Thursday, October 2, 2014

Poland/Chile/Japan: Poland's KGHM, Japan's Sumitomo Join Forces to Mine for Precious Metals

According to EFEPoland’s KGHM inaugurated a copper mine in northern Chile that it owns in a joint venture with Japan’s Sumitomo and which represents the largest investment outlay by a Polish company outside the country’s borders.

The inauguration ceremony took place at the Sierra Gorda mine, located in the Atacama desert in Chile’s Antofagasta region.

Chilean President Michelle Bachelet, Polish and Japanese government officials and KGHM and Sumitomo executives were in attendance.

KGHM, Europe’s second-largest copper producer, took over the ongoing project in 2012 as part of its acquisition of Canada’s Quadra FNX (now KGHM International) for just over 2 billion euros (some $2.52 billion).

The state-controlled Polish miner has a 55% stake in Sierra Gorda, while Sumitomo has the remaining 45%.

Sierra Gorda’s operations under Polish management began in July, when the mine started providing copper-ore feedstock to a processing plant.

COMMENT: During the first production stage, Sierra Gorda will yield some 120,000 tons of copper, 50 million pounds of molybdenum and 60,000 ounces of gold annually.

The mine will be expanded within five years and its production capacity will increase to 220,000 tons of copper, 25,000 pounds of molybdenum and 64,000 ounces of gold per year over the life of the deposit, which is estimated to be roughly 23 years.

The general manager of the Sierra Gorda project, Maciej Sciazko, told EFE that the inauguration of the mine, the first major business venture abroad by a Polish company, could serve to attract other investment from the Central European country in Chile and elsewhere in Latin America.

“We want to be a springboard so that other Polish companies also come and invest. We’re encouraging other companies to follow us in taking this step,” Sciazko said. 

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