Rio Tinto names Shell’s Katie Jackson as new copper chief
Jackson, who is the current president of National Grid Ventures, an energy group, joins Rio Tinto on September 1.
WARSAW, Oct 25 (Reuters) – Poland’s KGHM, one of the world’s biggest copper and silver producers, will likely improve core earnings this year as high copper prices and output from its mines offset smelter troubles, Chief Executive Radoslaw Domagalski-Labedzki said.
Speaking ahead of quarterly earnings due on Nov. 14, the CEO told Reuters: “I think that the third-quarter results will confirm that the full-year EBITDA will be higher than last year.
“Reaching the 7 billion zlotys EBITDA target in 2021 is absolutely within reach, but would it be possible to achieve earlier? … Logic says this should be possible,” he added, citing copper prices, foreign exchange rates and cost-cutting.
In 2016 KGHM posted core earnings or earnings before interest, tax, depreciation and amortisation of 4.67 billion zlotys.
Copper prices rose above $7,000 a tonne last week for the first time in more than three years, as inventories of the metal continue to fall. Three-month copper on the London Metal Exchange traded at $6,979 a tonne by 0725 GMT on Wednesday.
“In the mid-term there are no reasons for copper prices to fall below the current levels,” Domagalski-Labedzki said, an outlook that will help KGHM improve core earnings this year despite a recent smelter accident which will reduce output of electrolytic copper by 14,000 tonnes.
KGHM will likely miss its 2017 output target of electrolytic copper from its own concentrates of 401,000 tonnes and production will be similar to last year’s 376,000 tonnes.
“We still produce own concentrates, but we are not refining them,” Domagalski-Labedzki said. “There will not be a significant difference year on year. In the coming years we would like to maintain the plan of annual production at above 400,000 tonnes.”
The surge in copper prices has also had an impact on KGHM‘s plans regarding its mining assets in the United States, including the Robinson and Carlota mines.
“Disinvestment options are still being considered, but there is no time pressure,” the CEO said. Asked if KGHM will sell an asset next year, he said: “Nothing can be ruled out”.
KGHM is also analysing a potential increase in next year’s capital expenditure and will invest significant funds on projects designed to make production more efficient.
“When it comes to automation this might be a certain need, especially that working conditions at the mines are becoming more difficult,” the CEO said.
Domagalski-Labedzki also said KGHM, one of Poland’s biggest electricity consumers, sees a need to increase its own power generation and looks forward to the government’s decision on Poland’s first nuclear power plant, expected this year.
(Reporting by Agnieszka Barteczko; editing by David Holmes).
