KGHM begins $725 million expansion of Sierra Gorda copper mine in Chile
KGHM Polska Miedz and South32 have started construction of a $725 million fourth grinding line at Chile's Sierra Gorda mine to raise ore throughput to 60 million tonnes annually.
Expansion launched at Sierra Gorda
Polish mining group KGHM Polska Miedz and Australian partner South32 initiated the expansion of the Sierra Gorda copper and molybdenum open-pit mine on Thursday, 1 October 2026. The ceremony to lay the cornerstone for a fourth grinding line took place at the site in Chile's Atacama Desert, located approximately 60 kilometers southwest of Calama. Chilean President Jose Antonio Kast attended the event alongside Polish Deputy Minister of State Assets Eliza Zeidler, KGHM Chief Executive Officer Remigiusz Paszkiewicz, and Vice Presidents Anna Sobieraj-Kozakiewicz and Krzyzewski. The joint venture operates under an ownership structure where KGHM holds a 55% controlling stake and South32 owns the remaining 45%. Company leadership and government delegates formally marked the start of construction across the open pit.
Processing capacity and construction timeline
The expansion requires an investment of approximately $725 million, financed directly by Sierra Gorda through operating cash flows and available debt facilities. The scope of work involves installing a fourth grinding line equipped with a new jaw crusher, high-pressure grinding rolls (HPGR), a ball mill, a flotation line, and associated processing infrastructure. Once operational, the site's annual ore processing capacity will increase from approximately 48 million tonnes to 60 million tonnes, raising copper output by about 20%. The upgrades are also designed to optimize existing water and energy infrastructure while reducing the mine's C1 unit production costs. Construction is scheduled to conclude in late 2029, with the facility reaching full operational capacity in the second half of 2030.
- Cornerstone laid for construction of the fourth grinding line
- Construction of the fourth grinding line scheduled to conclude
- Facility scheduled to reach full operational capacity
- Current capacity
- 48 M tonnes
- Post-expansion capacity
- 60 M tonnes
Financial performance and debt schedule
Sierra Gorda began repaying invested funds and outstanding shareholder loans in 2025 following years of development. Foreign assets, led by the Chilean site, generated 50% of KGHM Group's EBITDA during 2025 and the first half of 2026. KGHM Vice President Krzyzewski noted that Sierra Gorda's outstanding debt obligations attributable to KGHM stand at $2.7 billion. Over 1 billion PLN flowed back to KGHM in loan repayments during the first half of the year alone, with full debt clearance projected within roughly four years under prevailing market prices. Paszkiewicz described the operational turnaround during the ceremony.
It turns out that after many years, this is the pearl in KGHM's crown. Already last year and in the first half of this year, 50% of the entire KGHM group's EBITDA comes from foreign assets.
Long-term resource development abroad
Polish government representatives pointed to the Chilean operation as a key driver of production diversification. Deputy Minister of State Assets Eliza Zeidler noted that improving operational results at Sierra Gorda benefit other entities within the group while supporting long-term strategy. Paszkiewicz explained that domestic geological and demographic constraints require KGHM to expand its international resource base. The company is actively conducting joint exploration programs with mining groups across Chile, neighboring Argentina, and other global jurisdictions to sustain output.
We have joint exploration with large mining corporations both in Chile and in neighboring Argentina, as well as in several other places around the world. The foreign resource base must be expanded, and foreign production must grow for KGHM to develop.
