⚠ A Workforce That Cannot Be Reduced QuicklyHigh threat

KGHM Polska Miedź (KGH) — threat to the moat

The wage bill rose 15% in two years on flat headcount, and part of the increase is contractual.

The strength of having 34 543 people1 is capability. The weakness is that the number is a floor rather than a lever.

Flat headcount, rising cost-0,4%Headcount change, H1 2026+15%Employee benefits, 2023-25+21%Labour cost, H1 2026Of the H1 increase, 473m zł was an upward adjustment to the annual bonus provision
The bonus mechanism means wages take their share of the good years. Nothing gives it back in the bad ones.

Polish labour law, union strength in a mining region, and a 31,79% state shareholder2 combine to make large redundancies a political event rather than a management decision. KGHM has not attempted one: headcount at the parent moved 0,4% in a year3.

That is fine while metals are expensive. It is the defining problem in a downturn, because the wage bill has been growing regardless — 5 475 million złoty in 2023 to 6 303 million in 20254 — and a substantial part of the increase is contractual rather than discretionary. The first half of 2026 added 473 million złoty of annual-bonus provision alone5.

Run the 2023 conditions again with a wage bill a fifth higher and the loss is larger than the 3 691 million złoty the group actually recorded6.

The mitigation is that mining wages in Poland remain far below Western European levels, so the absolute cost base is competitive even after the increases.

The workforce is not confined to the parent. Group companies in Poland employed a further 12 648 people on average in the first half of 2026 and KGHM INTERNATIONAL 3 0187 - so the mining machinery builders, the construction arm and the service companies carry their own fixed costs alongside the mine.

Watch employee benefits expense in the first year that metal prices fall. If it does not fall with them — and the bonus mechanism suggests only part of it will — the operating leverage that flatters the good years works just as hard in reverse.

References
  1. ReportedThe strength of having 34 543 people is capability.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026, production, unit costs and employment (electrolytic copper of 291,5 thousand tonnes of which 183,6 thousand from own concentrate, metallic silver of 696,7 tonnes, the pre-precious-metals-credit unit cost of 52 201 złoty a tonne against a total unit cost of 17,415, C1 of 2,44 USD/lb, average group employment of 34 543 including 18 870 at the parent, and payable copper from the international assets of 59,5 thousand tonnes of which Sierra Gorda 40,2 and Robinson 17,7) — H1 2026 · publ. August 2026 · source ↗
  2. ReportedPolish labour law, union strength in a mining region, and a 31,79% state shareholder combine to make large redundancies a political event rather than a management decision.
    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 ↗
  3. ReportedKGHM has not attempted one: headcount at the parent moved 0,4% in a year.
    Market data (stockanalysis.com, cross-checked against a second source) - a close of 347,25 złoty a share on 22 September 2026, within a day that ranged 339,45 to 350,60, on 200 million shares for a market value of about 69,5bn złoty, roughly 8,0 times trailing net profit of 8 687m złoty and 1,7 times book, on trailing twelve-month revenue of 43 521m złoty and earnings of 43,44 złoty a share; eleven analysts average a 318,28 target, five rating the shares a strong sell against three a strong buy — 22 September 2026 · publ. September 2026 · source ↗
  4. ReportedIt is the defining problem in a downturn, because the wage bill has been growing regardless — 5 475 million złoty in 2023 to 6 303 million in 2025 — and a substantial part of the increase is contractual rather than discretionary.
    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. ReportedThe first half of 2026 added 473 million złoty of annual-bonus provision alone.
    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 ↗
  6. ReportedRun the 2023 conditions again with a wage bill a fifth higher and the loss is larger than the 3 691 million złoty the group actually recorded.
    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 ↗
  7. ReportedGroup companies in Poland employed a further 12 648 people on average in the first half of 2026 and KGHM INTERNATIONAL 3 018 - so the mining machinery builders, the construction arm and the service companies carry their own fixed costs...
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026, production, unit costs and employment (electrolytic copper of 291,5 thousand tonnes of which 183,6 thousand from own concentrate, metallic silver of 696,7 tonnes, the pre-precious-metals-credit unit cost of 52 201 złoty a tonne against a total unit cost of 17,415, C1 of 2,44 USD/lb, average group employment of 34 543 including 18 870 at the parent, and payable copper from the international assets of 59,5 thousand tonnes of which Sierra Gorda 40,2 and Robinson 17,7) — H1 2026 · publ. August 2026 · source ↗
Sources
Generated September 24, 2026