Polish copper miner KGHM does not plan to suspend more production, put projects on hold or sell assets as the industry battles sinking prices, its chief executive told Reuters. KGHM, Europe's No 2 copper producer, put its McCreedy West copper mine in Canada on "care and maintenance" - suspending but not shutting down operations - last month as part of a cost-cutting plan.
"At this point, we are not planning to put any more assets on care and maintenance, we are not planning to sell any assets, not planning to limit our investment spending and we are not putting on hold any of our projects," said CEO Herbert Wirth. "We don't want to survive, we want to develop." Major miners including Glencore and US-listed Freeport have also cut production as prices fall towards levels where some operations are no longer economically viable.
Copper prices have rebounded from six-year lows below $5,000 touched in August, helped partially by planned production cuts. Wirth said he expected copper prices of between $5,000 and $5,200 a tonne next year, with the state of the Chinese economy and US Federal Reserve's interest rates decisions expected to remain key drivers of markets. The CEO said a copper price of $5,000 per tonne was a "pain" threshold for KGHM but that a weak Polish zloty was cushioning the company from the fall in metal prices.
"We said in July that copper prices of $5,000 per tonne will be critical for us and it's still true," said Wirth. The CEO had also told Reuters in July that the firm may start making a loss if prices fall to $4,400. "But we have most of our costs in zloty and we get the income in dollars, so even though the copper price is low, thanks to the weaker currency we are still very comfortable." The zloty has weakened almost 5 percent this year against the dollar, adding to a 17.3 percent slide in 2014. KGHM's Polish assets account for 80 percent of its production, with the remaining output from overseas assets in Chile, United States and Canada.
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