Everyone who follows KGHM knows it is a copper company. The silver story is less well known but growing in investor consciousness. What is almost entirely invisible to the investment community is that the Glogow smelter also produces gold bars at 99.95% purity, technical selenium, and is positioned to recover tellurium at scale when demand economics justify it. Gold, selenium, and tellurium are all on the EU critical minerals list. KGHM produces all three from the same ore body at zero marginal cost above the copper production already underway.
The Glogow Copper Smelter and Refinery in Lower Silesia is KGHM's primary processing facility and one of the most productive copper smelters in Europe. It processes copper concentrate produced from KGHM's three underground mines at Lubin, Rudna, and Polkowice-Sieroszowice, using flash smelting technology to convert copper ore into blister copper at approximately 98.5% purity, then refining it through electrolytic processes to produce cathode copper at 99.99% purity. The Glogow Copper Smelter in Poland produces the highest quality cathode copper, lead, precious metals including silver and gold, and selenium.
The electrolytic refining process that produces copper cathodes generates a residue called anode slime. This slime accumulates at the bottom of the electrolytic cells during the copper refining process and contains the trace elements that were present in the original copper ore but that do not dissolve into the electrolyte solution during copper refining. KGHM's anode slime is exceptionally rich in precious metals and critical minerals because the Kupferschiefer ore formation in Lower Silesia naturally concentrates silver, gold, selenium, and tellurium alongside its primary copper content. The anode slime from Glogow is the input to KGHM's Precious Metals Division, which produces the silver bars, gold bars, selenium, and other trace elements that most investors in KGHM have never heard of. The resulting anode slime is used as a feed in the production of precious metals.
Tellurium is one of the most strategically sensitive critical minerals in the global supply chain. More than 90% of tellurium has been produced from anode slimes as a byproduct of electrolytic copper refining, and the remainder was derived from skimmings at lead refineries and from flue dusts and gases generated during the smelting of bismuth, copper, and lead-zinc ores. KGHM operates one of Europe's largest electrolytic copper refining operations, producing anode slimes that are processed for silver and gold recovery. Those same slimes contain tellurium.
Tellurium is on both the EU Critical Raw Materials list and the US USGS critical minerals list. Its most important industrial application is in cadmium telluride thin-film solar panels, used by First Solar, the largest solar panel manufacturer in the United States. First Solar's entire business model depends on a reliable tellurium supply, and it has historically been one of the world's largest tellurium consumers. Tellurium is also used in thermoelectric devices for cooling and power generation, in infrared optical materials for defence and imaging applications, and as an alloying additive in steel and copper to improve machinability. The defence applications include mercury-cadmium-telluride used in heat-seeking missile infrared sensors, which is why the US Department of Defense supported its continued inclusion on the critical minerals list.
The precise volume of tellurium in KGHM's anode slimes is not publicly disclosed in the company's standard quarterly reporting. What can be stated with confidence is that the Kupferschiefer ore formation in Lower Silesia, which has one of the highest natural concentrations of precious metals and trace elements of any copper ore body in Europe, contains tellurium alongside its copper, silver, gold, and selenium content. Whether KGHM is currently recovering tellurium from its anode slimes at commercial scale, or whether tellurium is present in the slimes but not yet extracted for commercial sale, is a question that the company's detailed technical disclosures do not answer explicitly. The chemistry is clear: if tellurium is in the Kupferschiefer ore body at grade, it ends up in the anode slimes at Glogow. Whether it is then recovered or discarded depends on the economics of the recovery process relative to the tellurium market price and the incremental processing cost.
The sequence at Glogow runs as follows. Copper ore from the three Lower Silesian mines arrives at Glogow as concentrate. Flash smelting converts it to blister copper at 98.5% purity. Electrolytic refining dissolves the blister copper anodes into an electrolyte bath, depositing pure copper cathodes at 99.99% on the cathode plates. All the trace elements that were in the blister copper but that do not dissolve into the copper electrolyte accumulate at the bottom of the electrolytic cells as anode slime. This slime is then processed by the Precious Metals Division, which leaches out the silver and refines it to 99.99% purity in bar form. During the electrolytic silver refining that follows, gold concentrates in a further slime layer from which the 99.95% gold bars are recovered. Selenium, and potentially tellurium, are recovered at various stages of this precious metals processing sequence. The entire chain adds significant commercial value to what would otherwise be waste material from the copper refining process, at marginal cost that is close to zero relative to the copper operation driving the whole sequence.
The strategic significance of KGHM's multi-metal output profile has increased materially over the past two years. The EU Critical Raw Materials Act, which entered into force in 2024, established specific benchmarks for domestic production, processing, and recycling of critical minerals across the Union, including selenium and tellurium. The EU's stated goal is to produce at least 10% of its annual consumption of each critical raw material domestically by 2030. KGHM's production of selenium and its potential tellurium recovery capability at Glogow represent exactly the kind of European domestic critical minerals production the CRMA is designed to incentivise.
In April 2025, gold reached a historic record of more than USD 3,400 per ounce. Following gold's lead, silver appreciated in value, mainly thanks to a more favourable currency environment and to greater interest amongst speculators. KGHM's precious metals revenue line responded directly: C1 cost for the Group in Q3 2025 amounted to 2.57 USD/lb and was approximately 6% lower than in the corresponding period of 2024, mainly thanks to higher gold and silver prices which offset cash costs of copper production. This is the by-product economics mechanism working precisely as described: higher precious metal prices reduce KGHM's net copper production cost because the gold and silver revenues offset the base operating costs, making the copper itself cheaper to produce on a cash cost basis.
Gold at USD 3,400 per ounce, with 160,000 troy ounces of precious metals production in 2025, implies a precious metals revenue contribution that dwarfs what the 3.7% revenue share figure suggests when prices were lower. At USD 3,400 per ounce, 160,000 troy ounces would generate approximately USD 544 million in revenue at essentially zero marginal cost above the copper and silver operations already running. That figure is larger than the entire annual revenues of many small-cap mining companies listed on European exchanges. It sits inside a company that the market classifies, prices, and discusses exclusively as a copper producer.
| Metal / Product | 2025 Production | Revenue Share | Market Classification |
|---|---|---|---|
| Copper (cathode + concentrate) | 710,000 tonnes payable | 70.3% | Primary product · LME grade A · SHFE registered |
| Silver (bars + granules) | 1,347 tonnes | 14.0% | World No. 2 · LBMA Good Delivery · COMEX |
| Gold (bars 99.95%) | 160,000 troy oz (precious metals total) | 3.7% | Recovered from silver refining slime · bars sold to institutions |
| Services | Various | 4.8% | Processing and logistics services |
| Steel | Various | 1.1% | KGHM Metraco steel subsidiary |
| Lead | Various | 0.8% | By-product of smelting |
| Molybdenum | 5.2 million lbs | Growing | By-product of Sierra Gorda copper-moly ore |
| Selenium | Not separately disclosed | Not separately disclosed | Technical selenium from anode slimes · EU critical mineral |
| Tellurium | Not separately disclosed | Not separately disclosed | Potential recovery from anode slimes · US and EU critical mineral |
The table above reveals the full picture of what KGHM produces from its Lower Silesian ore body and the Glogow refinery. The copper at 70.3% is what everyone knows. The silver at 14% is the hidden asset that Fides Polonia's earlier piece explored in detail. The gold at 3.7%, generating potentially USD 500 million or more in annual revenue at current prices, is essentially invisible in standard KGHM investment commentary. Selenium production is confirmed by KGHM's own corporate website but the volume is not broken out. Tellurium recovery potential exists by virtue of the ore body chemistry and the refining process in place. Molybdenum, produced at Sierra Gorda in Chile, generated 5.2 million pounds in 2025, a 53% increase year on year as ore grades improved. KGHM is simultaneously a copper company, a silver company, a gold company, a selenium producer, a molybdenum producer, and a potential tellurium producer. The market prices it as a copper company.
The investment case for KGHM has been well-stated in isolation for each of its major products. The copper case is the most covered. The silver case, which Fides Polonia argued in detail in a previous piece, is the most underappreciated. The gold case is the most invisible. At 160,000 troy ounces per year and gold prices that have been above USD 2,000 per ounce since 2023 and above USD 3,000 in 2025, KGHM's gold production generates hundreds of millions of dollars in annual revenue from a refining process that is running anyway for silver, from an ore body that was mined anyway for copper. The incremental cost of recovering that gold is essentially the processing cost of the anode slimes, which would be processed for silver regardless.
The selenium and tellurium dimensions add a different kind of value proposition that is harder to quantify but increasingly important in a European policy environment that is actively trying to build domestic critical mineral supply chains. The EU Critical Raw Materials Act gives KGHM's selenium and potential tellurium production regulatory tailwinds that did not exist two years ago. European industrial buyers of selenium for glass, photovoltaics, and electronics have a policy incentive to source from European producers rather than from the Asian copper refiners that currently dominate the selenium market. KGHM is a European selenium producer operating from one of the largest copper refining complexes on the continent.
The question for investors is whether any of this registers in how KGHM is valued. The answer, currently, is no. KGHM trades at copper company multiples with copper company analyst coverage from copper market specialists who report on copper volumes, copper prices, and copper C1 costs. The gold, silver, selenium, and critical mineral dimensions are noted in passing and then set aside. That disconnect between the full complexity of what the Glogow refinery actually produces and the simplicity of how the market prices KGHM is the investment observation that Fides Polonia continues to find most interesting about this company.
This article is produced by Fides Polonia Capital Management for informational and educational purposes only. It does not constitute investment advice or a recommendation to buy or sell any security. KGHM Polska Miedz SA (WSE: KGH) is a publicly listed company on the Warsaw Stock Exchange. Production data sourced from KGHM official corporate website, KGHM quarterly production releases, and KGHM half-year and full-year results presentations as cited. Critical minerals classification sourced from USGS Mineral Commodity Summaries 2024 and 2025, EU Critical Raw Materials Act 2024, and USGS Critical Minerals List 2025 as cited. Fides Polonia Capital Management may hold or consider holding positions in KGHM Polska Miedz SA. Nothing in this article should be relied upon as the sole basis for any investment decision. Always conduct independent due diligence and consult a qualified, regulated financial adviser before making any investment.