KGHM to wrote down nearly PLN 2 bln

Poland's copper producer KGHM informed it flagged PLN 1.93 billion in writedowns on key foreign investments due to extremely low metals prices, the company reported. Writedowns regarding Chile-based Sierra Gorda mine will exceed PLN 1 billion (including tax effect). According to the company, writedowns will not impact its dividends and credit covenants, as current and predicted financial condition will be taken into account. Furthermore, KGHM has begun revising its 2015-2020 strategy to reduce capital needs in the short and medium term.   KGHM on Monday recognised a $494 million loss following an asset impairment test prompted by persistently low commodity prices. Copper prices fell to their lowest since mid 2009 last month. It also announced a $510 million loss on its investment in the Sierra Gorda SCM firm that owns the Sierra Gorda mine, bringing its total consolidated impairments for the year to $1.04 billion. State-run KGHM said last month it would have to run an asset impairment test the face of the commodity rout. The company gained control of Sierra Gorda in 2011 when it bought Canadian rival Quadra FNX for C$2.87 billion ($2.07 billion), the largest ever foreign acquisition by a Polish company. According to Sumitomo, Sierra Gorda produced about 85,000 tonnes of copper concentrate in 2015 and aims to reach full utilisation by the end of June. (