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Poland’s KGHM to cut 1 million tonnes of copper output - CEO-2017 China(Guangzhou)Int’l Non-Ferrous Metal（Copper）Exhibition
8/30/2016 有色金属展-铜材展-non-ferrous metals expo |
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Mr Krzysztof Skora the company''s chief executive officer said that Poland''s KGHM, Europe''s top copper producer, will cut its 2020 target of 1 million tonnes of annual copper output, set by the former management, due to production delays in foreign assets. The goal of 1 million tonnes of copper equivalent was a cornerstone of KGHM''s strategy published by the former management board last year when the group''s production stood at 718.000 tonnes.
The state-run and Poland-focused company tapped foreign markets for the first time in 2011 when it bought Canada''s Quadra FNX, for C$2.87 billion ($2.16 billion), the largest ever foreign acquisition by a Polish company. The move in which KGHM gained control over the Chilean copper mine Sierra Gorda and designed to boost KGHM''s output and help it become a global player, was questioned by the conservative Law and Justice party (PiS), which won election the end of last year. The new treasury minister launched an audit which is to show whether KGHM''s investment in Sierra Gorda was justified.
Mr Krzysztof Skora, who was named KGHM CEO in February as a wider management reshuffle in state-run firms, said that "I think that the former management was over-optimistic when it comes to increasing copper production to more than 1 million tonnes by 2020. For sure we will be verifying these assumptions down."
Mr Skora said that KGHM will publish a strategy review in February next year. On this occasion the company, which has been a hefty dividend payer, will look at its dividend policy, which assumes spending up to a third of KGHM''s annual profits on dividends.
He said that "As of today the policy remains unchanged. It is too early to discuss the dividend for 2016, but it is enough to remind that we paid out dividend for 2015 when the result was heavily burdened by impairment."
Earlier this year KGHM reported writedowns of $1.3 billion on its foreign assets due to falling metal prices, with the largest drag coming from Sierra Gorda.
He added that "If copper prices remain at the current level by the end of this year, I do not see arguments for further write-downs."
-2017 China(Guangzhou)Int’l
Non-Ferrous
Metal（Copper）Exhibition
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