KGHM announced that it will begin production at its Sierra Gorda gold mine in Chile, one of the world’s largest copper projects in the world, at a total cost of $4.16 billion.
“Today I can say that the cost of launching (production at Sierra Gorda) amounted to $4.156 billion,” KGHM Chief Executive Officer Herbert Wirth told a news conference.
The cost of getting production underway at Sierra Gorda has been over a third more than Poland’s KGHM expected when it bought the project as part a C$3 billion ($2.8 billion) purchase of Canada's Quadra FNX, now named KGHM International, Reuters reported.
That deal allowed it to book the world's fourth-largest copper deposits.
The state-controlled miner launched production at Sierra Gorda last week. Its target for annual production is 220 kt of copper, 25 million lbs of molybdenum and 64,000 oz of gold.
The Polish miner controls 55 percent of the Chilean project, while Japanese partner Sumitomo holds the rest.
To finance its investment plans, pegged at a company-wide total of 4.3 billion zlotys ($1.4 billion) this year alone, KGHM signed a five-year revolving credit deal worth $2.5 billion with a group of lenders earlier this month.