In its first half earnings report for 2014, KGHM booked a net profit of PLN 1.12 billion ($357 million). The results were in line with market expectations, according to the company. A disciplined approach to costs, along with stable levels of production, allowed the company to deal effectively with challenging macroeconomic conditions.
KGHM’s copper production for the first half of 2014 stood at 216,000 metric tons (mt), nearly flat in a year-on-year comparison, as higher volume of mined ore offset a 2% decline in the copper grade. At the same time, the efficiency of production of concentrate increased, with the contents of copper in concentrate reaching 23.1%.
In the second quarter of 2014, positive production results in Poland were accompanied by an increase of production at KGHM’s mines abroad. The Morrison mine in Canada saw a 15% increase of copper content, while compared to the previous quarter. Precious metals production in this period was 13% higher than in the first quarter of 2014.
Output rose also at the Robinson mine in the United States, due to the positive effects of blending ores from various pits. As a result, there was a record mill throughput of 99.5%.
Work continues to progress at the Sierra Gorda mine in Chile, which officially began production at the end of July. The projected average production during its more than 20-year lifespan will be about 220,000 mt/y of copper, 25 million lb of molybdenum and 64,000 oz of gold. Additional production potential lies in the processing of the oxide ore.
“Investment and pro-development activities of KGHM are strongly linked to the cost discipline, which we maintain for several quarters,” said Jaroslaw Romanowski, executive vice president and CFO for KGHM. “Costs in the first half of 2014 fell by PLN 58 million ($18.5 million) in comparison to the previous year, excluding tax on mineral extraction and impact of purchased concentrate. The efficiency actions are particularly important due to lower prices of copper and silver.”
KGHM recently signed a revolving loan agreement for $2.5 billion. An additional loan in the amount of PLN 2 billion ($637 million) was granted by the European Investment Bank.
