First Quantum Considers Sale of Zambian Mines Amid Financial Strain
Canadian mining company First Quantum Minerals (TSX: FM) is reportedly exploring the sale of a stake in its Zambian copper mines to alleviate financial strain following the enforced closure of its major copper mine in Panama.
Rumors suggest that First Quantum Minerals (FM.TO) is in discussions with the Chinese state-owned Jiangxi Copper Corp regarding the potential sale of its Zambian copper assets to stabilize its financial standing. However, specifics of the deal are yet to be finalized, leaving the outcome uncertain.
The talks were initiated after First Quantum faced setbacks in Panama, where regulatory action led to the closure of one of the world’s largest copper mines. Fitch, a debt rating agency, cautioned that this closure could negatively impact First Quantum’s borrowing capacity.
Jiangxi Copper Corporation, First Quantum’s largest shareholder, has reportedly engaged in talks about potentially acquiring one of the Zambian mines or securing a stake in them.
First Quantum Minerals holds full ownership of the Sentinel copper mine and an 80% interest in the Kansanshi mine, both situated in Zambia.
Their foothold in Zambia extends to the Fishtie copper project near the Democratic Republic of Congo’s border, aiming to commence production by 2026 after years of exploration.
Rumors surrounding First Quantum’s future include potential acquisition bids, notably from Canadian miner Barrick Gold (TSX: ABX), (NYSE: GOLD), as Barrick Gold expands its presence in copper, targeting a production increase to 1 billion pounds by 2031.
Barrick Gold has already committed substantial funds for the Lumwana super pit expansion in Zambia and holds a stake in the Reko Diq mine in Pakistan.
First Quantum intends to update its plans for meeting debt obligations by the end of January, amidst ongoing speculation about its strategic moves and future financial undertakings.
