KGHM Polska Miedź S.A. is launching an expansion of the Sierra Gorda mine worth USD 725 million

A ceremony was held at the Sierra Gorda mine in Chile to lay the foundation stone for the construction of the fourth grinding line. The project now underway will increase the plant's processing capacity from around 48 million to around 60 million tonnes of ore per year, and boost copper production by around 20 per cent. The value of the investment being carried out by KGHM Polska Miedź S.A. in partnership with South32 Ltd. is approximately USD 725 million. The project forms part of a long-term strategy to build value for Sierra Gorda and strengthen KGHM's position in the global non-ferrous metals market.

The ceremony was attended by representatives of Chile's central and regional authorities, the Polish Ministry of State Assets, the Management Board and Supervisory Board of KGHM Polska Miedź S.A., as well as representatives of Sierra Gorda SCM, KGHM Chile, KGHM's partner South32, and the companies involved in the project. The laying of the foundation stone symbolically marks the start of a project aimed at significantly increasing ore processing capacity and improving the efficiency of KGHM's most important overseas asset.

'This project is a vote of confidence - in the future of Sierra Gorda, in Chile's potential, and in the partnership between our countries. This is an important example of Poland's contribution to the development of global industry and confirmation that companies such as KGHM can operate effectively on the global market, carry out major investments and strengthen our country's standing in the world', said Eliza Zeidler, Secretary of State at the Ministry of State Assets.

'The expansion of Sierra Gorda to include a fourth grinding line is a project of strategic importance to the KGHM Group. It will enable the mine to increase its production capacity, improve its efficiency and make fuller use of its potential, in line with the objectives of the KGHM 2055+ Strategy. The continued development of Sierra Gorda strengthens KGHM's presence in Chile and increases the importance of its overseas assets within the Group's operations. In this way, we are strengthening the international side of our business, responding to the growing global demand for copper and building long-term value for the Group', said Remigiusz Paszkiewicz, President of the Management Board of KGHM Polska Miedź S.A.

Investing in the future of Sierra Gorda

'The aim of the project is to significantly improve Sierra Gorda's operational efficiency by increasing annual production of copper and associated metals by around 20 per cent, thereby reducing the C1 unit cost. At the same time, we are carrying out further exploration work in the Catabela Northeast area, which will enable us to better assess the potential for the further development of our mine in the coming years. We hope that the geological potential of the deposit will enable us to extend its operational life, and in an optimal scenario, we do not rule out launching another mining project in this region' said Anna Sobieraj-Kozakiewicz, Vice-President of the Management Board of KGHM Polska Miedź S.A. responsible for Overseas Assets.

The project involves the construction of a fourth grinding line, comprising a new jaw crusher, an HPGR mill, a ball mill, a flotation line and the necessary process infrastructure. The expansion will enable increasing the volume of ore processed by around 20 per cent, make better use of the existing water and energy infrastructure, and reduce the unit production cost of C1. Completion of the plant expansion is scheduled for the end of 2029, with full production capacity expected to be reached in the second half of 2030. The expansion will be financed from operating cash flows and Sierra Gorda's available debt instruments.

Significant deposit potential

An exploration programme is being carried out at the Sierra Gorda mine, aimed at identifying resources outside the current Catabela working area. Catabela Northeast (CNE), situated in the immediate vicinity of the mine's current operation site, is the most promising and high-priority area, together with the zones adjacent to the field currently under production. Areas situated further away with development potential in the longer term have also been identified. Geochemical and geophysical surveys, as well as core drilling, have confirmed the continuity of the porphyry copper-molybdenum mineralisation, which remains open at depth. Preliminary estimates suggest a potential of several billion tonnes of ore with copper and molybdenum grades typical of this type of deposit. The proximity of the current excavation and the results achieved to date make CNE a key area for a possible extension of the Sierra Gorda's operational life. A further objective of the programme is to determine the extent and grade of the mineralisation, as well as the size of the resource base.

Sierra Gorda - a strategic asset for KGHM

Sierra Gorda is an open-cast copper and molybdenum mine situated in the Antofagasta region of the Atacama Desert in northern Chile, approximately 60 km south-west of the City of Calama. This is the largest foreign investment in KGHM's history and the Group's key international asset. In 2025, the mine produced approximately 160,000 tonnes of commercial-grade copper and over 8 million pounds of molybdenum. The mine operates as a joint venture between KGHM Polska Miedź S.A., which holds a 55 per cent stake, and South32 Ltd., which holds a 45 per cent stake. The plant uses seawater supplied via a pipeline from the Mejillones area, and 100 per cent of the electricity used by the mine comes from renewable sources. This asset strengthens the international nature of KGHM's operations, which cover three continents: Europe, North America and South America.