Asian giant said that selling is 45% holding in the mine was one of the routes to be explored with its financial and legal advisors, RBC Capital Markets and Sullivan & Cromwell LLP. KGHM, Europe’s second-largest producer of the red metal, said in turn it was not interested in increasing its stake in the money losing operation. State-controlled company has been criticized for the steep investment allocated to developing the Chilean mine ($5.2 billion and counting). Sierra Gorda, which began production in 2014, has constantly failed to meet expectations due to challenging metallurgy and difficulties in using seawater for processing.
One the world’s largest silver producers, had planned to expand Sierra Gorda earlier, but the 2015-2016 rout in commodity prices forced the company to place the project in the backburner. Two years later, KGHM secured environmental approval for a $2 billion expansion and upgrade of the mine in order to extend its productive life by 21 years. There also are options to expand production by building an oxide circuit and doubling the throughput of the sulphide plant. Current planned output at Sierra Gorda sits at about 140,000 tonnes of ore per day, but the asset has only delivered 112,000 tonnes in its best year of operation to date.