Polish copper miner KGHM and Sumitomo faces Chilean charges

Alleged environmental infractions have led to charges against Sierra Gorda, a Chilean copper mine owned jointly by Poland’s KGHM Polska Miedz and Japan’s Sumitomo Metal Mining.

The country’s environmental regulator, SMA, said the infractions could mean $29 million in fines and revocation of the mine’s licence.

Sierra Gorda is the largest foreign asset owned by Poland’s KGHM Polska Miedz, parent company of KGHM International and KGHM Ajax Mining Inc.

According to mining journals and Reuters, SMA reported serious to mild breaches, including failure to implement measures to control emissions, altering natural habitat for native wildlife and operating a tailings dam in unauthorized fashion.

Sierra Gorda has 10 days to submit a compliance plan and 15 days to mount a legal defence. The mine has said it is preparing to address the charges.

Earlier this year, Poland’s state treasury raised doubts about KGHM’s investment in Sierra Gorda and ordered the state-owned company to diversify. That was before the supervisory board at Polish KGHM, Europe’s second largest copper producer, dismissed CEO Herbert Wirth and three other members of the management board.