⚠ A Reserve Is Not a PlanModerate threat

KGHM Polska Miedź (KGH) — threat to the moat

Output fell 3,6% in two years against a reserve that did not shrink - the constraint was never the rock.

Forty to fifty years of ore is a statement about geology. It is not a statement about how much copper will be produced in any of those years, and KGHM's own record shows the two coming apart.

Reserves held, output fell (kt of electrolytic copper)592,42023588,72024570,92025The reserve did not shrink; production fell 3,6% in two years
What limits output is not the amount of ore but the rate at which it can be reached - a capital constraint, not a geological one.

Polish electrolytic copper output was 592,4 thousand tonnes in 2023 and 570,9 in 20251 — a decline of about 3,6% against a reserve that did not shrink. Production is limited not by the amount of ore but by the rate at which it can be reached, hoisted, milled and smelted, and every one of those is a capital constraint rather than a geological one.

That is why more than 32 billion złoty of capital expenditure is forecast for 2026-20302 against an orebody nobody doubts. The money buys access, not reserves.

The other softness in a reserve figure is that it is calculated at an assumed price. A higher copper price makes marginal tonnes economic and lengthens the stated life without a metre of new drilling; a lower one shortens it the same way. Run the last decade's price swings through the calculation and the forty-to-fifty-year figure moves by more than most readers assume.

There is a further gap between reserves and results that has nothing to do with geology. The group's profit before tax in 2025 was 5 409 million złoty, of which 2 901 million came from the line covering its involvement in the Sierra Gorda joint venture3 - more than half, from an asset the Polish reserve statement does not cover at all.

The measure is production, not reserves. If output from own concentrate keeps drifting sideways while the reserve life stays constant, the constraint was never the rock.

References
  1. ReportedPolish electrolytic copper output was 592,4 thousand tonnes in 2023 and 570,9 in 2025 — a decline of about 3,6% against a reserve that did not shrink.
    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 ↗
  2. ReportedThat is why more than 32 billion złoty of capital expenditure is forecast for 2026-2030 against an orebody nobody doubts.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026, the Strategy of the KGHM Group 2055+ approved on 3 July 2026 and its targets (payable copper production above 730 thousand tonnes a year of which about 590 thousand from Polish assets including 180 thousand from scrap, adjusted EBITDA averaging 12 billion złoty at a 25,6% margin, capital expenditure above 32 billion złoty across 2026-2030, at least 220 MW of installed renewable capacity, the Sierra Gorda fourth grinding line at 725 million dollars raising output about 20% while shortening the life of mine by three years, the Deep Glogow Deposit Access Program, and shareholders including the State Treasury at 31,79%) — 2026-2030 and beyond · publ. August 2026 · source ↗
  3. ReportedThe group's profit before tax in 2025 was 5 409 million złoty, of which 2 901 million came from the line covering its involvement in the Sierra Gorda joint venture - more than half, from an asset the Polish reserve statement does not cover...
    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 ↗
Sources
Generated September 24, 2026