KGHM Reports Near-Doubling of EBITDA Amid Copper Price Surge, Greenlights $725M Chile Expansion
Poland's copper giant delivered a 90% jump in first-half EBITDA as metal prices soared, while approving a major capacity expansion at its Chilean Sierra Gorda mine.
Strong First-Half Performance
KGHM Polska Miedz delivered robust first-half results, with revenues climbing nearly 40% and EBITDA surging approximately 90% year-over-year, CEO Remigiusz Paszkiewicz announced at the company's earnings call. Net profit increased tenfold compared to the same period in 2025, while the company simultaneously reduced debt and strengthened cash flows (earnings call, 2026-08-20).
The Polish copper and silver miner, with a market capitalization of approximately $19 billion, attributed the performance to favorable macroeconomic conditions and operational improvements. Production of payable copper rose 20% year-over-year, while silver production increased 8% (earnings call, 2026-08-20). Operating margin expanded from 25% to 34% across the group.
"We want to take advantage of the good macroeconomic environment in order to build a financial base for the implementation of our investment in Poland and to take advantage of what our foreign assets offer," Paszkiewicz said (earnings call, 2026-08-20).
Major Chilean Expansion Approved
The company's most significant announcement was the approval of a fourth processing line at the Sierra Gorda mine in Chile, a $725 million investment jointly funded with partner South32. The project, which will be financed through debt instruments and operating cash flows, is expected to increase metal production by 20% and further reduce C1 costs (earnings call, 2026-08-20).
Construction will last three years, with full operations targeted for the second half of 2030. Peak capital expenditures are expected in 2027 and 2028, Vice President Anna Sobieraj-Kozakiewicz explained. The expansion will add a crusher, HPG mill, ball mill, and flotation line to the existing facility (earnings call, 2026-08-20).
Sobieraj-Kozakiewicz noted that while the expansion initially shortens the mine's life by three years to 2045 based on current proven reserves, ongoing exploration drilling around the Catabela excavation area has identified "very likely high mineralization" for both copper and molybdenum that could extend operations (earnings call, 2026-08-20).
Mixed Operational Results
Sierra Gorda's first-half copper production reached 40,200 tonnes, down 5% year-over-year, partially attributed to torrential rains in Chile during the first quarter. Silver production rose 38% to 14.9 tonnes, while gold output fell 37% to 9,300 ounces due to ore composition. Molybdenum production increased 6% to 11.8 million pounds (earnings call, 2026-08-20).
At KGHM International's Robinson facility in the United States, production challenges emerged as operations transitioned through the Liberty pit, which contains less metal-rich ore than anticipated. Equipment failures, including thickener and mill breakdowns, compounded the difficulties. Robinson is implementing a recovery program aimed at meeting budget targets in the second half (earnings call, 2026-08-20).
Strategic Initiatives
Beyond mining operations, KGHM secured over PLN 200 million in funding from Poland's national environment protection fund for photovoltaic and wind farm projects. The company is also accelerating renovation work at its Glogów foundry and pursuing exploration of polyhalite extraction in Poland (earnings call, 2026-08-20).
Paszkiewicz emphasized that cost optimization programs could deliver "several hundred million" in efficiencies while maintaining employment security and working conditions. The company remains committed to dividend payments alongside its development agenda (earnings call, 2026-08-20).
This article was generated by MarginX from the earnings call on 2026-08-20. It is not investment advice.