South32: The Rival KGHM Owns a Mine WithNarrow moat
KGHM Polska Miedź (KGH) — moat facet
A competitor everywhere else, and co-signatory on the largest growth project KGHM has.
The strangest relationship on these pages is with a company that is simultaneously a competitor, a partner and a co-signatory on KGHM's largest growth project.
South32 bought 45% of Sierra Gorda in February 2022 for 1,55 billion dollars; KGHM holds the other 55%1. Everywhere else in the world the two are rivals for copper assets, exploration ground and capital. In Antofagasta they are joint owners of an open pit that supplied 30% of KGHM's adjusted EBITDA in 20252.
On 30 June 2026 the two of them jointly took the investment decision to build a fourth grinding line at the Sierra Gorda processing plant3 — a 725 million dollar project, on a 100% basis, expected to raise annual payable metal output by about 20%4.
A joint venture of this size has a specific consequence for a minority shareholder in KGHM: material decisions about a third of the group's cash profit are taken with another listed company in the room, and financing terms for the expansion were still under negotiation at the half-year, with no contractors appointed5.
It also means KGHM cannot simply direct Sierra Gorda's cash. What it has instead is 8 436 million złoty of loans to the venture6 and an equity stake carried at 1 814 million7.
The measure is whether the fourth line is delivered on the 725 million dollar budget. It is the first large capital project KGHM will execute jointly with a partner of comparable size.
The joint investment decision of 30 June 2026 commits both partners to a 725 million dollar expansion, which deepens the partnership on the one asset where they are not rivals.
The joint venture with South32 is equity-accounted, so its sales appear only in the segment note. Revenue growing as the expansion is built shows the shared asset performing; the $725 million budget is the other thing to watch.
Source: KGHM Group condensed consolidated financial statements, first half of 2026 ↗- ReportedSouth32 bought 45% of Sierra Gorda in February 2022 for 1,55 billion dollars; KGHM holds the other 55%.KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026, the Strategy of the KGHM Group 2055+ approved on 3 July 2026 and its targets (payable copper production above 730 thousand tonnes a year of which about 590 thousand from Polish assets including 180 thousand from scrap, adjusted EBITDA averaging 12 billion złoty at a 25,6% margin, capital expenditure above 32 billion złoty across 2026-2030, at least 220 MW of installed renewable capacity, the Sierra Gorda fourth grinding line at 725 million dollars raising output about 20% while shortening the life of mine by three years, the Deep Glogow Deposit Access Program, and shareholders including the State Treasury at 31,79%) — 2026-2030 and beyond · publ. August 2026 · source ↗
- ReportedIn Antofagasta they are joint owners of an open pit that supplied 30% of KGHM's adjusted EBITDA in 2025.KGHM Polska Miedz S.A. Group - Management Board's report on activities in 2025, the financial review and metal markets (adjusted EBITDA of 10 276m złoty against 8 457m in 2024, 5 362m in 2023, 8 865m in 2022 and 10 327m in 2021, of which Sierra Gorda contributed 3 115m and KGHM INTERNATIONAL 1 860m; average copper of 9 945 USD/t against 8 478 in 2023; average silver of 40,03 USD/oz against 28,27 in 2024 and 23,35 in 2023; and an average USD/PLN rate of 3,76 against 4,20 in 2023) — FY2021-FY2025 · publ. 10 March 2026 · source ↗
- ReportedOn 30 June 2026 the two of them jointly took the investment decision to build a fourth grinding line at the Sierra Gorda processing plant — a 725 million dollar project, on a 100% basis, expected to raise annual payable metal output by...KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026, the Strategy of the KGHM Group 2055+ approved on 3 July 2026 and its targets (payable copper production above 730 thousand tonnes a year of which about 590 thousand from Polish assets including 180 thousand from scrap, adjusted EBITDA averaging 12 billion złoty at a 25,6% margin, capital expenditure above 32 billion złoty across 2026-2030, at least 220 MW of installed renewable capacity, the Sierra Gorda fourth grinding line at 725 million dollars raising output about 20% while shortening the life of mine by three years, the Deep Glogow Deposit Access Program, and shareholders including the State Treasury at 31,79%) — 2026-2030 and beyond · publ. August 2026 · source ↗
- ReportedOn 30 June 2026 the two of them jointly took the investment decision to build a fourth grinding line at the Sierra Gorda processing plant — a 725 million dollar project, on a 100% basis, expected to raise annual payable metal output by...KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026, the Strategy of the KGHM Group 2055+ approved on 3 July 2026 and its targets (payable copper production above 730 thousand tonnes a year of which about 590 thousand from Polish assets including 180 thousand from scrap, adjusted EBITDA averaging 12 billion złoty at a 25,6% margin, capital expenditure above 32 billion złoty across 2026-2030, at least 220 MW of installed renewable capacity, the Sierra Gorda fourth grinding line at 725 million dollars raising output about 20% while shortening the life of mine by three years, the Deep Glogow Deposit Access Program, and shareholders including the State Treasury at 31,79%) — 2026-2030 and beyond · publ. August 2026 · source ↗
- ReportedA joint venture of this size has a specific consequence for a minority shareholder in KGHM: material decisions about a third of the group's cash profit are taken with another listed company in the room, and financing terms for the...KGHM Polska Miedz S.A. Group consolidated financial statements for 2025 (group revenue of 36 366m złoty with the parent at 30 964m and KGHM INTERNATIONAL at 3 439m; parent copper revenue of 22 378m and silver revenue of 6 133m; minerals extraction tax of 4 693m against 3 865m in 2024 and 3 496m in 2023; employee benefits of 6 303m; purchased metal-bearing materials of 8 335m; parent net profit of 1 946m against a group profit of 3 688m; total assets of 58 240m, equity of 32 898m and involvement in the Sierra Gorda joint venture of 10 250m including 8 436m of loans) — FY2023-FY2025 · publ. 10 March 2026 · source ↗
- ReportedWhat it has instead is 8 436 million złoty of loans to the venture and an equity stake carried at 1 814 million.KGHM Polska Miedz S.A. Group consolidated financial statements for 2025 (group revenue of 36 366m złoty with the parent at 30 964m and KGHM INTERNATIONAL at 3 439m; parent copper revenue of 22 378m and silver revenue of 6 133m; minerals extraction tax of 4 693m against 3 865m in 2024 and 3 496m in 2023; employee benefits of 6 303m; purchased metal-bearing materials of 8 335m; parent net profit of 1 946m against a group profit of 3 688m; total assets of 58 240m, equity of 32 898m and involvement in the Sierra Gorda joint venture of 10 250m including 8 436m of loans) — FY2023-FY2025 · publ. 10 March 2026 · source ↗
- ReportedWhat it has instead is 8 436 million złoty of loans to the venture and an equity stake carried at 1 814 million.KGHM Polska Miedz S.A. Group consolidated financial statements for 2025 (group revenue of 36 366m złoty with the parent at 30 964m and KGHM INTERNATIONAL at 3 439m; parent copper revenue of 22 378m and silver revenue of 6 133m; minerals extraction tax of 4 693m against 3 865m in 2024 and 3 496m in 2023; employee benefits of 6 303m; purchased metal-bearing materials of 8 335m; parent net profit of 1 946m against a group profit of 3 688m; total assets of 58 240m, equity of 32 898m and involvement in the Sierra Gorda joint venture of 10 250m including 8 436m of loans) — FY2023-FY2025 · publ. 10 March 2026 · source ↗