Lubin – A kilometre below the rolling countryside of south-west Poland, scores of men labour in hot, cramped tunnels mining copper that has made KGHM Europe’s second-largest producer of the red metal.
Yet the future of the Polish miner lies halfway around the world, in the rocky hills of Ontario, Canada, and the Atacama Desert of northern Chile.
There, the success of two big investments will determine whether KGHM becomes Poland’s first truly global company, or an overambitious regional player that failed to achieve international status.
The state-controlled group has already spent more than $7bn on acquiring and developing the Canadian and Chilean mines, assets that give it control of the world’s fourth-largest copper deposits.
But the decline in the commodities markets — pegged to China’s economic slowdown — since KGHM’s bold acquisitions in 2012 has left the investments hanging in the balance.
“The disaster on the Chinese market has had a huge impact on commodities,” said Herbert Wirth, KGHM’s chief executive. “This, of course, has a huge negative impact for the cash flow from these investments.”
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