Following the announcement of a reduction in copper tax, the share price of KGHM joined the upward trend on WIG-20, boosting investor optimism.
A conference at the Warsaw Stock Exchange with the participation of the prime minister and the finance minister discussing the economic strategy of the Polish government for the upcoming years delivered several significant pieces of information for investors. The two most crucial from the perspective of individual investors were announcements about increasing the limit of Individual Retirement Security Accounts (IKZE) from 2026, and the finance minister did not specify the exact amounts. Moves towards improvement of retirement account conditions are a positive signal, considering the development of the Polish capital market.
A similar effect could be the announcement of reducing the capital gains tax (aka Belka tax). Although the government did not announce the exact tasks’ scope, the reduction in this tax should provide an additional incentive to invest in the capital market, thus increasing the liquidity of the public market.
KGHM benefitted the most from the government’s statements as the finance minister announced a reduction in the so-called copper tax from 2026. The revenue from the copper tax is expected to be PLN 500 million lower in 2026 and PLN 700 million lower in the following year. The market reacted immediately to this announcement with a 7% increase in the share price.
“Such growth after one piece of information is abnormal. We have witnessed a very solid increase, particularly considering that it involved a company from WIG-20 and that the Warsaw Stock Exchange experiences larger price fluctuations than stock exchanges in developed countries,” says Tymoteusz Turski, stock market analyst at XTB, in an interview with MarketNews24.
In the 30-day period, the minimum share price was at PLN 120, and the maximum was at PLN 144, and a few days after the government conference, it was PLN 8 lower.
The copper tax in KGHM amounts to 40-50% of EBITDA, which is an exceptionally high burden compared to comparable companies. In 2023, KGHM paid PLN 3.5 billion from this tax, and since its introduction, the tax amount exceeded PLN 27.3 billion.
In recent years, KGHM allocated PLN 4-4.5 billion annually for investments, and these expenses could increase to about PLN 5-6 billion. In recent years, the group’s investment budgets only covered asset reconstruction and maintaining the extraction level in the medium-term perspective.
“Changes in the copper tax are all the more crucial for KGHM because the commodity’s average prices, which KGHM has limited influence on, determine this tax rate. However, it is essential from the company’s cost perspective and for its plans, as it should increase investment expenses,” explains an XTB expert.
We may already know KGHM’s new strategy by the end of the third quarter. The Group will likely focus more on development in Poland, but there may also be foreign projects. In its previous strategy, the group focused on investments in RES and SMR (small modular reactors). Given the energy-related problems associated with rising energy costs, the direction seems more apparent for KGHM.
Copper is on the list of critical raw materials in the EU, and there aren’t many deposits of this raw material in Europe. KGHM accounts for about half of its production in the EU.
Did the rise in KGHM’s share price trigger a rise in WIG-20? “This index has been in an upward trend since the beginning of 2025, so we can speak more of a synergy effect, i.e., the KGHM share price has joined this trend, and overall we see greater investor optimism regarding the Polish market,” comments T. Turski from XTB.
Source: https://managerplus.pl/kghm-na-fali-wzrostow-po-zapowiedzi-obnizki-podatku-miedziowego-57881
