
95
5
Units
2023
2022
2021
2020
2019
Group total
Trained personnel
Average number of training hours per employee
(per year)²
Total investments in training⁴
Kazakhstan segment
Trained personnel
Average number of mandatory training hours per
year²
By gender
– Female
– Male
By employee level
– Managers
– Qualified personnel
– Workers
By type
– Average number of mandatory training hours
per year³
– Average number of non-mandatory training
hours per year
Total investments in training⁴
Annual investments in training per employee
Female
Male
number
number
$ thousand
number
number
number
number
number
number
number
number
number
$ thousand
$
$
$
9,372
110
1,105
3,083
100
49
112
113
83
103
63
37
202
63
55
65
9,237
78
1,458
2,856
95
49
107
111
81
97
49
49
198
62
53
64
7,396
49
1,129
2,793
74
44
80
136
78
66
71
43
176
63
79
60
7,593
10,453
79
1,131
2,551
74
46
79
79
68
74
74
13
139
54
67
52
N/A
1,215
2,963
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
221
75
N/A
N/A
Units
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
Units
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
thousand m³
Water management
Water management (Group-wide data)
Water withdrawal, including:
Fresh water withdrawal
– Ground water
– Surface water
– External water supply
Waste water collection (drainage, quarry
and mine water)
Water use, including:
Fresh water use
Water reused and recycled, including:
– Recycled water
– Waste water
Water discharge, including:
Used and treated water discharge
– Watercourses
– Landscape
– Sewage
Collected and treated waste water
discharge
– Watercourses
– Landscape
– Sewage
thousand m³
thousand m³
thousand m³
thousand m³
Total water consumption
thousand m³
Share of water recycled and reused
%
Fresh water use intensity
m³/ Kt of processed ore
Fresh water use for processing intensity⁵ m³/ Kt of processed ore
Water management in Kazakhstan segment
Water withdrawal, including:
Fresh water withdrawal
– Ground water
– Surface water
– External water supply
Waste water collection (drainage and
quarry water)
Water use, including:
Fresh water use
Water reused and recycled, including:
– Recycled water
– Waste water
Water discharge, including:
Used and treated water discharge
– Watercourses
– Landscape
– Sewage
Collected and treated waste water
discharge
– Watercourses
– Landscape
– Sewage
thousand m³
thousand m³
thousand m³
thousand m³
Total water consumption
thousand m³
Share of water recycled and reused
%
Fresh water use intensity
m³/ Kt of processed ore
Fresh water use for processing intensity⁵ m³/ Kt of processed ore
2023
13,611
3,282
1,573
816
893
10,329
49,181
3,282
45,898
41,987
3,911
6,793
491
338
0
153
6,302
6,302
0
0
6,818
93
170
125
2023
5,096
1,273
211
634
428
3,824
12,842
1,273
11,569
8,602
2,967
1,408
63
0
0
63
1,346
1,346
0
0
3,688
90
201
178
2022
15,382
3,344
1,756
845
743
12,038
37,786
3,344
34,442
30,691
3,751
8,636
490
306
0
184
8,146
8,146
0
0
6,746
91
183
138
2022
5,076
1,290
226
656
408
3,787
12,378
1,290
11,089
8,073
3,016
1,084
94
0
0
94
990
990
0
0
3,992
90
210
188
2021
16,217
3,480
1,452
1,028
1,000
12,737
35,116
3,480
31,636
27,743
3,893
8,066
412
57
0
355
7,654
7,654
0
0
8,151
90
220
155
2021
7,039
1,542
240
690
611
5,498
12,945
1,542
11,403
8,004
3,399
1,202
269
0
0
269
933
933
0
0
5,838
88
254
195
2020
16,276
3,484
1,285
1,467
732
12,792
33,104
3,484
29,620
26,957
2,663
9,055
391
50
0
341
8,664
8,664
0
0
7,221
89
226
171
2020
6,262
1,621
195
1,051
375
4,642
10,803
1,621
9,182
6,922
2,260
1,214
245
0
0
245
969
969
0
0
5,049
85
283
227
2019
19,672
4,919
1,695
2,236
988
14,753
37,194
4,919
32,276
28,222
4,053
11,054
354
57
0
297
10,700
10,700
0
0
8,618
87
327
268
2019
7,113
2,392
101
1,716
575
4,721
12,363
2,392
9,971
6,310
3,661
1,266
206
0
0
206
1,060
1,060
0
0
5,847
81
431
336
1 Based on headcount at 31 December 2023.
2 The new methodology has been applied since 2021 to ensure better alignment with the GRI-404. Data for 2020 has been restated accordingly for comparative
purposes. Data for 2019 calculated using the old methodology is considered to be unrepresentative.
3 Mandatory training mostly refers to safety training.
4 Travel costs excluded from 2020.
5 Does not include water used for non-technological purposes.
180
Water use in 2023: site level
thousand m³
Water withdrawal
Water use
Water discharge
Ground
water
Surface
water
External
water
supply
Waste
water
collection
Fresh
water
Recycled
water
Waste
water
Water-
courses
Land-
scape
Sewage
Assets in Kazakhstan, including:
Kyzyl
Varvara
Komar mine
(part of Varvara hub)
Assets in Russia
211
180
31
0
1,363
634
0
634
0
183
428
417
0
12
464
3,824
905
1,477
1,442
6,505
1,273
596
664
12
2,010
8,602
4,742
3,860
0
33,385
2,967
905
1,966
96
944
1,346
0
0
1,346
5,294
0
0
0
0
0
63
52
0
11
90
181
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability data continued
Waste management
Waste generation and management (Group-wide data)
Total waste
By composition
Waste rock
Tailings, including¹
Dry tailings
Wet tailings
Share of dry stacked tailings
Other waste (metal, plastic, paper, etc.)
By waste hazard classification
Non-hazardous
Hazardous²
By treatment
Waste disposed
Waste diverted from disposal, including:
Waste reused and recycled
Waste neutralised
Percentage of waste reused of total waste
generated
Units
2023
2022
2021
2020
2019
t
t
t
t
t
%
t
t
t
t
t
t
t
201,183,412
228,292,508
210,621,211
181,959,017
155,923,761
185,130,249
15,988,303
4,741,349
11,246,954
30
64,860
212,735,776
15,539,024
4,350,152
11,188,872
28
17,708
196,841,661
13,751,596
1,954,736
11,796,860
14
27,954
169,287,548
12,627,995
1,348,599
11,279,395
11
43,474
143,439,734
12,469,214
1,212,822
11,256,392
10
14,813
194,938,478
6,244,933
222,261,930
6,030,579
210,080,143
8,502
181,951,432
7,585
155,918,075
5,686
164,801,460
33,926,781
33,926,178
604
180,668,648
54,440,601
54,440,005
595
159,015,806
48,573,139
48,571,506
1,633
141,217,837
31,621,854
31,621,525
330
134,518,857
21,705,608
21,705,334
274
%
17
23
23
17
14
Waste generation and management in Kazakhstan segment
Units
2023
2022
2021
2020
2019
Total waste
By composition
Waste rock
Tailings, including
Dry tailings
Wet tailings
Other waste (metal, plastic, paper, etc.)
By waste hazard classification
Hazardous²
Non-hazardous
By treatment
Waste disposed
Hazardous
Non-hazardous
Waste diverted from disposal, including:
Waste neutralised
Hazardous
Non-hazardous
Waste reused and recycled
Hazardous
Non-hazardous
Percentage of waste reused
of total waste generated
Percentage of mineral waste reused
of total waste generated
Percentage of non-mineral waste reused
of total waste generated
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
%
%
%
128,296,507
131,783,051
130,937,148
124,820,135
114,776,477
122,051,670
6,240,932
0
6,240,932
3,904
125,754,500
6,023,425
0
6,023,425
5,126
124,957,302
5,974,193
0
5,974,193
5,652
119,271,238
5,517,738
0
5,517,738
31,159
109,234,592
5,538,536
0
5,538,536
3,349
6,241,514
122,054,993
6,027,304
125,755,747
5,459
130,931,689
3,919
124,816,216
3,174
114,773,303
118,614,083
6,240,830
112,373,253
9,682,565
48
20
28
9,682,517
672
9,681,845
118,794,261
6,023,960
112,770,301
13,519,423
0
0
0
13,519,423
1,119
13,518,304
124,844,436
698
124,843,739
6,093,589
1,194
1,194
0
6,092,395
3,537
6,088,858
119,548,537
728
119,547,808
5,271,509
28
28
0
5,271,482
3,074
5,268,408
110,069,884
2,758
110,067,126
4,707,904
11
11
0
4,707,893
865
4,707,028
8
8
80
10
10
34
5
5
63
4
N/A
N/A
4
N/A
N/A
Share of waste reused and recycled in 2023: site level
Assets in Kazakhstan, including:
Kyzyl
Varvara
Komar mine (part of Varvara hub)
Assets in Russia
Total waste
generated
Share of waste
reused and
recycled
128,296,507
84,521,743
5,732,841
38,041,923
72,886,905
8
2
30
17
33
1 Data for 2021 was restated due to the improvements of waste accounting procedures.
2
Increase in 2022-2023 is explained by the regulatory changes of tailings waste classification.
182
Waste management in onsite/offsite breakdown in Kazakhstan segment in 2023
Waste disposed
Hazardous waste
Non-hazardous waste
Waste diverted from disposal, including:
Hazardous waste
– Waste neutralised
– Waste reused and recycled
Non-hazardous waste
– Waste neutralised
– Waste reused and recycled
Consumables
Principal consumables
Group total
Lime
Cement and concrete
Quicklime
Grinding body
Sodium cyanide
Flotation reagents
Soda
Ammonium nitrate
Granulite
Perhydrol
Assets in Kazakhstan
Lime
Cement and concrete
Quicklime
Grinding body
Sodium cyanide
Flotation reagents
Soda
Ammonium nitrate
Granulite
Perhydrol
Air quality
Air pollutant emissions (Group-wide data)
Sulphur dioxide (SO₂)
Oxides of nitrogen (NOx)
Carbon monoxide
Solid particles
Ozone depleting (CFC-11 equivalents) substances
emitted
VOCs
Mercury (Hg)
Lead (Pb)
Air pollutant emissions in 2023: site level, t
Units
Offsite
Onsite
Total
t
t
t
t
t
t
t
t
t
t
1,043
0
1,043
2,246
683
11
672
1,563
28
1,535
118,613,040
6,240,830
112,372,210
9,680,319
9
9
0
9,680,310
0
9,680,310
118,614,083
6,240,830
112,373,253
9,682,565
692
20
672
9,681,873
28
9,681,845
Units
2023
2022
2021
2020
2019
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
Units
t
t
t
t
t
t
t
t
80,216
75,314
43,989
17,200
9,629
5,355
4,318
5,206
4,816
3,968
0
0
5,843
6,721
4,027
2,294
4,167
0
0
3,968
2023
1,110
4,730
4,398
8,231
0
1,468
0
4.65
73,036
61,987
43,044
19,027
9,522
6,995
6,039
5,070
4,576
4,059
0
0
6,053
6,514
4,280
2,962
4,279
0
0
4,059
2022
1,151
4,232
3,951
7,465
0
1,335
0
5.00
Ozone
depleting
(CFC-11
equivalents)
substances
emitted
70,968
43,593
37,216
17,272
8,498
6,201
6,827
3,877
5,416
5469
0
0
5,498
6,655
3,964
3,115
4,946
0
0
5,469
2021
1,064
3,472
3,455
5,703
0
1,194
0
5.12
77,081
48,464
32,148
17,016
8,132
5,383
5,844
2,805
5,488
6227
0
0
5,430
6,744
3,427
5,139
3,456
0
0
5,315
2020
847
2,789
2,798
2,946
0
1,004
0
0.17
71,899
34,846
28,217
17,360
8,202
4,193
8,723
N/A
2,772
5496
0
0
6,662
7,483
3,251
2,179
4,780
0
0
5,496
2019
954
2,532
2,818
4,773
0
1,081
0
0.27
VOCs
Mercury (Hg)
Lead (Pb)
Sulphur
dioxide (SO₂)
Oxides of
nitrogen (NOx)
Carbon
monoxide Solid particles
Assets in
Kazakhstan,
including:
Kyzyl
Varvara
Komar mine
(part of Varvara
hub)
Assets in Russia
79
78
0
0
1,031
282
244
28
10
4,448
208
152
5
51
4,191
2,156
651
1,097
408
6,075
0
0
0
0
0
72
68
4
0
1,395
0
0
0
0
0
0
0
0
0
4.65
183
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability data continued
Lands and biodiversity
Land use (Group-wide data)
Total managed land area
Land disturbed during year
Land rehabilitated during year
Total land disturbed and not yet rehabilitated
Land use in 2023, site level
Assets in Kazakhstan, including:
Kyzyl
Varvara
Komar mine (part of Varvara hub)
Assets in Russia
Units
hectares
hectares
hectares
hectares
2023
35,018
2,742
410
16,065
2022
33,887
1,676
464
13,895
2021
32,634
882
290
12,315
Units
hectares
hectares
hectares
hectares
hectares
2020
25,952
1,329
1,404
11,838
2019
19,153
601
136
11,376
Land
disturbed
during year
Land
rehabilitated
during year
85
24
32
30
2,657
0
0
0
0
410
Rare and protected species’ habitats in areas affected by Polymetal operations
IUCN Red List of Threatened Species
Critically endangered
Endangered
Vulnerable
Near threatened
Least concern
National Red Lists
Red Data Book
Endemic species
Assets in Kazakhstan
Group total
Number of
species in the
direct impact
area
(found at the
site)
Number of
species in the
indirect impact
area
(found up to
1 km away
from the site)
Number of
species in the
direct impact
area
(found at the
site)
Number of
species in the
indirect impact
area
(found up to
1 km away
from the site)
24
0
0
0
0
24
0
0
0
151
0
1
6
3
141
20
18
2
131
0
0
3
3
125
2
1
1
452
5
3
14
14
416
64
61
3
Climate and energy data
GHG emissions
Group total
Scope 1 (direct emissions)
Scope 2 (energy indirect emissions)
Total Scope 1 + Scope 2 (market based)
Scope 3 (other indirect emissions)
GHG intensity (Scope 1 + Scope 2)¹
Assets in Kazakhstan
Scope 1 (direct emissions), including:
Combustion of fuels in stationary sources,
including:
– Organisation-owned stationary sources
– Controlled contractor stationary sources
Combustion of fuels in mobile combustion
sources, including:
– Organisation-owned mobile sources
– Controlled contractor mobile sources
Emissions resulting from the waste processing
Scope 2 (energy indirect emissions)
Location based
Market based
Total Scope 1 + Scope 2 (market based)
Scope 3 (other indirect emissions), including:
Upstream
– Fuel and energy-related activities
(not included in Scopes 1 or 2)
– Purchased goods
– Capital goods
– Upstream transportation and distribution
– Business travel
– Employee commuting
Downstream
– Downstream transportation and distribution
– Processing of sold products
GHG intensity (Scope 1 + Scope 2)
Assets in Russia
Scope 1 (direct emissions)
Scope 2 (energy indirect emissions)
Total Scope 1 + Scope 2 (market based)
GHG intensity (Scope 1 + Scope 2)
Units
2023
2022
2021
2020
2019
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
kg of CO₂e
724,432
362,547
1,086,979
610,556
751,486
330,897
1,082,383
585,496
682,645
452,692
1,135,337
546,159
612,669
565,924
1,178,593
625,265
613,717
584,706
1,198,423
610,635
per oz of GE
634
629
677
730
742
t of CO₂e
207,990
201,413
196,200
186,895
186,713
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
t of CO₂e
kg of CO₂e
13,317
13,317
0
194,658
176,158
18,500
15
267,754
251,732
459,722
230,289
190,530
120,977
51,168
8
18,080
140
158
39,759
12,112
27,646
11,628
11,628
0
189,769
171,756
18,013
15
266,218
216,047
417,459
168,235
150,131
107,898
40,397
27
1,681
n/a
128
18,104
11,045
7,059
14,262
14,262
0
181,920
162,408
19,513
18
261,003
230,642
426,842
206,165
181,872
113,015
42,312
30
26,307
n/a
208
24,294
13,543
10,751
15,132
15,132
0
171,743
149,942
21,801
21
248,936
225,005
411,900
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
23,965
23,965
0
162,731
136,913
25,818
16
238,102
238,102
424,814
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
per oz of GE
947
772
765
762
855
t of CO₂e
t of CO₂e
t of CO₂e
kg of CO₂e
per oz of GE
516,442
110,815
627,256
550,073
114,850
664,924
486,445
222,050
708,495
425,774
340,919
766,693
427,004
346,604
773,609
511
564
634
697
703
GHG emissions in 2023 (Scope 1 and Scope 2): site level
Assets in Kazakhstan, including:
Kyzyl
Varvara
Komar mine (part of Varvara hub)
Assets in Russia
Units
t of CO2e
t of CO2e
t of CO2e
t of CO2e
t of CO2e
Scope 1
207,990
142,292
10,303
55,395
516,442
Scope 2
(market based)
Total Scope 1
+ Scope 2
(market based)
251,732
101,620
133,295
16,817
110,815
459,722
243,913
143,598
72,212
627,256
184
185
1 2022 GHG emission intensity has been restated due to changes in GE production accounting methodology (see page 173).
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Sustainability data continued
Climate and energy data continued
Energy consumption by source (Group-wide data)
Units
2023
2022
2021
2020
2019
Diesel, including:
Diesel for transport and mobile machinery
Diesel for electricity generation
Diesel for heat
Electricity purchased, including:
Non-renewable electricity
Renewable electricity
Electricity from nuclear power plants
Coal for heat
Natural gas for heat
Petrol
Waste oils
Renewable self-generation (solar/wind)
GJ
GJ
GJ
GJ
GJ
GJ
GJ
GJ
GJ
GJ
GJ
GJ
GJ
6,629,375
3,798,138
2,493,442
337,795
2,778,983
1,824,246
701,352
253,385
1,011,524
226,933
59,188
32,322
9,413
7,061,250
3,799,044
2,929,821
332,385
2,522,532
1,427,556
824,778
270,198
904,217
163,033
62,040
31,736
12,073
6,568,300
3,704,632
2,570,299
293,368
2,318,344
1,728,421
589,923
0
830,873
150,825
54,541
26,695
3,899
5,972,101
3,353,157
2,331,857
287,087
2,236,462
2,130,843
105,620
0
786,144
145,662
49,701
16,776
3,586
5,832,685
3,236,542
2,299,403
296,740
2,161,367
2,161,367
0
0
856,644
167,911
36,836
24,688
3,824
Total energy
Energy intensity
Energy intensity dynamics
GJ
10,747,737
10,756,881
9,953,477
9,210,432
9,083,955
GJ per Koz of GE
% y-o-y
6,271
0.3%
6,254
6%
5,934
4%
5,702
1%
5,627
-1%
Energy consumption by source in 2023: site level
Diesel
Electricity purchased
Transport
and mobile
machinery
Electricity
generation
Non-
Heat
renewable Renewable
Nuclear
power
Coal for
heat
Natural
gas for
heat
Petrol
Waste
oils
Renewable
self-
generation
(solar/wind)
Assets in
Kazakhstan,
including:
Kyzyl
Varvara
Komar mine
(part of Varvara
hub)
Assets in Russia
2,321,641
1,559,274
125,148
2,689
260
419
62,390
62,390
0
964,126
371,781
530,819
84,746
42,769
33,437
0
0
0
82,181
82,181
0
6,080
0
0
18,267
6,584
8,342
0
0
0
19
0
19
637,219
1,476,497
2,011
2,490,753
0
275,404
61,526
860,120
8,540
616,606
0
6,080
253,385 929,342 220,853
0
3,341
40,921
0
32,322
0
9,395
Electricity and heat consumption by source (Group-wide data)
2023
Units
2022
2021
2020
2019
Electricity consumption, including:
Self-generated non-renewable electricity (diesel)
Self-generated renewable electricity (solar &
wind)
Purchased non-renewable electricity
Purchased renewable electricity
Purchased electricity from nuclear power plants
Heat consumption, including:
Self-generated heat (fossil fuels)
Heat utilisation systems
Renewable and clean electricity share in total
electricity consumption
Renewable electricity share in self-generation
Heat utilisation systems share in total heat
consumption
GJ
GJ
GJ
GJ
GJ
GJ
GJ
GJ
GJ
%
%
%
3,747,637
959,241
3,664,374
1,129,769
3,325,659
1,003,416
3,154,215
914,166
3,066,154
900,962
9,413
1,824,246
701,352
253,385
2,126,380
1,608,573
517,807
26%
1.0%
24%
12,073
1,427,556
824,778
270,198
1,949,157
1,431,370
517,787
30%
1.1%
27%
3,899
1,728,421
589,923
0
1,744,709
1,301,761
442,948
18%
0.4%
25%
3,586
2,130,843
105,620
0
1,628,330
1,235,669
392,660
3%
0.4%
24%
3,824
2,161,367
0
0
1,773,696
1,345,984
427,713
0%
0.4%
24%
Electricity and heat consumption by source in 2023: site level
Electricity
Heat
Self-generated
non-renewable
electricity
(diesel)
Self-generated
renewable
electricity
(solar & wind)
Purchased
non-renewable
electricity
Purchased
renewable
electricity
Purchased
electricity from
nuclear power
plants
Self-generated
heat (fossil
fuels)
Heat utilisation
systems
Assets in Kazakhstan, including:
Kyzyl
Varvara
Komar mine (part of Varvara hub)
Assets in Russia
274
0
41
233
958,968
19
0
19
0
9,395
964,126
371,781
530,819
61,526
860,120
84,746
42,769
33,437
8,540
616,606
0
0
0
0
253,385
150,652
144,572
0
6,080
1,457,921
0
0
0
0
517,807
Environmental expenditure
Total environmental expenditures
Group-wide expenditures, including:
Water
Land¹
Waste
Air quality
Biodiversity
Other²
Expenditures in Kazakhstan segment,
including:
Water
Land¹
Waste
Air quality
Biodiversity
Other²
Units
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
2023
38,369
18,993
696
10,975
3,532
442
3,731
2,188
54
62
133
1,265
79
595
2022
46,649
21,325
4,866
11,448
7,419
N/A
1,589
2,559
198
833
108
1,188
40
192
2021
46,102
2,719
17,132
23,810
1,359
N/A
1082
1,982
227
324
122
1,089
9
210
2020
27,853
2,847
16,798
5,226
2,103
N/A
879
2,551
240
802
457
862
10
180
2019
35,021
19,583
8,121
4,576
2,117
N/A
624
1,687
146
324
104
998
8
108
Environmental expenditures by type in Kazakhstan segment in 2023 (operational/capital), $ thousand
Capital,
$ thousand
Operational,
$ thousand
Share of
capital
expenditures
in total, %
Share of
operational
expenditures
in total,%
Overall expenditires, including:
Water
Land¹
Waste
Air quality
Biodiversity
Other²
Communities investment and engagement
Community investment
Total сommunity investment, including:
Assets in Kazakhstan
Sport
Healthcare
Education
Culture and art
Infrastructure of social importance
Charitable donations
Assets in Russia
Total value of financial contributions
to political parties, politicians, and political
action committees, including:
Assets in Kazakhstan
Assets in Russia
Number of partnership agreements in Kazakhstan
Units
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
number
2023
17,643
7,282
1,920
5
251
96
4,871
139
10,361
0
0
0
3
23
0
0
0
0
23
0
2022
23,226
8,823
1,106
4,561
641
67
1,711
737
14,403
0
0
0
6
2,165
54
62
133
1,265
56
595
2021
19,966
7,437
1,416
4,277
310
238
1,014
182
12,529
0
0
0
6
1
0
0
0
0
29
0
2020
17,897
7,254
705
5,874
209
32
232
202
10,643
0
0
0
6
99
100
100
100
100
71
100
2019
15,148
7,071
4,467
26
80
53
925
1,520
8,077
0
0
0
7
187
186
1
2
Including rehabilitation activities.
Including scientific research, biodiversity protection and noise pollution.
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
Sustainability data continued
Communities investment and engagement continued
Stakeholder engagement
Group stakeholder engagement data
Employees enquiries
Communities enquiries
Stakeholder meetings
Assets in Kazakhstan
Employees enquiries
Living conditions
Work conditions and equipment
(PPEs, tools, etc.)
Remuneration
Social benefits
Health and safety
Company's business strategy
Training and development
Corporate events, professional contests
and sport
Other
Response rate
Communities enquiries
Healthcare
Education
Charity and targeted financial assistance
Infrastructure
Culture and community events
Sport and sports events
Job opportunities
Environmental education
Environmental impact
Other
Response rate
Stakeholder meetings, including:
Public hearings and community meetings
Site visits by external stakeholders
Units
2023
2022
2021
2020
2019
number
number
number
number
number
number
number
number
number
number
number
number
number
%
number
number
number
number
number
number
number
number
number
number
number
%
number
number
number
2,244
780
90
332
76
88
82
56
8
9
3
3
7
100
335
3
15
125
34
16
29
51
4
0
58
100
21
17
4
1,629
839
80
142
36
25
29
18
0
10
2
7
15
100
223
0
17
112
26
5
16
9
7
0
31
100
22
18
4
1,773
613
59
153
41
46
19
15
1
9
1
2
19
100
129
9
11
46
19
2
18
8
2
0
14
100
14
14
0
1,092
572
44
144
50
27
23
10
19
2
4
4
5
100
150
20
15
58
19
6
5
9
1
4
13
100
15
15
0
1,149
588
77
200
77
40
26
5
15
0
17
0
20
100
173
4
30
50
17
20
21
13
3
0
15
100
22
17
5
Compliance and business ethics
Compliance and product responsibility in Kazakhstan segment
Units
2023
2022
2021
2020
2019
Signficant fines
Non-monetary sanctions
Cases brought
Environmental fines
Monetary value of significant fines for non-
compliance with laws and regulations concerning
the provision and use of products and services
Total number of incidents of non-compliance with
regulations and voluntary codes concerning
health and safety impacts of products and
services
$ thousand
$ thousand
$ thousand
$ thousand
$ thousand
number
0
0
0
0
0
0
0
0
0
5.6
0
0
0
0
0
0
0
0
Business ethics
Group total
Cases of corruption¹
Prevented loss
Assets in Kazakhstan
Cases of corruption¹
Prevented loss
Units
2023
2022
2021
number
$ thousand
number
$ thousand
10
0
3
0
0
4
0
3
0
0
4
0
N/A
N/A
0
0
0
0.3
0
0
2020
0
8
18,712
N/A
N/A
0
0
0
0.7
0
0
2019
0
17
307
N/A
N/A
Value distribution
Value generated and distributed Group-wide
Revenue
Cash operating costs (excluding depreciation,
labour costs and mining tax)
Wages and salaries; other payments
and benefits for employees
Payments to capital providers
Payments to shareholders
Taxes (excluding payroll taxes included
in labour costs)
Income tax
Taxes, other than income tax
Mining tax
Social payments
Undistributed economic value retained
Human rights (Group-wide)
Community
rights
Health
and safety
• Injuries and
fatalities
• Occupational
diseases
• Road hazards
• Poor
awareness of
employees of
health and
safety
measures
• Health and
Safety Policy
• ISO 45001
• Limitations in
access to
resources
(water,
electricity, etc.)
• Forced
resettlement
• Poor
accessibility of
grievance
mechanisms
• Community
Engagement
Policy
• Political and
Charitable
Donations
Policy
Salient
human
rights risks
Policies
and
standards
Units
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
2023
3,025
1,209
544
171
0
315
14
163
34
575
2022
2,801
1,695
625
116
0
-32
15
136
44
202
2021
2,890
2020
2,865
2019
2,246
722
471
54
635
257
11
152
28
560
780
394
67
481
275
15
142
28
683
845
397
75
240
107
11
115
24
432
Environment
Labour relations
Security
Diversity
and equality
• Water
• Unfavourable
• Excessive force
• Discrimination
working
conditions
by security
guards
• Forced or child
• Violation of
privacy rights
based on
gender, race,
skin colour,
religion,
nationality,
social origin or
political
opinions
availability and
safety
• Climate change
risk for future
generations
• Hazardous
waste
• Shared
resources
• Environment
Policy
• Climate Policy
• Tailings and
Water Storage
Facilities
Management
Policy
• Mine Closure
Policy
• ISO 14011
• Cyanide Code
labour
• Violation of
collective
bargaining
agreements
• Employment
and Labour
Standard
• Modern
Slavery Act
Transparency
Statement
• The Security
• Diversity and
Force
Management
Standard
• Privacy Notice
Inclusion Policy
• Human
Resources
Policy
Supply chain
• Bribery and
corruption
• Human rights
violation by
contractors
and suppliers
• Supplier Code
of Conduct
• Procurement
Policy
• Anti-Bribery
and Corruption
Policy
• Gifts and
Entertainment
Policy
• Whistleblower
Policy
Reference
links
Read more on
how we mitigate
this risk on
pages 62-63
Read more on
how we mitigate
this risk on
pages 42-45
Read more on
how we mitigate
this risk on
pages 50-55
Read more on
how we mitigate
this risk on
pages 46-49
Read more on
how we mitigate
this risk on our
website
Read more on
how we mitigate
this risk on
pages 48-49
Read more on
how we mitigate
this risk on
pages 64-67
1 Acts of corruption did not involve public or government officials.
188
189
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Sustainability data continued
GRI and SASB content indices
Tailings Storage Facilities (TSF) Disclosure
As of March, 14 2024, Polymetal International plc operates two TSFs in Kazakhstan and has no dry tailings storage facilities
(a further five operating TSFs, two TSFs undergoing closure and four dry tailings storage facilities located at Polymetal's
Russian assets, which were divested in March 2024).
We are dedicated to ensuring that all our operations related to TSFs comply with the Global Industry Standard on Tailings
Management (GISTM), and highly value the initiatives of the Global Tailings Management Institute in enhancing
environmental sustainability and advocating for best practice within the mining industry. In accordance with the GISTM, we
have implemented a Tailings and Hydraulic Facilities Management Policy and appropriate internal standards across all our
facilities with TSFs, incorporating the fundamental principles outlined by GISTM. Additionally, we conduct annual reporting
with detailed information on the status of our TSFs, which is available in this disclosure and on our website.
Kyzyl
Kyzyl TSF
Kazakhstan
N 49˚42'10"
E 81˚ 37'41"
Varvara
Varvara TSF
Kazakhstan
N 52⁰57'26"
E 62⁰07'23"
Bakyrchik Mining Venture LLC
Varvarinskoye JSC
Polymetal asset/hub
1. Tailings facility name/identifier
2. Location
3. Ownership
4. Status
5. Date of initial operation
Active
2018
6. Is the Dam currently operated or closed as per
Operated
currently approved design?
7. Raising method
8. Current Maximum Height
Downstream
34.5 m
9. Current Tailings Storage Impoundment Volume
11,055,965 m³
(as of 1 January, 2024)
Active
2007
Operated
Downstream
29.5 m
38,047,011 m³
10. Planned Tailings Storage Impoundment Volume
in 5 years’ time
Total by 1 January 2026: 13,894,000 m³
Reconstruction is planned after 1 January 2026 to
expand the dam's capacity
Total by 1 July 2025: 42,986,000 m³
Construction of a new dam to be carried out after
1 July 2025
11. Most recent Independent Expert Review
Triving TOO, 2020
12. Do you have full and complete relevant engineering
records including design, construction, operation,
maintenance, and/or closure?
Yes
Governmental supervision authorities, 2022
SRK Consulting, 2021
Yes
13. What is your hazard categorization of this
Significant (see Q20)
Significant (see Q20)
facility, based on the consequence of failure?
14. What guideline do you follow for the
classification system?
• Dam Safety Reference Book of CDA (CDA, 2019)
• National criteria
• Dam Safety Reference Book of CDA (CDA, 2019)
• National criteria
15. Has this facility, at any point in its history, failed
No
to be confirmed or certified as stable, or
experienced notable stability concerns, as
identified by an independent engineer (even if
later certified as stable by the same or a
different firm)?
Yes. The independent audit carried out by SRK
Consulting in 2021 revealed that there is insufficient
data on the stability characteristics of the soil.
Additional engineering and geological surveys were
carried out in 2023 to ensure the dam’s stability.
16. Do you have internal/in house engineering
Internal control
Internal control
specialist oversight of this facility? Or do you have
external engineering support for this purpose?
17. Has a formal analysis of the downstream impact
Yes, 2022
Yes, 2018
on communities, ecosystems and critical
infrastructure in the event of catastrophic failure
been undertaken and to reflect final conditions?
If so, when did this assessment take place?
18. Is there a) a closure plan in place for this dam,
and b) does it include long term monitoring?
a) No;
b) No. Reclamation Program will be developed in
details by the time of the TSF closure
a) No;
b) No. Reclamation Program will be developed in
details by the time of the TSF closure
19. Have you, or do you plan to assess your tailings
facilities against the impact of more regular
extreme weather events as a result of climate
change, e.g. over the next two years?
Yes
Yes
20. Any other relevant information and supporting
documentation. Please state if you have
omitted any other exposure to tailings facilities
through any joint ventures you may have.
(Q13) The consequences of failure are assessed
as follows:
• Number of permanent residents in the area –
none;
• Living environment is not disturbed;
• Harm to ecosystem is not significant and damage
rehabilitation costs less than USD 1.5m;
• Potential failure would be within the land plots
(Q7) Before 2017, each dam was raised partly on
previously placed tailings and partly on crest of the
dam which was constructed during previous phase.
Since 2017, the dam has been raised on
downstream slope.
(Q13) The consequences of failure are assessed
as follows:
• Number of permanent residents in the area –
leased to the Company
none;
• Living environment is not disturbed;
• Harm to ecosystem is not significant and damage
rehabilitation costs less than USD 1.6 m;
• Potential failure would be within the land plots
leased to the Company
GRI content index
Polymetal International plc has reported in accordance with the GRI Standards for the period from 1 January to
31 December 2023.
GRI Standard
Disclosure
Location
Comments
and omissions
GRI 1: Foundation 2021
GRI 2: General
Disclosures 2021
2-1 Organizational details
About this report, p. 2
At a glance, p. 4-5
Where we operate, p. 6-7
SINED’s statement, p. 8
2-2 Entities included in the
organization’s sustainability reporting
Where we operate, p. 6-7
Notes to the consolidated financial
statements, Significant subsidiaries, p. 130
2-3 Reporting period, frequency and
contact point
1 January 2023 – 31 December 2023
(FY 2023)
Contacts, p. 205
2-4 Restatements of information
In the footnotes of the report
2-5 External assurance
About this report. Reporting standards and
external assurance, p. 2
2-6 Activities, value chain and other
business relationships
At a glance p. 4-5
Where we operate, p. 6-7
Business model, p. 12-13.
2-7 Employees
Employees, p. 46-49
2-8 Workers who are not employees
Sustainability data. People, p. 178-180
2-9 Governance structure and
composition
2-10 Nomination and selection of the
highest governance body
2-11 Chair of the highest governance
body
2-12 Role of the highest governance
body in overseeing the management
of impacts
Corporate governance, p. 85-93
Nomination Committee report, p. 100-101
Our governance framework, p. 92
Roles of the Chair, Group CEO and Senior
Independent Director, p. 93
Corporate governance, p. 88-89
Corporate governance. Board’s stakeholder
engagement, p. 113
2-13 Delegation of responsibility for
managing impacts
Our governance framework, p. 92
2-14 Role of the highest governance
body in sustainability reporting
Board areas of focus in 2023 and link
to strategy, p. 89
2-15 Conflicts of interest
2-16 Communication of critical
concerns
2-17 Collective knowledge of the
highest governance body
2-18 Evaluation of the performance of
the highest governance body
Corporate governance, p. 88
Nomination Committee Report,
p. 100-101
Employees. Communications and
engagement, p. 49
Communities. Engagement, p. 62-63
Ethical business. Anti-bribery and
corruption, p. 65
Corporate governance. Board’s stakeholder
engagement, p. 113.
Corporate governance. Training, p. 88
Corporate governance. Board Evaluation,
p. 89
Corporate governance. Principle 3 – Board
composition and resources, p. 90
2-19 Remuneration policies
Remuneration Committee report,
p. 102-112
2-20 Process to determine
remuneration
Remuneration Committee report,
p. 102-112
190
191
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
GRI and SASB content indices continued
GRI content index continued
GRI Standard
Disclosure
Location
Comments
and omissions
GRI 2: General
Disclosures 2021
2-21 Annual total compensation ratio
2-22 Statement on sustainable
development strategy
2-23 Policy commitments
2-24 Embedding policy commitments
2-25 Processes to remediate negative
impacts
2-26 Mechanisms for seeking advice
and raising concerns
2-27 Compliance with laws and
regulations
2-28 Membership associations
2-29 Approach to stakeholder
engagement
Group CEO pay to Group-wide average
employee pay ratio: 1:36
Group CEO pay to average employee pay in
Kazakhstan ratio: 1:54
Sustainability, p. 39-41
Sustainability. Which guidelines do we
follow? p. 42, 46, 50, 56, 62, 64
Corporate governance, p. 85-93
Audit and Risk Committee report, p. 94-97
Safety and Sustainability Committee
report, p. 98-99
Sustainability, p. 39-67
Sustainability, p. 39-67
Safety and Sustainability Committee report,
p. 98-99
Employees. Communications and
engagement, p. 49
Communities. Engagement, p. 62-63
Corporate governance. Board’s stakeholder
engagement, p. 113.
Risk management. Legal and compliance
risk, p. 78
Ethical business, p. 64-67
Sustainability data. Compliance and
business ethics, p. 188
At a glance, p. 4-5
Risk management. Legal and compliance
risk, p. 78
Sustainability. Which guidelines do we
follow? p. 42, 46, 50, 56, 62, 64
Ethical business. Responsible tax policy,
p. 66-67
Employees. Communications and
engagement, p. 49
Communities. Engagement, p. 62-63
Corporate governance. Board’s stakeholder
engagement, p. 113
2-30 Collective bargaining agreements
Employees. Freedom of association, p. 49
GRI 3:
Material Topics 2021
3-1 Process to determine material
topics
Sustainability. Material issues, p. 40-41
3-2 List of material topics
Sustainability. Material issues, p. 40-41
GRI 201: Economic
Performance 2016
3-3 Management of material topics
201-1 Direct economic value
generated and distributed
201-2 Financial implications and other
risks and opportunities due to Climate
and Energy
Value distribution, p. 189
Climate and Energy, p. 58
Employees. Remuneration and social
benefits, p. 46-47
Ethical business. Responsible tax policy
("Tax incentives"), p. 66-67
Sustainability data. Value distribution, p. 189
Climate and Energy, p. 58
201-3 Defined benefit plan obligations
and other retirement plans
Employees. Remuneration and social
benefits, p. 46-47
201-4 Financial assistance received
from government
Ethical business. Responsible tax policy
(“Tax incentives”), p. 66-67
GRI Standard
Disclosure
Location
GRI 202: Market
Presence 2016
3-3 Management of material topics
Employees. Remuneration and social
benefits, p. 46-47
Comments
and omissions
202-1 Ratios of standard entry level
wage by gender compared to local
minimum wage
202-2 Proportion of senior
management hired from the local
community
Average employee salary in Kazakhstan to
average regional salary ratio: 1.9:1
(for women 1.5:1 and for men 1.9:1)
Minimum employee salary in Kazakhstan to
minimum regional salary ratio: 2.9:1
Proportion of managers of local nationality –
85% for male and 96% for female in
Kazakhstan (Group-wide: 94% and 99%
respectively)
GRI 203: Indirect
Economic Impacts 2016
3-3 Management of material topics
Communities. Social investments and
impact assessment, p. 63
203-1 Infrastructure investments and
services supported
Communities. Social investments and
impact assessment, p. 63
GRI 204: Procurement
Practices 2016
3-3 Management of material topics
Ethical business. Supply chain stewardship,
p. 65-66
204-1 Proportion of spending on local
suppliers
Ethical business. Local procurement and
Supply chain stewardship, p. 65-66
GRI 205: Anti-corruption
2016
3-3 Management of material topics
Ethical business. Anti-bribery and
corruption, p. 65-66
205-1 Operations assessed for risks
related to corruption
We have zero tolerance to corruption risks,
operate a Hotline for reporting corruption
concerns and assess all suppliers for
anti-corruption principles (see p. 65-66)
See also our Anti-Bribery and Corruption
Policy approved by the Board of Directors of
Polymetal International plc on 05 December
2023 and available on the website
205-2 Communication and training
about anti-corruption policies and
procedures
Ethical business. Anti-bribery and
corruption, p. 65
205-3 Confirmed incidents of
corruption and actions taken
Ethical business. Anti-bribery and
corruption, p. 65
3-3 Management of material topics
Ethical business. Anti-bribery and
corruption, p. 65-66
206-1 Legal actions for anti-
competitive behavior, anti-trust, and
monopoly practices
Zero (both in Kazakhstan and in total Group)
GRI 206: Anti-
competitive Behavior
2016
GRI 207: Tax 2019
3-3 Management of material topics
207-1 Approach to tax
207-2 Tax governance, control, and
risk management
Ethical business. Responsible tax policy,
p. 66-67
Ethical business. Responsible tax policy,
p. 66-67
Group Tax Strategy approved by the Board
of Directors of Polymetal International plc on
05 December 2023 and available on the
website
Risks management. Principal risks and
uncertainties, p. 72-82
Ethical business. Responsible tax policy,
p. 66-67
Group Tax Strategy approved by the Board
of Directors of Polymetal International plc on
05 December 2023 and available on the
website
Independent auditor’s report, p. 120-123
192
193
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
GRI and SASB content indices continued
GRI content index continued
GRI Standard
Disclosure
Location
Comments
and omissions
GRI Standard
Disclosure
Location
Comments
and omissions
GRI 207: Tax 2019
207-3 Stakeholder engagement and
management of concerns related to
tax
Ethical business. Anti-bribery and
corruption, p. 65
Ethical business. Responsible tax policy,
p. 66-67
Corporate governance. Board’s stakeholder
engagement, p. 113
207-4 Country-by-country reporting
Operating review, p. 20-27
Financial statements, p. 144
GRI 301: Materials 2016
3-3 Management of material topics
Environment. Waste management, p. 52-53
301-1 Materials used by weight or
volume
Sustainability data, Consumables, p. 183
301-2 Recycled input materials used
Environment. Waste management, p. 52-53
GRI 302: Energy 2016
3-3 Management of material topics
302-1 Energy consumption within the
organization
302-3 Energy intensity
Climate and Energy, p. 57
Sustainability data, Energy, p. 186
Climate and Energy. Country focus:
KAZAKHSTAN, p. 60
Sustainability data, Energy, p. 186
Climate and Energy. Country focus:
KAZAKHSTAN, p. 60
Sustainability data, Energy, p. 186
302-4 Reduction of energy
consumption
Climate and Energy. Our Climate Action
Plan, p. 60-61
GRI 303: Water and
Effluents 2018
3-3 Management of material topics
Environment. Water stewardship, p. 51-52
303-1 Interactions with water as a
shared resource
Environment. Water stewardship, p. 51-52
303-2 Management of water
discharge-related impacts
Environment. Addressing water quality risk:
vigilant monitoring and treatment, p. 52
303-3 Water withdrawal
303-4 Water discharge
303-5 Water consumption
Environment. Addressing water stress risk:
optimising fresh water use, p. 52
Sustainability data. Water, p. 181
Environment. Addressing water stress risk:
optimising fresh water use, p. 52
Sustainability data. Water, p. 181
Environment. Addressing water stress risk:
optimising fresh water use, p. 52
Sustainability data. Water, p. 181
GRI 305: Emissions 2016
3-3 Management of material topics
305-1 Direct (Scope 1) GHG emissions
Climate and Energy, Our approach, p. 56
Climate and Energy, Climate governance,
p. 57
Climate and Energy, p. 56-61
Sustainability data, GHG emissions, p. 185
305-2 Energy indirect (Scope 2) GHG
emissions
Climate and Energy, p. 56-61
Sustainability data, GHG emissions, p. 185
305-3 Other indirect (Scope 3) GHG
emissions
305-4 GHG emissions intensity
Sustainability data, GHG emissions, p. 185
Climate and Energy, p. 59
Sustainability data, GHG emissions, p. 185
305-5 Reduction of GHG emissions
Climate and Energy, p. 59
305-6 Emissions of ozone-depleting
substances (ODS)
305-7 Nitrogen oxides (NOx), sulfur
oxides (SOx), and other significant air
emissions
Zero (both in Kazakhstan and Group-wide)
Environment. Air emissions, p. 55
Sustainability data. Air quality, p.183
GRI 306: Waste 2020
3-3 Management of material topics
Environment. Waste management, p. 52-53
306-1 Waste generation and
significant waste-related impacts
306-2 Management of significant
waste-related impacts
306-3 Waste generated
306-4 Waste diverted from disposal
306-5 Waste directed to disposal
Environment. Waste management, p. 52-53
Sustainability data. Waste management,
p. 182-183
Environment. Waste management, p. 52-53
Sustainability data. Waste management,
p. 182-183
Sustainability data. Waste management,
p. 182-183
Sustainability data. Waste management,
p. 182-183
GRI 308: Supplier
Environmental
Assessment 2016
3-3 Management of material topics
Environment. Our approach, p. 51
308-1 New suppliers that were
screened using environmental criteria
Environment. Our approach, p. 51
308-2 Negative environmental impacts
in the supply chain and actions taken
Environment. Our approach, p. 50-51
Environment. Cyanide management, p. 53
3-3 Management of material topics
Employees. Our approach, p. 46
401-1 New employee hires and
employee turnover
Employees. Headcount and turnover, p. 49
Sustainability data. People, p. 178-179
401-2 Benefits provided to full-time
employees that are not provided to
temporary or part-time employees
No such benefits (both in Kazakhstan and
Group-wide)
401-3 Parental leave
Sustainability data. People, p. 179
3-3 Management of material topics
Employees. Our approach, p. 46
402-1 Minimum notice periods
regarding operational changes
The Company fully complies with the
legislation regarding timely notification of
employees about possible operational
changes. See also Employment and Labour
Corporate Standard available on the
website.
GRI 304: Biodiversity
2016
3-3 Management of material topics
Environment. Biodiversity and land, p. 54-55
Environment. Reforestation, p. 55
GRI 401: Employment
2016
304-1 Operational sites owned,
leased, managed in, or adjacent to,
protected areas and areas of high
biodiversity value outside protected
areas
304-2 Significant impacts of activities,
products and services on biodiversity
304-3 Habitats protected or restored
304-4 IUCN Red List species and
national conservation list species with
habitats in areas affected by
operations
Environment. Biodiversity and land.
Protected territories, p. 54
Environment. Biodiversity and land, p. 54-55
Environment. Biodiversity and land.
Protected territories, p. 54
Environment. Biodiversity and land.
Protected species, p. 54
Sustainability data, Lands and biodiversity,
Rare and protected species’ habitats in
areas affected by Polymetal operations,
p. 184
GRI 402: Labor/
Management Relations
2016
194
195
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GRI and SASB content indices continued
GRI content index continued
GRI Standard
Disclosure
Location
Comments
and omissions
GRI Standard
Disclosure
Location
Comments
and omissions
GRI 403: Occupational
Health and Safety 2018
3-3 Management of material topics
Health and safety. Our approach, p. 42-45
403-1 Occupational health and safety
management system
Health and safety, p. 42-45
403-2 Hazard identification, risk
assessment, and incident investigation
Health and safety. Risk assessment and
mitigation, p. 42-43
403-3 Occupational health services
403-4 Worker participation,
consultation, and communication on
occupational health and safety
Health and safety. Health and well-being,
p. 45
Health and safety. Workers engagement
and safety culture, p. 44
403-5 Worker training on occupational
health and safety
Health and safety. Workers engagement
and safety culture, p. 44
403-6 Promotion of worker health
403-7 Prevention and mitigation of
occupational health and safety
impacts directly linked by business
relationships
403-8 Workers covered by an
occupational health and safety
management system
403-9 Work-related injuries
403-10 Work-related ill health
GRI 404: Training and
Education 2016
3-3 Management of material topics
404-1 Average hours of training per
year per employee
404-2 Programs for upgrading
employee skills and transition
assistance programs
404-3 Percentage of employees
receiving regular performance and
career development reviews
Health and safety. Health and well-being,
p. 45
Health and safety, p. 42-45
Risk management. Health and safety risk,
p. 75
Health and safety. Workers engagement
and safety culture, p. 44
Health and safety. Polymetal employees
and Contractor employees health and
safety, p. 44
Sustainability data. Health and safety, p. 178
Health and safety. Occupational health,
p. 45
Sustainability data. Health and safety, p. 178
Employees. Training and talent
development, p. 47
Health and safety. Workers engagement
and safety culture, p. 44
Sustainability data. People, p. 180
Employees. Training and talent
development, p. 47
Employees. Mentoring and succession
planning, p. 47
GRI 405: Diversity and
Equal Opportunity 2016
3-3 Management of material topics
Employees. Diversity and inclusion, p. 48
405-1 Diversity of governance bodies
and employees
Employees. Diversity and inclusion, p. 48
Governance. Board of Directors, p. 86
GRI 406: Non-
discrimination 2016
405-2 Ratio of basic salary and
remuneration of women to men
Sustainability data. People, Gender pay
gap, p. 179
3-3 Management of material topics
Employees. Diversity and inclusion, p. 48
406-1 Incidents of discrimination and
corrective actions taken
Zero incidents (both in Kazakhstan and
Group-wide)
GRI 407: Freedom of
Association and
Collective Bargaining
2016
GRI 408: Child Labor
2016
GRI 409: Forced or
Compulsory Labor 2016
GRI 410: Security
Practices 2016
GRI 411: Rights of
Indigenous Peoples
2016
GRI 413: Local
Communities 2016
GRI 414: Supplier Social
Assessment 2016
GRI 415: Public Policy
2016
GRI 418: Customer
Privacy 2016
3-3 Management of material topics
Employees. Freedom of association, p. 49
407-1 Operations and suppliers in
which the right to freedom of
association and collective bargaining
may be at risk
3-3 Management of material topics
408-1 Operations and suppliers at
significant risk for incidents of child
labor
3-3 Management of material topics
409-1 Operations and suppliers at
significant risk for incidents of forced
or compulsory labor
3-3 Management of material topics
410-1 Security personnel trained in
human rights policies or procedures
3-3 Management of material topics
411-1 Incidents of violations involving
rights of indigenous peoples
Employees. Freedom of association, p. 49
Ethical business. Our approach, p. 64
Ethical business. Supplier due diligence,
p. 66
Ethical business. Human rights, p. 66
Zero operations and suppliers (both in
Kazakhstan and Group-wide)
Ethical business. Our approach, p. 64
Ethical business. Supplier due diligence,
p. 66
Ethical business. Human rights, p. 66
Zero operations and suppliers (both in
Kazakhstan and Group-wide)
All security personnel are outsourced and
receives training on the human rights
principles under relevant national regulation
(both in Kazakhstan and Group-wide).
All security personnel are outsourced and
receives training on the human rights
principles under relevant national regulation
(both in Kazakhstan and Group-wide)
Ethical business. Our approach, p. 64
Ethical business. Human rights, p. 66
Communities. Engagement, p. 62
Zero (both in Kazakhstan and Group-wide)
3-3 Management of material topics
Communities. Our approach, p. 62-63
413-1 Operations with local
community engagement, impact
assessments, and development
programs
413-2 Operations with significant
actual and potential negative impacts
on local communities
3-3 Management of material topics
Where we operate, p. 6-7
Communities, p. 62-63
Zero operations (both in Kazakhstan and
Group-wide)
Ethical business. Supplier due diligence,
p. 66
414-1 New suppliers that were
screened using social criteria
Ethical business. Supplier due diligence,
p. 66
414-2 Negative social impacts in the
supply chain and actions taken
Ethical business. Supplier due diligence,
p. 66
3-3 Management of material topics
Ethical business. Our approach, p. 64
415-1 Political contributions
Zero (both in Kazakhstan and Group-wide)
3-3 Management of material topics
Ethical business. Supplier due diligence,
p. 66
196
197
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
GRI and SASB content indices continued
SASB Content Index
Topic
SASB code
Accounting metric
Data and references
Topic
SASB code
Accounting metric
Data and references
Greenhouse
Gas Emissions
EM-MM-110a.1
Gross global Scope 1 emissions
207,990 t of CO₂e in Kazakhstan (Group-wide
724,432 t of CO₂e)
Percentage covered under emissions-limiting
regulations
No GHG emission-limiting regulations were
imposed in Russia or Kazakhstan in 2023
Waste &
Hazardous
Materials
Management
EM-MM-110a.2
Discussion of long-term and short-term
strategy or plan to manage Scope 1
emissions, emissions reduction targets, and
an analysis of performance against those
targets
Air Quality
EM-MM-120a.1
Air emissions of the following pollutants:
Climate and Energy section, p. 56-61
EM-MM-150a.4
Total weight of non-mineral waste generated
3,904 t in Kazakhstan (Group-wide 64,860 t)
EM-MM-150a.5
Total weight of tailings produced
EM-MM-150a.6
Total weight of waste rock generated
EM-MM-150a.7
Total weight of hazardous waste generated
6,240,932 t in Kazakhstan (Group-wide
15,988,303 t)
122,051,670 t in Kazakhstan (Group-wide
185,130,249 t)
6,241,514 t in Kazakhstan, including
6,240,932 t of tailings waste generated by
Varvara and Kyzyl sites and classified as
hazardous according to the current regulation
in Kazakhstan (Group-wide 6,243,997 t)
(1) CO
208 t in Kazakhstan (Group-wide 4,398 t)
EM-MM-150a.8
Total weight of hazardous waste recycled
672 t in Kazakhstan (Group-wide 2,016 t)
(2) NOx (excluding N₂O)
282 t in Kazakhstan (Group-wide 4,730 t)
(3) SOx
79 t in Kazakhstan (Group-wide 1,110 t)
(4) particulate matter (PM10)
2,156 t in Kazakhstan (Group-wide 8,231 t)
(5) mercury (Hg)
(6) lead (Pb)
Zero (both in Kazakhstan and Group-wide)
0.06 kg in Kazakhstan (Group-wide 4.6 t)
(7) volatile organic compounds (VOCs)
72 t in Kazakhstan (Group-wide 1,468 t)
Energy
Management
EM-MM-130a.1
(1) Total energy consumed
3,542,140 GJ in Kazakhstan (Group-wide
10,747,737 GJ)
(2) percentage grid electricity
27% in Kazakhstan (Group-wide 26%)
(3) percentage renewable
Water
Management
EM-MM-140a.1
Total fresh water withdrawn
Total fresh water consumed
Percentage of each in regions with High or
Extremely High Baseline Water Stress
EM-MM-140a.2
Number of incidents of non-compliance
associated with water quality permits,
standards, and regulations
2% in total energy consumption, including
6.5% of renewable energy in self-generated
electricity in Kazakhstan (Group-wide: 9% in
total energy consumption, including 1% of
renewable energy in self-generated electricity)
1,273 thousand m³ in Kazakhstan (Group-
wide 3,283 thousand m³)
1,273 thousand m³ in Kazakhstan (Group-
wide 3,283 thousand m³, see our total water
consumption structure at page 52)
53% of fresh water withdrawn. Varvara
(including Komar mine) is located in high
water-stress risk areas, according to the
World Resources Institute (WRI) Aqueduct
tool (total group 23%)
In 2023, our operating sites in Kazakhstan
underwent two environmental desk audits.
All identified minor non-compliances were
resolved in accordance with the regulator’s
recommendations without any fines or
significant impact on the business.
EM-MM-150a.9
EM-MM150a.10
Number of significant incidents associated
with hazardous materials and waste
management
Description of waste and hazardous materials
management policies and procedures for
active and inactive operations
Zero (both in Kazakhstan and Group-wide)
Environment section, Waste management,
p. 52
Biodiversity
Impacts
EM-MM-160a.1
Description of environmental management
policies and practices for active sites
Environment section, Biodiversity and lands,
p. 54-55
EM-MM-160a.2
Percentage of mine sites where acid rock
drainage is:
(1) predicted to occur
(2) actively mitigated
(3) under treatment or remediation
Zero in Kazakhstan (14% of total ore
processed Groupwide, Dukat mine)
Zero in Kazakhstan (14% of total ore
processed Group-wide, Dukat mine)
Zero in Kazakhstan (14% of total ore
processed Group-wide, Dukat mine)
EM-MM-160a.3
Percentage of:
(1) proved reserves in or near sites with
protected conservation status or endangered
species habitat
(2) probable reserves in or near sites with
protected conservation status or endangered
species habitat
26% of proved reserves in Kazakhstan,
including Kyzyl and Komar mine (32% of
proved reserves Group-wide as of December
31, 2023)
87% of probable reserves in Kazakhstan,
including Kyzyl and Komar mine (59% of
probable reserves Group-wide as of
December, 31 2023)
Security,
Human Rights
& Rights of
Indigenous
Peoples
EM-MM-210a.1
Percentage of:
(1) proved reserves in or near areas of conflict
Zero (both in Kazakhstan and Group-wide)
(2) probable reserves in or near areas of
conflict
Zero (both in Kazakhstan and Group-wide)
EM-MM-210a.2
Percentage of:
(1) proved reserves in or near indigenous land
(2) probable reserves in or near indigenous
land
EM-MM-210a.3
Discussion of engagement processes and
due diligence practices with respect to
human rights, indigenous rights, and
operation in areas of conflict
Zero in Kazakhstan (our operations in
Kazakhstan do not impact the territories of
indigenous peoples, Russian subsidiaries
were disposed of in March, 2024)
Zero in Kazakhstan (our operations in
Kazakhstan do not impact the territories of
indigenous peoples, Russian subsidiaries
were disposed of in March, 2024)
Ethical business section, Human rights, p. 66
Sustainability data. Human rights, p. 189
198
199
1 Based on 80:1 Au/Ag conversion ratio and excluding base metals.
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023
GRI and SASB content indices continued
SASB Content Index continued
Topic
SASB code
Accounting metric
Data and references
Community
Relations
EM-MM-210b.1
Discussion of process to manage risks and
opportunities associated with community
rights and interests
Ethical business section, Human rights, p. 66
Communities section, Engagement, p. 62-63
EM-MM-210b.2
Number and duration of non-technical delays
Zero (both in Kazakhstan and Group-wide)
Labor
Relations
EM-MM-310a.1
Percentage of active workforce employed
under collective agreements
91% of all employees and 100% of operating
site staff are covered by collective bargaining
agreements (Group-wide: 77% and 100%
respectively)
EM-MM-310a.2
Number and duration of strikes and lockouts
Zero (both in Kazakhstan and Group-wide)
Workforce
Health &
Safety
EM-MM-320a.1
(1) All-incidence rate
(2) fatality rate
(3) near miss frequency rate (NMFR)
(4) average hours of health, safety, and
emergency response training for (a) direct
employees and (b) contract employees
Description of the management system for
prevention of corruption and bribery
throughout the value chain
Production in countries that have the 20
lowest rankings in the Corruption Perception
Index
Tailings storage facility inventory table: (1)
facility name, (2) location, (3) ownership
status, (4) operational status, (5) construction
method, (6) maximum permitted storage
capacity, (7) current amount of tailings stored,
(8) consequence classification, (9) date of
most recent independent technical review,
(10) material findings, (11) mitigation
measures, (12) site-specific EPRP
Summary of tailings management systems
and governance structure used to monitor
and maintain the stability of tailings storage
facilities
Approach to development of Emergency
Preparedness and Response Plans (EPRPs)
for tailings storage facilities
EM-MM-510a.1
EM-MM-510a.2
EM-MM-540a.1
Business
Ethics &
Transparency
Tailings
Storage
Facilities
Management
EM-MM-540a.2
EM-MM-540a.3
Activity Metric
EM-MM-000.A
Production of:
(1) metal ores
(2) finished metal products
EM-MM-000.B
Total number of employees, percentage
contractors
LTIFR (employees): 0 in Kazakhstan;
LTIFR (contractors): 0 in Kazakhstan
(Group-wide: 0.07 and 0.08 respectively)
Fatalities (employees): 0 in Kazakhstan;
Fatalities (contractors): 0 in Kazakhstan
(Group-wide: 0 and 0 respectively)
Near-misses (employees): 477 in Kazakhstan
(Group-wide: 4,881)
2,972 employees attended mandatory training
sessions in Kazakhstan (Group-wide: 6,887).
Each contractor working at any of Polymetal’s
sites is required to undergo safety training
before starting work
Ethical business. Anti-bribery and corruption,
p. 65
Zero (both in Kazakhstan and Group-wide)
Management of Tailings Storage Facilities
Report, p. 190
Environment section, Tailings and overburden
waste, p. 52-53
Environment section, Waste management,
p. 52-53
Management of Tailings Storage Facilities
Report, p. 190
Ore processed in Kazakhstan: 6.3 Mt
(Group-wide: 19.3 Mt)
Gold: 486 Koz in Kazakhstan
(Group-wide: 1,492 Koz)
Silver: 0.031 Moz in Kazakhstan
(Group-wide: 17.7 Moz)
Total production (gold equivalent): 541 Koz in
Kazakhstan (Group-wide: 1,714 Koz)
Average headcount of employees: 3,202 in
Kazakhstan (Group-wide: 14,647)
Average headcount of contractors: 1,959 in
Kazakhstan (Group-wide: 6,035)
200
Glossary
Abbreviations and units
of measurement
AGM
Annual General Meeting
CIS
E&E
EITI
GE
ILO
ISO
IMN
Commonwealth of Independent States
Exploration and evaluation assets
Extractive Industries Transparency Initiative
gold equivalent
International Labour Organisation
International Organisation for Standardisation
Indigenous Minorities of the North
JORC
Australasian Joint Ore Reserves Committee
JSC
LBMA
LGIM
LTIP
N/A
joint stock company
London Bullion Market Association
Legal and General Investment Management Ltd
Long-Term Incentive Programme
not applicable
OHSAS
Occupational Health And Safety Assessment Series
PdE
PGM
PIRC
POX
PPE
SE
TUC
palladium equivalent
platinum group metal
Pensions & Investment Research Consultants Ltd
pressure oxidation
personal protective equipment
silver equivalent
Trades Union Congress
UDHR
Universal Declaration of Human Rights
UBO
CO2e
g/t
GJ
km
Koz
Kt
Ktpa
m
Moz
Mt
Mtpa
MW
Ultimate Beneficial Ownership
CO2 equivalent
gram per tonne
gigajoules
kilometres
thousand ounces
thousand tonnes
thousand tonnes per annum
metres
million ounces
million tonnes
million tonnes per annum
megawatt
Oz or oz
troy ounce (31.1035 g)
p.p.
percentage points
t
TJ
tpd
tonne (1,000 kg)
terajoule
tonnes per day
Technical terms
Assay
A chemical test performed on a sample of any material
to determine the amount of valuable metals contained in
the sample
Ag
Silver
Au
Gold
Base Erosion and Profit Shifting (BEPS)
OECD/G20 project to set up an international framework to
combat tax avoidance by multinational enterprises using base
erosion and profit shifting tools
Carbon-in-leach or CIL
A technological operation in which slurry containing gold and
silver is leached by cyanide in the presence of activated
carbon. Gold is adsorbed onto activated carbon in parallel with
leaching
Carbon-in-pulp or CIP
A technological operation in which slurry containing gold and
silver is leached by cyanide initially without and subsequently in
the presence of activated carbon. Gold adsorption onto carbon
starts only after preliminary leaching
Compound annual growth rate (CAGR)
The rate of return required for an investment to grow from its
opening balance to its ending balance, assuming the
reinvestment of profits at the end of each year during this
period
Concentrate
A semi-finished product of mineral processing (flotation
or gravity separation) containing significantly more value
per unit of weight than ore and subject to further processing for
the production of metals or other substances in final useful
form
Cu
Copper
Cut-off grade
The minimum grade at which mineralised material can be
economically mined and processed (used in the calculation of
ore reserves) leaching with cyanide as the leaching agent
Debottlenecking
The process of identifying specific areas and/or equipment at
our mining facilities that limit production flow and optimising
them to increase the overall capacity
Diamond drilling
Recovers mineral samples from depth or from within areas that
are harder to drill by cutting a long cylindrical core 2cm or more
in diameter
Dilution
The share (percentage) of material below the cut-off grade that
is extracted together and irretrievably mixed with ore during
mining. All other things being equal, higher dilution leads to
lower grade in ore mined
Doré
One of the traditional end-products of a gold/silver mine; an
alloy containing 90% in sum of gold and silver as well as 10%
of impurities
Dry tailings
A method of tailings storage in the form of a filtered wet
(saturated) and dry (unsaturated) cake that can no longer be
transported by pipeline due to its low-moisture content.
Significantly reduces the possibility of dam failure, lowers the
potential damage from such an accident and eliminates tailings
run-off
201
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Glossary continued
Exchange traded fund (ETF)
A type of pooled investment security that operates much like a
mutual fund. ETFs track a particular index, sector, commodity,
or other asset
JORC-compliant
Exploration results, mineral resources and ore reserves are all
reported according to the mining industry’s JORC Code,
managed by the Australasian Joint Ore Reserves Committee
Exploration
Activity ultimately aimed at discovery of ore reserves for
exploitation. Consists of sample collection and analysis,
including reconnaissance, geophysical and geochemical
surveys, trenching, drilling, etc.
Five-whys method
Iterative interrogative technique used to explore the cause-and-
effect relationships underlying a particular problem
Flotation
A technological operation in which ore-bearing minerals are
separated from gangue minerals in the slurry based on
variance in the interaction of different minerals with water.
Particles of valuable concentrate are carried upwards with froth
and collected for further processing
Grade
The relative amount of metal in ore, expressed as grams
per tonne for precious metals and as a percentage for
most other metals
GRI
Global Reporting Initiative (GRI) is the independent,
international organisation that works with businesses,
investors, policymakers, civil society, labour organisations and
other experts to develop sustainability reporting standards and
promote their use by organisations around the world
Head grade
The grade of ore coming into a processing plant
Heap leach
A technological operation in which crushed material is laid on a
sloping, impervious pad where it is leached by a cyanide
solution to dissolve gold and/or silver. Metals are subsequently
recovered from pregnant leach solution by CIC or the Merrill-
Crowe process
Indicated resource
That part of a resource for which tonnage, grade and content
can be estimated with a reasonable level of confidence. It is
based on exploration, sampling and testing information
gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes. The
locations are too widely or inappropriately spaced to confirm
geological and/or grade continuity but are spaced closely
enough for continuity to be assumed
Inferred resource
That part of a resource for which tonnage, grade and content
can be estimated with a low level of confidence. It is inferred
from geological evidence and assumed but not verified
geological and/or grade continuity. It is based on information
gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes, which
may be limited or of uncertain quality and reliability
In-fill drilling
A conventional method of detailed exploration on an already
defined resource or reserve, consisting of drilling on a denser
grid to allow more precise estimation of ore body parameters
and location
Internal rate of return (IRR)
The interest rate at which the net present value of all the cash
flows (both positive and negative) from a project or investment
equal zero and is used to evaluate the attractiveness of a
project or investment
Leaching
The process of dissolving mineral values from solid into the
liquid phase of slurry
Life-of-mine
The length of time during which it is anticipated ore reserves
will be extracted
Measured resource
That part of a resource for which tonnage, densities, shape,
physical characteristics, grade and mineral content can be
estimated with a high level of confidence. It is based on
detailed and reliable exploration, sampling and testing
information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill
holes. The locations are spaced closely enough to confirm
geological and grade continuity
Merrill-Crowe process
A technological operation for extraction of gold and/or silver
after cyanide leaching. In the first step, slurry containing gold
and/or silver is separated into liquid and solid phases by
washing the solids off in counter current decantation
thickeners. In the second step, pregnant leach solution (liquid
phase of slurry) is filtered to remove impurities and de-aerated.
Finally, gold and silver are deposited onto the solid bed of
claylike material where they replace the zinc particles that pass
into a solution. Merrill-Crowe is preferentially used for silver-rich
ores
Mill
A mineral processing plant
Mineralisation
A rock containing valuable components, not necessarily in the
quantities sufficient for economically justifiable extraction.
Consists of ore minerals and gangue
Minerals extraction tax (MET)
Tax base established as the value of extracted minerals or as a
multiple of the quantity of extracted minerals and a certain solid
tax rate subject to a coefficient
Net realisable value (NRV)
Valuation method, common in inventory accounting, that
considers the total amount of money an asset might generate
upon its sale, less a reasonable estimate of the costs, fees, and
taxes associated with that sale or disposal
Offtake agreement
A contract between Polymetal and a purchaser to buy a
specified amount of future production
Open-pittable
Amenable for economically feasible mining by
open-pit methods
Open-pit mine
A mine that is entirely on the surface. Also referred to as
open-cut or open-cast mine
Ore
The part of mineralisation that can be mined and
processed profitably
Ore body
A spatially compact and geometrically connected location of
ore
Ore mined
Ore extracted from the ground for further processing
Ore processed
Ore subjected to treatment in a mineral processing plant
Ore stacked
The ore stacked for heap leach operations
Overburden
This is the material that sits above an ore body, such as the
rock and soil, during exploration
Oxidised ore
Ore in which both ore minerals and gangue are fully or partially
oxidised thus impacting its physical and chemical properties
and influencing the choice of a processing technology
Pd
Palladium
POX or pressure oxidation
A technological operation in which slurry is subjected to high
pressure and high temperature in an autoclave with the goal of
destroying the sulphide particles enveloping gold particles and
making slurry amenable to cyanide leaching
Precipitate
The semi-finished product of mineral processing by the
Merrill-Crowe process, normally containing very high
concentrations of silver and/or gold
Preg-robbing
A characteristic of gold-bearing ore denoting the presence of
organic carbon matter, which may lead to lower recovery in
conventional cyanide leaching. Lower recovery is due to losses
of gold absorbed into the above-mentioned organic carbon
instead of absorbing into man-made carbon introduced to the
slurry in CIP or CIL
Primary ore
Unoxidised ore
Probable reserves
The economically mineable part of an indicated (and in some
cases measured) resource, which has a lower level of
confidence than proved reserves but is of sufficient quality to
serve as the basis for a decision on the development of the
deposit
Production
The amount of pure precious metals produced following
processing, measured in thousands of ounces for gold, millions
of ounces for silver and tonnes for copper
Proved reserves
The economically mineable part of a measured resource,
which represents the highest confidence category of reserve
estimate. The style of mineralisation or other factors could
mean that proved reserves are not achievable in some deposits
Pt
Platinum
Reclamation
The restoration of a site after mining or exploration activity has
been completed
Recovery or recovery rate
The percentage of valuable metal in the ore that is recovered
by metallurgical treatment in the final or semi-finished product
Refractory
A characteristic of gold-bearing ore denoting the impossibility
of recovering gold from it by conventional cyanide leaching
Reserves
The economically mineable part of a measured and/or
indicated mineral resource. It takes into account mining dilution
and losses. Appropriate assessments and studies have been
carried out, and include consideration of and modification by
realistically assumed mining, metallurgical, economic,
marketing, legal, environmental, social and governmental
factors. These assessments demonstrate, at the time of
reporting, that extraction could reasonably be justified.
Reserves are subdivided in order of increasing confidence into
probable reserves and proved reserves
Resources
A concentration or occurrence of material of intrinsic economic
interest in or on the earth’s crust in such form, quality and
quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade, geological
characteristics and continuity of resources are known,
estimated or interpreted from specific geological evidence and
knowledge. Resources are sub-divided in order of increasing
geological confidence, into inferred, indicated and measured
categories
SAG mill
A semi-autogenous grinding mill, generally used as a primary
or first stage grinding solution
SASB
The Sustainability Accounting Standards Board (SASB) was
founded as a nonprofit organization in 2011 to help businesses
and investors develop a common language about the financial
impacts of sustainability. It merged with the International
Integrated Reporting Council (IIRC) into the Value Reporting
Foundation in 2021. SASB Standards guide the disclosure of
financially material sustainability information by companies to
their investors
Step-out exploration drilling
Holes drilled to intersect a mineralisation horizon or structure
along strike or down dip
Stope
A large underground excavation entirely within an ore body, a
unit of ore extraction
Stripping
The mining of waste in an open-pit mine
Tailings
Part of the original feed of a mineral processing plant that is
considered devoid of value after processing
TCFD
Task Force on Climate-Related Financial Disclosures.
Organisation with the goal of developing a set of voluntary
climate-related financial risk disclosures. These disclosures
would ideally be adopted by companies which would help
inform investors and other members of the public about the
risks they face related to climate change
Ultimate Beneficial Ownership (UBO)
The individual or entity that ultimately owns or controls a
company, partnership, trust, or other legal entity.
Underground development
Excavation which is carried out to access ore and prepare it for
extraction (mining)
Waste
Barren rock that must be mined and removed to access ore in
a mine
202
203
Polymetal International plc Integrated Annual Report & Accounts 2023Polymetal International plc Integrated Annual Report & Accounts 2023 Share information
Contacts
As of 14 March 2024, the total issued share capital of the Company comprised 520,341,898 ordinary shares. Тhe Company
holds 46,696,757 shares in treasury. The total number of voting rights in the Company is 473,645,141 ordinary shares of at
par value of $0.03.
Connected Persons as of 14 March 2024
In accordance with the AIX Business Rules, as of 14 March 2024 the Company is aware of the following Connected
Persons holding shares in Polymetal International:
Full name of shareholder
Maaden International Investment
Vitaly Nesis
Maxim Nazimok
Total number
of voting rights
% of voting rights
113,201,189
3,406,302
75,349
23.90%
0.72%
0.02%
Free float
As of 14 March 2024, Maaden International Investment held 23.9%, Directors and senior management had 0.74%
ownership, and the free float was 75.4%.
Registrar
Astana International Exchange
Registrar Limited
55/19 Mangilik El Avenue
Astana
Kazakhstan
London office (UK)
Berkeley Square House
Berkeley Square
London W1J 6BD
United Kingdom
+44 20 7887 1475
Contacts
Registered address (Kazakhstan)
10 Kunaev Street
Astana 010000
Republic of Kazakhstan
+7 717 247 6665
Registered No. 230840900131
Astana office (Kazakhstan)
Polymetal Eurasia LLC
10 Kunaev Street
Astana 010000
Republic of Kazakhstan
+7 717 261 0222
Company secretary
Tania Tchedaeva
Investor relations
Evgeny Monakhov
+44 20 7887 1475 (UK)
Kirill Kuznetsov
+7 717 247 6665 (Kazakhstan)
ir@polymetalinternational.com
Limassol (Cyprus)
Parthenonos, 6
3rd floor
3031, Limassol,
Cyprus
+357 25 558090
204
Polymetal International plc Integrated Annual Report & Accounts 2023
Polymetal International plc Integrated Annual Report & Accounts 2023
205
Polymetal International plc
10 Kunaev Street
Astana 010000
Republic of Kazakhstan
+7 717 247 6665
Registered No. 230840900131
www.polymetalinternational.com
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