London 18/08/2016 - Poland's KGHM profits fell in the first half of this year as lower copper prices continued to weigh.
Europe's second largest copper producer reported a net profit of 296 million Polish zlotys ($78 million) compared to 1.19 billion zlotys ($313 million) a year earlier, it said on Thursday.
"The low prices of both copper and molybdenum, as well as the reduced sales volumes due to the planned maintenance shutdown of the Glogow 1 smelter, had the most significant impact on our results. These factors were partially offset by the favourable depreciation of the Polish złoty against the US dollar, as well as by lower costs," Stefan Swiatkowski, vice-president and CFO of KGHM, said.
At the Sierra Gorda mine in Chile, intensive work is underway to achieve Phase 1 financial and production targets. Selected contracts and agreements are being renegotiated, while the long-term plan of activities and development is being reviewed. Moreover, cooperation with the Chilean Environmental Regulator (SMA) is being continued, the company said.
Eariler this year, the Polish government ordered an audit into KGHM's foreign assets as a direct reaction to the financial situation at the Sierra Gorda mine. KGHM had initially forecasted copper output at the mine to reach 110,000-120,000 tonnes this year.
(Editing by Tom Jennemann)