✦ The Tax Cut That Has to Be SpentNarrow moat

KGHM Polska Miedź (KGH) — the future bets

The coefficient fell and the bill still doubled, which tells you which variable is in charge.

The single most valuable thing that happened to KGHM's shareholders in 2026 was legislative.

The coefficient fell and the bill rose (zl m)4 693Tax paid, 2025+1 979H1 2026 increase aloneCoefficient reduced from 1 January 2026; the capex deduction, capped at 30% of input tax, arrives in 2029
Relief you have to spend to obtain is a subsidy for investment, and metal prices overwhelmed it immediately.

The Act of 21 November 2025 amending the act on the minerals extraction tax entered into force on 1 January 2026. It introduces a temporary reduction of the coefficient in the tax calculation formula for copper and silver for the years 2026 to 2028, and a mechanism, from 2029, for deducting part of capital expenditure from the tax1.

Against a charge that cost the parent 4 693 million złoty in 20252 — more than twice its net profit of 1 946 million3 — even a partial reduction is worth more than any operating improvement management could realistically deliver.

Two qualifications keep this from being a straightforward gift. The first is that the relief is conditional and capped: the deduction is limited to no more than 30% of the input tax, and KGHM's own filing notes that fully using it will require the involvement of significant capital4. A tax break you have to spend to obtain is a subsidy for investment, not a transfer to owners.

The second is that prices overwhelmed it immediately. Even with the reduced coefficient, the tax charge roughly doubled in the first half of 2026, adding 1 979 million złoty on higher copper and silver prices5.

The measure is the effective burden: minerals extraction tax against pre-tax profit. The coefficient fell and the bill went up, which tells you which variable is in charge.

Moat trajectory: Widening

The reduced coefficient applies from 1 January 2026 for three years, with a capital-expenditure deduction arriving in 2029. On a 4 693 million złoty charge, that is the largest identified swing in earnings.

The number that tests this moat
Reported
Change in minerals extraction tax, first half of 2026
1 979m zł higher than a year earlier

The coefficient cut took effect on 1 January 2026, yet the tax still rose sharply because copper and silver prices did. The cut matters only if this charge falls when prices stop rising.

Source: KGHM Group Management Board's report, first half of 2026 ↗
References
  1. ReportedIt introduces a temporary reduction of the coefficient in the tax calculation formula for copper and silver for the years 2026 to 2028, and a mechanism, from 2029, for deducting part of capital expenditure from the tax.
    KGHM Polska Miedz S.A. Group condensed consolidated financial statements for the first half of 2026 (the note stating that revenues from no single contractor exceeded 10% of group sales, the geographical breakdown by end-customer location totalling 21 927m złoty with Poland at 4 845m and Germany at 2 815m, parent revenue of 14 430m from copper and 5 843m from silver, the amending act on the minerals extraction tax in force from 1 January 2026, the group structure and equity accounting of Sierra Gorda, and derivative counterparty concentration) — H1 2026 · publ. August 2026 · source ↗
  2. ReportedAgainst a charge that cost the parent 4 693 million złoty in 2025 — more than twice its net profit of 1 946 million — even a partial reduction is worth more than any operating improvement management could realistically deliver.
    KGHM Polska Miedz S.A. Group consolidated financial statements for 2025 (group revenue of 36 366m złoty with the parent at 30 964m and KGHM INTERNATIONAL at 3 439m; parent copper revenue of 22 378m and silver revenue of 6 133m; minerals extraction tax of 4 693m against 3 865m in 2024 and 3 496m in 2023; employee benefits of 6 303m; purchased metal-bearing materials of 8 335m; parent net profit of 1 946m against a group profit of 3 688m; total assets of 58 240m, equity of 32 898m and involvement in the Sierra Gorda joint venture of 10 250m including 8 436m of loans) — FY2023-FY2025 · publ. 10 March 2026 · source ↗
  3. ReportedAgainst a charge that cost the parent 4 693 million złoty in 2025 — more than twice its net profit of 1 946 million — even a partial reduction is worth more than any operating improvement management could realistically deliver.
    KGHM Polska Miedz S.A. Group consolidated financial statements for 2025 (group revenue of 36 366m złoty with the parent at 30 964m and KGHM INTERNATIONAL at 3 439m; parent copper revenue of 22 378m and silver revenue of 6 133m; minerals extraction tax of 4 693m against 3 865m in 2024 and 3 496m in 2023; employee benefits of 6 303m; purchased metal-bearing materials of 8 335m; parent net profit of 1 946m against a group profit of 3 688m; total assets of 58 240m, equity of 32 898m and involvement in the Sierra Gorda joint venture of 10 250m including 8 436m of loans) — FY2023-FY2025 · publ. 10 March 2026 · source ↗
  4. ReportedThe first is that the relief is conditional and capped: the deduction is limited to no more than 30% of the input tax, and KGHM's own filing notes that fully using it will require the involvement of significant capital.
    KGHM Polska Miedz S.A. Group condensed consolidated financial statements for the first half of 2026 (the note stating that revenues from no single contractor exceeded 10% of group sales, the geographical breakdown by end-customer location totalling 21 927m złoty with Poland at 4 845m and Germany at 2 815m, parent revenue of 14 430m from copper and 5 843m from silver, the amending act on the minerals extraction tax in force from 1 January 2026, the group structure and equity accounting of Sierra Gorda, and derivative counterparty concentration) — H1 2026 · publ. August 2026 · source ↗
  5. ReportedEven with the reduced coefficient, the tax charge roughly doubled in the first half of 2026, adding 1 979 million złoty on higher copper and silver prices.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026, financial results (revenue of 24 711m złoty up 40,8%, profit for the period of 5 579m against 580m, adjusted EBITDA of 9 198m up 89,1%, capital expenditure of 1 663m, net debt down 13,5% to 4 691m, equity of 39 814m, available financing of 16 978m, and the 1 979m złoty increase in the minerals extraction tax on higher copper and silver prices) — H1 2026 · publ. August 2026 · source ↗
Sources
Generated September 24, 2026