⚠ The Credit Vanishes When Silver DoesHigh threat

KGHM Polska Miedź (KGH) — threat to the moat

The credit is worth about 34 800 złoty a tonne, and it goes in exactly the year copper does.

The uncomfortable way to read KGHM's cost disclosure is backwards.

Group adjusted EBITDA (zl m)20212022202320242025The 2023 trough was barely half the peak, and nothing changed underground
The credit is worth about 34 800 złoty a tonne, and it disappears in exactly the year the copper price does.

If the by-product credit takes a tonne of copper from 52 201 złoty to 17 4151, then the credit is worth about 34 800 złoty a tonne. Silver supplies the great majority of it. Halve the silver price and roughly half of that disappears, taking the cost of a tonne of copper to something in the mid-thirty-thousands — against a copper price that would very likely be falling at the same time.

This is not a hypothetical shape. In 2023 the group lost 3 691 million złoty2 in a year when silver averaged 23,35 dollars an ounce3 and the copper price was soft. The by-product credit was smaller, the pre-credit cost was not, and the arithmetic produced the only loss in recent memory.

What makes it dangerous rather than merely cyclical is the tax. The minerals extraction tax is charged on production and metal prices rather than on profit, and it sits inside the cash cost4. It falls more slowly than the credit does.

The group's own history gives the range. Adjusted EBITDA was 10 327 million złoty in 2021, 8 865 in 2022, then 5 362 in 2023 before recovering to 8 457 and 10 2765. The trough was barely half the peak, and it arrived without anything changing underground.

The number to watch is the silver price against the pre-credit cost per tonne. At 52 201 złoty and rising6, the mine needs a great deal of silver to stay in the money, and the amount it needs grows every year that the pre-credit figure does.

References
  1. Moat Explorer calcIf the by-product credit takes a tonne of copper from 52 201 złoty to 17,415, then the credit is worth about 34 800 złoty a tonne.
    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 ↗
  2. ReportedIn 2023 the group lost 3 691 million złoty in a year when silver averaged 23,35 dollars an ounce and the copper price was soft.
    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 ↗
  3. ReportedIn 2023 the group lost 3 691 million złoty in a year when silver averaged 23,35 dollars an ounce and the copper price was soft.
    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 ↗
  4. ReportedThe minerals extraction tax is charged on production and metal prices rather than on profit, and it sits inside the cash cost.
    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 ↗
  5. ReportedAdjusted EBITDA was 10 327 million złoty in 2021, 8 865 in 2022, then 5 362 in 2023 before recovering to 8 457 and 10 276.
    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 ↗
  6. ReportedAt 52 201 złoty and rising, the mine needs a great deal of silver to stay in the money, and the amount it needs grows every year that the pre-credit figure does.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026, production, unit costs and employment (electrolytic copper of 291,5 thousand tonnes of which 183,6 thousand from own concentrate, metallic silver of 696,7 tonnes, the pre-precious-metals-credit unit cost of 52 201 złoty a tonne against a total unit cost of 17,415, C1 of 2,44 USD/lb, average group employment of 34 543 including 18 870 at the parent, and payable copper from the international assets of 59,5 thousand tonnes of which Sierra Gorda 40,2 and Robinson 17,7) — H1 2026 · publ. August 2026 · source ↗
Sources
Generated September 24, 2026