November 17, 2016 / 2:57 PM / 2 years ago

Poland's KGHM unlikely to drop its Chilean copper project - minister

RZESZOW, Poland, Nov 17 (Reuters) - Poland’s state-run copper producer KGHM is unlikely to withdraw from its Chilean copper project Sierra Gorda, the head of the prime minister’s chancellery Henryk Kowalczyk said on Thursday.

KGHM bought the Sierra Gorda mine in 2011, hoping it would help it become an international player and increase output. But the plunge in copper prices drove KGHM to a record loss last year, much of it due to an impairment loss on Sierra Gorda.

The acquisition was questioned by the conservative Law and Justice party (PiS) which won last year’s election. The new treasury minister launched an audit into whether KGHM’s investment in Sierra Gorda was justified.

“The first stage (of the Sierra Gorda project) will be continued, withdrawing from it is unlikely,” Kowalczyk told reporters on the sidelines of an industry conference.

KGHM said earlier that it has put its foreign assets under review and will arrive at the final decision on whether to continue the investment and in what form by the end of this year. (Reporting by Pawel Florkiewicz; Writing by Agnieszka Barteczko; Editing by Alexandra Hudson)

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