Poland's KGHM expects production at Chilean mine to start this month

jueves 17 de julio de 2014 09:39 GYT

By Adrian Krajewski

WARSAW, July 17 (Reuters) - Polish mining company KGHM said it expected to start production this month from its Sierra Gorda mine in Chile, one of the world's largest copper projects, as its bet to expand globally is soon to boost sales.

KGHM, Europe's second-biggest copper producer, acquired the then unfinished project two years ago. It became a symbol of the move by Polish industry to the global stage after years of struggling with the transition from Communist rule.

Since the acquisition, however, the cost of getting production underway at Sierra Gorda, exceeding $4 billion, has been over a third more than KGHM initially expected, while falling global copper prices have hit its profits.

"Construction is finished. I think that this month we'll see the first production of copper ore, and maybe we'll also see the first sales," KGHM Chief Executive Herbert Wirth told a news conference in the Polish capital on Thursday.

KGHM acquired the project in 2012 as part of a C$3 billion ($2.8 billion) purchase of Canada's Quadra FNX, now named KGHM International. That deal allowed it to book the world's fourth-largest copper deposits.

KGHM controls 55 percent of the Chilean project, and Japanese partner Sumitomo holds the rest.

The plan is for Sierra Gorda to produce 217,000 tonnes of copper by 2018, which would account for one third of the group's copper output.