EU fast-tracks KGHM’s $3.46B Polish copper projects

The European Commission has granted strategic status to two copper projects worth a combined more than 9.5 billion zlotys ($3.46 billion) being developed by Polish state-controlled producer KGHM Polska Miedz (WSE: KGH) under the EU’s Critical Raw Materials Act.

The designation covers the Retków-Grodziszcze mining project and the conversion of KGHM’s Legnica smelter into a recycling smelter, the company said Friday. Both investments could benefit from faster permitting, improved administrative coordination and help accessing financing.

But reliable access to copper scrap remains a condition for the recycling project’s success. Measures to limit scrap exports and ensure supplies for European industry are needed, KGHM said.

The decision comes as Brussels seeks to expand domestic production and processing of critical minerals while reducing Europe’s reliance on China and other non-EU suppliers. The act targets domestic capacity sufficient to meet at least 10% of the bloc’s annual needs through extraction, 40% through processing and 25% through recycling by 2030.

Mining and recycling

KGHM plans to extract more than 100 million tonnes of ore from Retków-Grodziszcze through 2055, containing nearly 1.5 million tonnes of copper and more than 5,000 tonnes of silver. The project includes construction of the Retków shaft and supporting infrastructure.

At Legnica, the company aims to establish a recycling operation capable of producing about 135,000 tonnes of electrolytic copper and 250 tonnes of nickel annually.

The investments build on KGHM’s wider copper growth plans. The company, the EU’s largest producer of mined copper, joined forces with BHP last month to seek new copper deposits globally.

Output timetable

Strategic status generally limits permitting to 27 months for extraction projects and 15 months for processing and recycling projects, subject to exceptions, under the EU’s permitting rules.

Shorter approval procedures could reduce delays before construction and commissioning, helping the projects reach production sooner than under a prolonged permitting process. They don’t set a deadline for output to begin.

Legnica’s recycling start-up is scheduled for 2030, while completion of Retków’s shaft sinking and connections to underground workings is planned for 2035, according to KGHM’s strategy timetable. The shaft milestone isn’t a confirmed first-production date, and Friday’s announcement didn’t bring forward either schedule.

Despite the regulatory benefits, the designation doesn’t guarantee financing for either investment.