⚠ The Tax Took More Than the Shareholders DidHigh threat

KGHM Polska Miedź (KGH) — threat to the moat

4 693 million złoty of minerals extraction tax in 2025, against 1 946 million of parent net profit.

In 2025 KGHM Polska Miedz S.A. paid 4 693 million złoty in minerals extraction tax and earned 1 946 million złoty of net profit1. The state's charge on production was two and a half times what was left for the owners of the company.

The minerals extraction tax against what it left (zl m)3 496Tax, 2023-3 691Group loss, 20234 693Tax, 20251 946Parent profit, 2025A levy charged on copper and silver produced and their prices, not on profit
It took billions from a company that earned nothing in 2023, and two and a half times the profit in 2025.

That is not an unusual year. The tax was 3 865 million złoty in 20242 and 3 496 million in 2023 — a year in which the group lost 3 691 million3. A levy that takes billions from a company making a loss is not a tax on profit in any ordinary sense; it is a charge on the copper and silver coming out of the ground, calculated from production volumes and metal prices, and it is owed whether or not anything is earned.

It also sits inside the cash cost. KGHM's C1 definition explicitly includes the minerals extraction tax4, which means Polish fiscal policy shows up in the number analysts use to rank KGHM against miners in Chile and Nevada — and it is part of why that number was 3,16 dollars a pound in 20255.

The mechanism is designed to capture exactly what a shareholder would otherwise capture. When copper and silver rise, the tax rises with them: it added 1 979 million złoty in the first half of 2026 on higher metal prices alone6, even though the coefficient had just been reduced.

There is genuine relief in progress. The coefficient is cut for 2026 to 2028 and a capital-expenditure deduction arrives in 20297, and the same parliament that reduced it can restore it.

The number that tests this threat is the ratio of minerals extraction tax to profit before tax. Until it is comfortably below one, the largest single claimant on KGHM's copper is not the people who own the mine.

The number that tests this threat
Reported
Minerals extraction tax against profit
4 693m zł of tax against 1 946m zł of parent net profit

The tax is charged on copper and silver produced and their prices, not on profit, which is why it took 3 496 million złoty in 2023 - a year the group lost 3 691 million. It also sits inside the C1 cash cost, so Polish fiscal policy shows up in the number used to rank KGHM against miners in Chile and Nevada. The coefficient is reduced for 2026-2028 and a capital-expenditure deduction arrives in 2029; the same parliament can restore it. Watch the ratio of tax to pre-tax profit.

Source: KGHM Group consolidated financial statements for 2025 ↗
References
  1. Reportedpaid 4 693 million złoty in minerals extraction tax and earned 1 946 million złoty of net profit.
    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 ↗
  2. ReportedThe tax was 3 865 million złoty in 2024 and 3 496 million in 2023 — a year in which the group lost 3 691 million.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in 2024, which carries the 2023 comparatives (minerals extraction tax of 3 496m złoty in 2023 against a group loss of 3 691m for that year, parent silver revenue of 4 389m, and parent employee benefits expense of 5 475m) — FY2023-FY2024 · publ. March 2025 · source ↗
  3. ReportedThe tax was 3 865 million złoty in 2024 and 3 496 million in 2023 — a year in which the group lost 3 691 million.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in 2024, which carries the 2023 comparatives (minerals extraction tax of 3 496m złoty in 2023 against a group loss of 3 691m for that year, parent silver revenue of 4 389m, and parent employee benefits expense of 5 475m) — FY2023-FY2024 · publ. March 2025 · source ↗
  4. ReportedKGHM's C1 definition explicitly includes the minerals extraction tax, which means Polish fiscal policy shows up in the number analysts use to rank KGHM against miners in Chile and Nevada — and it is part of why that number was 3,16 dollars...
    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. ReportedKGHM's C1 definition explicitly includes the minerals extraction tax, which means Polish fiscal policy shows up in the number analysts use to rank KGHM against miners in Chile and Nevada — and it is part of why that number was 3,16 dollars...
    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 ↗
  6. ReportedWhen copper and silver rise, the tax rises with them: it added 1 979 million złoty in the first half of 2026 on higher metal prices alone, even though the coefficient had just been reduced.
    KGHM Polska Miedz S.A. Group - Management Board's report on activities in the first half of 2026, financial results (revenue of 24 711m złoty up 40,8%, profit for the period of 5 579m against 580m, adjusted EBITDA of 9 198m up 89,1%, capital expenditure of 1 663m, net debt down 13,5% to 4 691m, equity of 39 814m, available financing of 16 978m, and the 1 979m złoty increase in the minerals extraction tax on higher copper and silver prices) — H1 2026 · publ. August 2026 · source ↗
  7. ReportedThe coefficient is cut for 2026 to 2028 and a capital-expenditure deduction arrives in 2029, and the same parliament that reduced it can restore it.
    KGHM Polska Miedz S.A. Group condensed consolidated financial statements for the first half of 2026 (the note stating that revenues from no single contractor exceeded 10% of group sales, the geographical breakdown by end-customer location totalling 21 927m złoty with Poland at 4 845m and Germany at 2 815m, parent revenue of 14 430m from copper and 5 843m from silver, the amending act on the minerals extraction tax in force from 1 January 2026, the group structure and equity accounting of Sierra Gorda, and derivative counterparty concentration) — H1 2026 · publ. August 2026 · source ↗
Sources
Generated September 24, 2026