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The Warsaw Voice » Business » December 19, 2013
Business & Economy
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Ambitious Plans by KGHM
December 19, 2013   
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Polish copper giant KGHM Polska Mied¼ is preparing to launch major projects in Chile and Canada.

The Sierra Gorda project in Chile involves the launch of a mine, scheduled to take place in the second quarter. To begin with, the mine will produce 110,000 tons of copper concentrate. It will also be a major producer of molybdenum. Initially, molybdenum production is planned at 11,000 tons, or 10 percent of total production worldwide.

“The Sierra Gorda project will significantly increase our copper output,” Jaros³aw Romanowski, executive vice president and chief financial officer of KGHM Polska Mied¼, told the Newseria Biznes news service. “Production will be relatively stable for about five years after which period we intend to increase it to more than 200,000 tons [annually]. With the 55 percent stake KGHM has in the Sierra Gorda mine, this will be an increase of about 30 percent in copper output by KGHM in comparison with the level of output in Poland.” Molybdenum production, in turn, will decrease after five years, but the level of revenue should not change significantly, Romanowski said.

Another key international project for KGHM this year is the construction of a copper, nickel and platinum mine in the Canadian province of Ontario.

“The Victoria project is at the feasibility study stage,” Herbert Wirth, CEO and president of the management board of KGHM Polska Mied¼, told Newseria. “We have already secured specific decisions, including environmental clearance; the forest has already been cut down in the area designated for the mine shaft. I hope we will start drilling the shaft at the end of the year. The construction of the shaft will allow us to get a better insight into the deposits. We expect that there will be far more resources there, including those we are particularly interested in—platinum and palladium, leading to a significant reduction in extraction costs.” Production is scheduled to start in 2018, but the mine is expected to reach full capacity five years later, at the end of 2023.

Meanwhile, the copper giant is also expanding its business in Poland. KGHM plans to begin exploratory drilling for potassium-magnesium salt and rock salt near the Bay of Puck in the Pomerania region in northern Poland this year. In September the company applied to the Ministry of the Environment for a concession to drill for and examine deposits in this area.

The company is also applying for two exploration licenses for copper and silver ore deposits in Lubuskie province in the northwest of Poland as well as for copper ore deposits in the Silesian lowland in the south. Expanding the company’s extraction capacity is key to further business growth, Wirth said.
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