(Adds more detail, background)
WARSAW, July 11 Europe's No.2 copper producer
KGHM has signed a five-year revolving credit deal worth
$2.5 billion with a group of international and local lenders to
finance mining projects and facility upgrades, it said on
The Polish state-controlled miner said the credit would also
be used to refinance the $700 million debt of KGHM International
- the subsidiary controlling its foreign assets.
Warsaw-listed KGHM, which has a market value of $8.1
billion, said that the loan may be drawn in up to 25 renewable
tranches and that it secured a possibility of two one-year
extensions at its request.
For a company statement listing its lenders click here
The news of the credit deal confirms a Reuters report from
Lower global copper prices at the end of 2013 and
for much of this year have weighed on KGHM's profitability.
Analysts polled by Reuters expected KGHM to book a net
income of 2.26 billion zlotys ($742.7 million) this year, its
lowest since 2004.
The miner, almost debt-free before the deal, added it was in
talks with the European Investment Bank (EIB) on another loan.
It reiterated that the ceiling for its debt levels was
double its annual earnings before interest tax, depreciation and
amortisation (EBITDA). The company posted EBITDA of almost 5
billion zlotys last year.
KGHM is about to launch production at its Chilean copper
project in Sierra Gorda, one of the world's largest copper
projects. Earlier this year, it said that Sierra Gorda's costs
may exceed $4 billion.
The miner, which is also the world's largest silver
producer, has other projects in Germany, Canada, and the United
However it said that 60 percent of the credit facility
signed on Friday would be used for projects in Poland.
Its investment plans, pegged at 4.3 billion this year alone,
include smelter upgrades and other projects aimed at cutting its
($1 = 3.0430 Polish Zlotys)
(Reporting by Adrian Krajewski; Editing by Christian Lowe and