Sierra Gorda Copper-Molybdenum Mine May Not Need Support Next Year

Polish copper producer KGHM said that its Sierra Gorda copper-molybdenum mine in Chile may no longer need financial support from next year, despite the coronavirus-related risks, the mine posted a 150% leap in second-quarter core profit.

The Sierra Gorda mine is located in Chile - in the Atacama Desert in the Antofagasta region, approximately 60 km south-west of the city of Calama in the north of Chile, at an altitude of approximately 1700 m. The Catabela area is currently being exploited with a target mining depth of approximately 1000 m.

KGHM owns 55% of Chile's Sierra Gorda copper-molybdenum mine, which produces approximately 110,000 tons of ore per day. KGHM said that due to a record high production output, the mine's EBITDA in the second quarter increased by 150% year-on-year to 324 million zlotys.

Pawel Gruza, deputy head in charge of foreign assets at KGHM, said at a press conference: "We are looking with optimism at Sierra Girda's future financial results." He added that starting next year, the mine will no longer need financial support from its owners, a year later than initially planned due to the pandemic.

KGHM chief executive Marcin Chludzinski said that only three of the 15 global mining companies managed to increase copper production in the second quarter. He added that despite the outbreak, KGHM's mines at home and abroad continue to operate.

He said, "personally, for me, it has been the most difficult time in this company - the time that started in February and has continued up to date. My worst nightmare was getting a phone call saying that the scale of infections is such that our mining or smeltering sections have to be closed."

He added that KGHM initially considered reducing production preventively to limit the risk of the spread of the epidemic at its Sierra Gorda copper-molybdenum mine but ultimately decided to continue normal operations through special health and safety procedures.

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