Polish copper giant KGHM's partner may sell its stake in Chile plant

Poland's copper and silver conglomerate KGHM's partner in the Chilean Sierra Gorda mine, Japan-based Sumitomo Metal Mining Co., Ltd, intends to sell its shares, KGHM said in a statement on Wednesday evening.

"The Management Board of KGHM Polska Miedź announces that on October 7, 2020, it was informed by Sumitomo Metal Mining Co., Ltd., Sumitomo Corporation and SMM Sierra Gorda Inversiones Limitada about the planned commencement of the sale process of 45 percent of shares held by Sumitomo in the Sierra Gorda SCM joint venture," the press release read.

According to the statement, KGHM is not interested in the possible acquisition of Sumimoto's shares in Sierra Gorda, as the Polish company said its strategy for 2019-2023 does not assume a change in the scale of its involvement in Sierra Gorda.

"All of the efforts towards optimisation carried out to date, aimed at enhancing the value of Sierra Gorda, will be continued. They are yielding the expected results, which is reflected in the exceeded half-year production budget targets for 2020," the press release read.

Since September 2011, the Sierra Gorda mine has been a joint venture by KGHM International (55 percent), Sumitomo Metal Mining (31.5 percent) and Sumitomo Corporation (13.5 percent).

The Sierra Gorda open-pit copper and molybdenum mine in Chile is a mining project with a long-term operational perspective, which was launched in June 2014. The mine operates on a copper-molybdenum deposit, which includes both sulphide and oxide copper ores.