KGHM to sell 2 small mines in Chile and US

The Management Board of KGHM Polska Miedź sent out informational materials, the so-called teasers, to companies potentially interested in acquiring foreign mining assets belonging to KGHM International – the Franke mine and the Carlota mine – KGHM reported in its quarterly report.

For a long time, foreign investments of KGHM did not bring great benefits to the Polish company and burdened the results of the entire group more than they supported. The management has now decided to get rid of two mines: in the USA and Chile. The growing copper prices allowed for the highest profit of the KGHM group since the second quarter of 2012.

The Carlota mine is located in the western United States in the Miami-Globe mining region of Arizona. In the first quarter of 2021, the production of payable copper there amounted to 1.2 thousand tonnes (5 thousand tonnes in 2020).

The Franke mine is located in northern Chile, in the Altamira region, close to the southern border of the Antofagasta region. Production of payable copper in the first quarter amounted to 2.6 thousand tonnes there (12.5 thousand tonnes last year).

For comparison, in Poland, KGHM produced 110.4 thousand tonnes of copper, and in Chilean Sierra Gorda – 22.9 thousand tonnes (converted into 55% of shares owned by the Polish company). As can be seen, the assets put up for sale are not of key importance to the KGHM Group.

The mines of the Canadian company KGHM International produce copper at the highest cost in the KGHM group. In the first quarter of 2021, the average cost of extraction was $ 5,114. per tonne of copper, while in the group’s Polish mines – USD 4 254, and in Chilean Sierra Gorda – USD 2 050.

The decision of the management board of KGHM may be a step towards increasing the efficiency of the entire group while taking advantage of the currently high copper prices. For a ton of metal on international markets, you would have to pay over USD 10 000.


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