Canadian mining company First Quantum Minerals is in discussions to divest a stake in its copper mines in Zambia to one of its shareholders, Jiangxi Copper, Reuters reported.
In Zambia, First Quantum fully owns the Sentinel mine and holds an 80% stake in the Kansanshi mine, while the remaining 20% stake is held by the Zambian Government.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
These two Zambian mines are claimed to have generated $943m in revenue and $210m in operating profit in the third quarter of last year. It is estimated that these assets could be valued at nearly $6bn, based on their earnings.
Jiangxi Copper, First Quantum’s largest shareholder, could acquire either one of the mines or a portion of one, noted the news agency, citing a person privy to the development.
However, the details are not yet confirmed, and the possibility of a deal materialising is still uncertain, the news agency stated.
These talks with the Chinese state-owned enterprise began after First Quantum faced a setback in Panama, where it was ordered to halt operations at its Cobre Panama mine.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe company saw a substantial decline in market value, after losing around C$10.3bn since protests against its Cobre Panama mine began in late October.
The Panama mine contributed around 40% of the company’s revenues.
This incident has raised concerns about the potential impact on the borrowing capacity of First Quantum.
The company faces a maturing debt of $1.05bn early next year.
Previously, in 2019, First Quantum and Jiangxi engaged in similar negotiations concerning the Zambian mines, which resulted in Jiangxi acquiring a significant minority stake in First Quantum rather than in the mines themselves.
Presently, Jiangxi holds an 18.2% stake in First Quantum, and a standstill agreement is in place, preventing the Chinese company from increasing its stake beyond 20%.
Recently, Bloomberg reported that Barrick Gold is in talks with some of the key investors in First Quantum around a potential takeover.
The talks have not led to a clear indication of whether Barrick will make a bid.
