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WARSAW, March 2 (Reuters) - Europe’s second biggest copper producer, Poland’s KGHM, on Wednesday raised the write-offs on its foreign assets in 2015 to a record $1.3 billion from a previously announced $1 billion.
The state-controlled miner said the revision of the figure produced less than a month ago was due to updated copper price forecasts and a new production schedule on its Victoria mine in Canada.
KGHM, which closed the first three quarters of 2015 with a group net profit of 1.2 billion zlotys ($301 million), said its assets in Chile, Canada, and the U.S. have all incurred impairment losses, mostly due to slumping metals prices.
The largest loss, pegged at $787 million, was recognised by KGHM’s largest overseas mine in Chilean Sierra Gorda, which it co-owns with Japan’s Sumitomo .
KGHM said it may yet revise its calculation of write-offs again before it publishes official 2015 results on March 17. Contrary to its statement a month-ago, the miner did not say the writedown wouldn’t impact on its dividends and credit covenants.
The move is the latest in a series of writedowns on resource assets and downgrades of earnings forecasts by miners in the face of a global commodity slump.
KGHM, also the world’s largest silver miner, has been hit by persistently low commodity prices in the face of worries about Chinese demand. Copper prices fell earlier this year to their lowest since mid 2009.
KGHM gained control of Sierra Gorda in 2011 when it bought Canadian rival Quadra FNX for C$2.87 billion ($2.13 billion), the largest ever foreign acquisition by a Polish company. The mine launched commercial production only last year. ($1 = 3.9923 zlotys) ($1 = 1.3476 Canadian dollars) (Reporting by Adrian Krajewski; Editing by Elaine Hardcastle)