The Scrap Heap: Supplier and Substitute at OnceWide moat

KGHM Polska Miedź (KGH) — moat facet

The fastest-growing source of copper needs no orebody, no permit and pays no extraction tax.

The fastest-growing source of copper supply requires no orebody, no shaft, no permit and pays no minerals extraction tax. It is copper that has already been mined.

Polish payable copper in the 2030 plan (kt)~410From the mine~180From scrapOf about 590 thousand tonnes planned from the Polish assets
The fastest-growing source of copper needs no orebody, no permit and pays no extraction tax - and KGHM is its customer.

KGHM is on both sides of it. The company spent 8 335 million złoty in 2025 on purchased metal-bearing materials1, a substantial part of it scrap, and it expects roughly 180 thousand tonnes of its planned 590 thousand tonnes of Polish payable copper to come from scrap by the end of the decade2. Recycling is the reason KGHM refines more copper than it mines3.

It is also a competitor to the mine, and a structurally advantaged one. Secondary copper needs a fraction of the energy of primary production, faces none of the permitting difficulty, and expands automatically when prices rise because higher prices pull more material out of the waste stream. Every tonne of recycled cathode is a tonne the world does not need from a 1 300-metre shaft.

The honest counterweight is that recycling cannot meet growth. Copper demand tied to grids, wind and electrification is rising faster than the stock of scrap can be recovered, which is precisely why the copper price set records in August 20264.

The measure is the share of KGHM's own refined output coming from purchased material — about a third in the first half of 20265. When that share rises, KGHM is winning as a smelter and its mine is losing relevance.

Moat trajectory: Narrowing

Secondary copper needs no orebody and no permit, and KGHM's own plan leans on it harder each year. As a competitor to the mine, it is the one gaining ground.

The number that tests this moat
Reported
Copper scrap processed, first half
105 kt dry weight, about 99 kt of copper, in H1 2026

The 2026-2030 plan counts on 180 kt a year from scrap; the half-year run rate shows whether the smelters are getting there.

Source: KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026 ↗
References
  1. ReportedThe company spent 8 335 million złoty in 2025 on purchased metal-bearing materials, a substantial part of it scrap, and it expects roughly 180 thousand tonnes of its planned 590 thousand tonnes of Polish payable copper to come from scrap...
    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 ↗
  2. ReportedThe company spent 8 335 million złoty in 2025 on purchased metal-bearing materials, a substantial part of it scrap, and it expects roughly 180 thousand tonnes of its planned 590 thousand tonnes of Polish payable copper to come from scrap...
    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 ↗
  3. ReportedRecycling is the reason KGHM refines more copper than it mines.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in 2025, the production and unit-cost record (electrolytic copper of 570,9 thousand tonnes against 588,7 in 2024, 592,4 in 2023 and 560,4 in 2020; metallic silver of 1 323 tonnes against 1 403 in 2023; C1 payable copper production cost of 3,16 USD/lb for the Polish assets against 1,03 for KGHM INTERNATIONAL and 0,86 for Sierra Gorda; group payable copper of 710,0 thousand tonnes against 753,7 in 2021; wire rod and wire production of 279,9 thousand tonnes; and world mined silver production of about 25,3 thousand tonnes) — FY2018-FY2025 · publ. 10 March 2026 · source ↗
  4. ReportedCopper demand tied to grids, wind and electrification is rising faster than the stock of scrap can be recovered, which is precisely why the copper price set records in August 2026.
    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 ↗
  5. Moat Explorer calcThe measure is the share of KGHM's own refined output coming from purchased material — about a third in the first half of 2026.
    Moat Explorer calculation - arithmetic on figures KGHM reports: ore grade (30 387 thousand tonnes of copper over 1 858 259 thousand tonnes of ore, and 91 837 tonnes of silver over the same), the by-product credit (52 201 less 17 415 złoty a tonne), the European share of parent sales (about 17 147m of 21 927m), copper and silver as a share of parent revenue (22 378m and 6 133m of 30 964m), the minerals extraction tax against parent net profit (4 693m over 1 946m), the dividend against trailing earnings (1,50 against 43,44 a share), and own concentrate as a share of refined output (183,6 of 291,5 thousand tonnes) — FY2023-H1 2026 · publ. September 2026 · source ↗
Sources
Generated September 24, 2026