⚠ Being Indispensable Is Why the Tax ExistsHigh threat

KGHM Polska Miedź (KGH) — threat to the moat

Immobility is what makes KGHM safe, and immobility is what makes it taxable.

The protection and the levy are the same fact seen from two ends.

Minerals extraction tax paid by the parent (zl m)202320242025In 2023 the levy took 3 496m zł from a group that lost 3 691m zł for the year
A government imposes a production tax on an industry that cannot leave. Immobility is the whole mechanism.

A government does not impose a production-based tax on an industry that might leave. It imposes one on an industry that cannot: a deposit is where it is, the shafts are sunk, 34 543 jobs sit on top of it1, and no board is going to relocate a 1 348-metre mine2 to a friendlier jurisdiction. Immobility is what makes KGHM safe, and immobility is what makes it taxable.

The amounts are not marginal. The parent paid 4 693 million złoty of minerals extraction tax in 2025 and 3 865 million in 20243. In 2023 it paid 3 496 million while the group lost 3 691 million for the year4 — a levy that took cash out of a company in the year it earned nothing, because the levy is charged on copper and silver produced and their prices, not on profit.

The tax is also inside the cash cost. KGHM's C1 definition explicitly includes it5, so Poland's fiscal choices show up in a number investors use to compare KGHM with miners in Chile and Nevada.

The state has just demonstrated it works in both directions: from 1 January 2026 a temporary reduction in the coefficient for copper and silver applies for 2026 to 20286. What one act reduces, another can restore.

Watch the tax against pre-tax profit rather than the headline rate. In 2025 it was larger than the parent's profit; that ratio is the honest measure of who this company works for.

References
  1. ReportedIt imposes one on an industry that cannot: a deposit is where it is, the shafts are sunk, 34 543 jobs sit on top of it, and no board is going to relocate a 1 348-metre mine to a friendlier jurisdiction.
    KGHM press office - the GG-1 shaft at Kwielice, at 1 348 metres the deepest mining pit in Poland, connecting the Polkowice-Sieroszowice and Rudna mines — 2023 · publ. 30 June 2023 · source ↗
  2. ReportedIt imposes one on an industry that cannot: a deposit is where it is, the shafts are sunk, 34 543 jobs sit on top of it, and no board is going to relocate a 1 348-metre mine to a friendlier jurisdiction.
    KGHM press office - the GG-1 shaft at Kwielice, at 1 348 metres the deepest mining pit in Poland, connecting the Polkowice-Sieroszowice and Rudna mines — 2023 · publ. 30 June 2023 · source ↗
  3. ReportedThe parent paid 4 693 million złoty of minerals extraction tax in 2025 and 3 865 million in 2024.
    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. ReportedIn 2023 it paid 3 496 million while the group lost 3 691 million for the year — a levy that took cash out of a company in the year it earned nothing, because the levy is charged on copper and silver produced and their prices, not on profit.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in 2024, which carries the 2023 comparatives (minerals extraction tax of 3 496m złoty in 2023 against a group loss of 3 691m for that year, parent silver revenue of 4 389m, and parent employee benefits expense of 5 475m) — FY2023-FY2024 · publ. March 2025 · source ↗
  5. ReportedKGHM's C1 definition explicitly includes it, so Poland's fiscal choices show up in a number investors use to compare KGHM with miners in Chile and Nevada.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in 2025, the production and unit-cost record (electrolytic copper of 570,9 thousand tonnes against 588,7 in 2024, 592,4 in 2023 and 560,4 in 2020; metallic silver of 1 323 tonnes against 1 403 in 2023; C1 payable copper production cost of 3,16 USD/lb for the Polish assets against 1,03 for KGHM INTERNATIONAL and 0,86 for Sierra Gorda; group payable copper of 710,0 thousand tonnes against 753,7 in 2021; wire rod and wire production of 279,9 thousand tonnes; and world mined silver production of about 25,3 thousand tonnes) — FY2018-FY2025 · publ. 10 March 2026 · source ↗
  6. ReportedThe state has just demonstrated it works in both directions: from 1 January 2026 a temporary reduction in the coefficient for copper and silver applies for 2026 to 2028.
    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 ↗
Sources
Generated September 24, 2026