Polish state-controlled KGHM Polska Miedz was the largest silver producer in the world in 2012, as well as the eighth-largest copper producer, according to mineral consulting firm Micon.

The audit was commissioned by KGHM itself in its drive to become a global mining giant. The company now has deposits in Chile, Canada, Greenland and the US. Its Polish mines are capable of producing at current levels for another 30 to 40 years, the report found.

KGHM's Polish, proven and probable reserves of copper and silver together as of December 21, 2011 were 1.18 billion metric tons, according to Micon.

The biggest obstacles for KGHM are a new tax imposed by the Polish government on mining copper and silver (which will amount to about 30 percent of future operating profit generated by the company in Poland, Micon reports), the fluctuating prices of metals and minerals, and the exchange rate of the złoty. Even with all that, KGHM's operations are expected to remain highly profitable.

KGHM's capital expenditure in Poland from 2012-2016 is likely to be in the range of $600 million, compared to an average of $400 million a year from 2007 to 2011.

Jacek Ciesnowski