UPDATE 1-Poland's KGHM CEO flags lower dividend due to asset impairment

(Adds quotes, Sierra Gorda mine, political background)
LUBIN, Poland, Jan 18 (Reuters) - Poland's KGHM KGH.WA ,
Europe's second-biggest copper producer may have to cut its 2015
dividend if it has to write down the value of its assets as a
result of the copper rout, KGHM's chief executive said on
Monday.
Last month, KGHM said it would have to run an asset
impairment test because of continued low commodity prices.
Copper, used in power and construction, touched $4,318 CMCU3
on Friday, its lowest since May 2009, putting KGHM at a risk of
generating losses.
"I think the test's results will be known at the turn of
January and February. Depending on the outcome, I cannot rule
out that it could result in a proposal of a lower dividend from
2015," KGHM CEO Herbert Wirth told Reuters.
KGHM's strategy is to pay out up to one third of its annual
standalone net profit as a dividend. Last year the
state-controlled company paid out 800 million zlotys ($195.5
million) from net profit at 2.4 billion zlotys.
Chinese demand worries have weighed on the copper price,
which in turn ate into KGHM's profit. The rout also raised the
treasury's concerns about the value of KGHM's largest foreign
asset, the Sierra Gorda mine in Chile, which it co-owns with
Japan's Sumitomo 5713.T .
KGHM gained control of Sierra Gorda in 2011 when it bought
Canadian rival Quadra FNX for C$2.87 billion ($1.98 billion),
the largest ever foreign acquisition by a Polish company.
KGHM's CEO may lose his job in the coming weeks following a
wide reshuffle of management of Poland's state-run companies
after the Law and Justice (PiS) party won parliamentary
elections in October.
Local media reported earlier that Wirth could be replaced by
Krzysztof Skora, who had been KGHM's CEO in 2006, when PiS was
previously in power.