Government considers KGHM pullout from Chile

The government is considering the withdrawal of the state-controlled company KGHM from a copper mine in Chile. The PLN 11 billion investment, made in 2012, was the largest foreign acquisition in the history of Poland. “By the end of October, verification is expected of geological reports, which will answer the question of whether it makes sense for KGHM to continue the Sierra Gorda project in Chile,” Henryk Kowalczyk, chairman of the Standing Committee of the Council of Ministers, and acting Minister of the State Treasury, told the Sejm. He said the government was facing the difficult decision of whether to write off several billion PLN and pull out of Chile, or try to rescue at least part of the invested funds. The main problem is that rocks with a high content of copper are located deeper than previously thought. The result is lower efficiency and weaker production indicators. Production costs in dollars are now 25 percent higher in Chile than in Poland, mainly due to geological problems, but also due to the weakening of the zloty.