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What goes in Poland on 19th of April.
KGHM to pay less in Chile
KGHM’s most important foreign investment, the Sierra Gorda mine in Chile, has been breaking records in production and processing capacity in recent years. Today, Deputy Prime Minister and Minister of State Assets (MAP) Jacek Sasin visited Chile to discuss, among other things, the future of KGHM’s Sierra Gorda copper mine. The purpose of the visit is also to gauge whether the announced nationalization of the copper industry in this country will actually happen.
Deputy Prime Minister Jacek Sasin and the Minister of Finance of Chile talked about investments in mining. The Chilean government wants to change the mining tax law, the so-called Royalty Minero.
“When it comes to investments in Sierra Gorda, much depends on the external environment, so we are talking with representatives of the Chilean government and Parliament about how the changes in the law will affect the work of the mine and our plans,” said Deputy Prime Minister Jacek Sasin.
MAP said that the original draft of the bill provided for a radical increase to 3 percent of the mining tax on copper produced (i.e. on revenue, without the company cost). Experts said it could have a negative impact on the entire mining industry.
The current project is less strict and involves hybrid taxation: 1 percent of the value of copper sales and taxation of operating profit (i.e. after deducting the company’s costs). Another important issue is to clarify how the new law will regulate the possibility of deducting losses by the company, changes in the labor code (consisting in an hourly reduction of the working week) and the way employees are paid.
“We have received assurances from the minister of Finance in Chile that our requests will be taken into account and new proposals will be announced soon. An upper tax limit will be introduced, especially for companies such as the Sierra Gorda mine, which has a low copper content in the aggregate. The total amount of taxes will not exceed 50 percent of profits,” said Deputy Prime Minister Jacek Sasin after a meeting with the Minister of Finance of Chile Mario Marcel. He called it a “very important declaration.”
According to the MAP, KGHM wants to expand its business in Chile, planning the construction of a fourth production line, which aims to increase the plant’s processing capacity to 160 thousand tons per day. The investment will contribute to the development of the company and increase employment in the region.
The Sierra Gorda mine is located in the Atacama Desert, in the Antofagasta region, at an altitude of approx. 1700 meters above sea level. The mine operates on a copper-molybdenum deposit, which includes sulfide and oxide copper ores. KGHM has 55% shares. The remainder is owned by the Australian mining group South32.
Gov.pl/Jacek Perzyński
The CEO of PGE wants security to be included in the EU EMD
On March 14, the European Commission published a proposal to reform the electricity market, the so-called Electricity Market Design (EMD). It is a response to the high energy costs caused by the drastic increase in gas prices after Russian energy blackmail and the invasion of Ukraine. The regulations are designed to protect consumers from rising energy prices in the 2023/24 season. Polska Grupa Energetyczna, as a producer and supplier of electricity in Poland, has called on the decision makers to include security in the new regulations.
“The reform of the EU energy market should not only take into account the achievement of ambitious climate goals, but above all consider energy security to the greatest extent possible. We expect these changes to improve the regulatory environment that supports a fair energy transition, taking into account the capabilities and specificities of individual EU markets. We stand on the position that we must build Europe’s energy security on the basis of the energy security of individual member states,” PGE stated.
“We welcome many of the European Commission’s ideas contained in the reform proposal and the fact that the Commission has decided against changing the basic principles of the functioning of the electricity market, including the way prices are set on wholesale markets – it should be remembered that the increase in prices on these markets was not the result of them being faulty, but stemmed from the <Russian energy blackmail>,” the company explained.
“We support the two types of long-term energy supply contracts (PPAs) and contracts for difference (CFDs) promoted by the EC. However, we call for them not to be turned into a regulated, mandatory instrument in the course of the work of the European Parliament, as this would significantly limit investments in the green transition. We want bilateral contracts for difference to reflect changes in the macroeconomic environment, including an increase in the cost of implementing investments, which is often higher than the inflation rate. In addition, unlike the European Commission, we believe that the revenues from these contracts should serve long-term solutions, such as the expansion of electricity networks and energy storage, and not just support consumers. We also support the development of PPA markets, but trading companies should be free to hedge their portfolios,” the company said.
“We hope that work on the reform will be completed later this year. We will strongly strive to ensure that possible changes and proposals in the European Parliament follow the direction expected by us and our customers,” said Wojciech Dąbrowski, President of the Management Board of PGE.
Polska Grupa Energetyczna / Jacek Perzyński
Poles end atom consultations with Germany, but wait for a signature
Poland provided all information about the plan to build a nuclear power plant in Pomerania to Germany during cross-border consultations required by law. This is another consultation in a cycle. They will end once the protocol written after the final arrangements have been made, is signed.
“Poland has provided Germany with all possible explanations regarding the construction and operation of the nuclear power plant in the Pomeranian Voivodeship. During the meeting organized by the Director General of Environmental Protection, Polish experts exhaustively addressed the issues raised by representatives of the government of the Federal Republic of Germany,” the Polish government said.
“During the meeting organized at the request of Germany, Polish experts answered exhaustively questions about the construction of the first nuclear power plant in Poland, while presenting detailed data and analyses results. After all the information had been provided, Andrzej Szweda-Lewandowski, the Director-General of Environmental Protection, who was leading the meeting, asked whether all the issues had been fully clarified and whether the representatives of the German government had any additional questions. In response, the chairman of the German delegation, Uwe Feller from the Ministry of Climate Protection, Agriculture, Rural Affairs and the Environment of Mecklenburg-Vorpommern, stated that the delegation had no more questions and thanked for the answers.
The meetings organized by the Director General are required by the environmental regulations of the Espoo convention. They are necessary for issuing an environmental decision in the course of preparations for the construction of a nuclear power plant in Pomerania.
The talks with Germany follow similar talks with the Czech Republic, Estonia, Finland, the Netherlands, Latvia and Hungary. “Consultations with Germany will be completed upon the signing of the protocol, the preliminary scope of which has already been agreed,” the Polish government said in a statement. “After reviewing the project documentation submitted by Poland in September 2022 (Espoo report), the Germans sent a number of questions to Warsaw. They were carefully analyzed by the Polish side, and then comprehensive explanations were given – first in writing (with annexes with graphs/pictures), and then, at the request of Germany, at a bilateral meeting, during which experts from the General Directorate of Environmental Protection, the Ministry of Climate and Environment, the State Atomic Energy Agency and, above all, the investor – Polish Nuclear Power Plants – answered the submitted and additionally asked questions from the German side.
The Polish Nuclear Power Program provides for the construction of the first reactor in 2033 and 6-9 GW by 2043. The first power plant is to be built at the Lubiatowo-Kopalino location in Pomerania using the AP1000 technology from the American Westinghouse.
GDOŚ / Wojciech Jakóbik
