Poland's KGHM urges cut in mining tax, eyes mine shut-down on low copper price

CRACOW, Poland, Nov 14 (Reuters) - Poland's KGHM KGH.WA ,
the second-largest copper producer in Europe, on Saturday called
for a cut in the domestic tax on miners and flagged a temporary
shutdown at one of its overseas mines as copper prices sit at
multi-year lows.
Shares in the state-run miner have fallen more than 25
percent this year as concern about growth in China, which
consumes half of global copper output, have pushed copper
CMCU3 prices below $5,000 a tonne, a level which KGHM says
begins to hurt its profits.
Poland implemented a mining tax in 2012. KGHM expects to pay
around 1.4 billion zlotys ($355 million) worth of mining levies
this year, equal to around 58 percent of the company's 2014 net
profit. The incoming conservative government formed by the Law
and Justice (PiS) party promised to scrap the tax during the
election campaign but has not elaborated on the issue since.
"The levy ... is something natural, but with the current
price levels it should be calculated so that it equalled 60
percent of the sum KGHM is currently paying," KGHM chief
executive Herbert Wirth told Reuters.
The group has said a weaker zloty helped limit the impact of
falling copper prices, which are denominated in dollars, at its
Polish mines.
But it also cut 2015 production targets for Sierra Gorda
mine in Chile, its main overseas mine, and flagged lower
spending and write-downs in the value of its foreign mining
assets.
"We are now analysing the situation in all our mines and we
see that it is especially hard where we account in dollars,"
Wirth said.
"That's why at our Robinson mine in the U.S. we have
implemented an urgent programme to cut costs by 20 percent. But
it may also prove necessary to shut down mining there for a year
or two until copper prices rebound."
Robinson is an open-pit mine in Nevada, producing copper,
gold and molybdenum.
($1 = 3.9430 zlotys)