First Quantum drops plan to sell stakes in Zambia copper mines

me-metals: First Quantum Minerals Ltd. has shelved a plan to sell minority stakes in its Zambian copper mines, after a $1 billion gold-streaming deal eased balance sheet pressures.

According to me-metals cited from mining.com, Early last year, the company said it was considering offloading minority interests in its Kansanshi and Sentinel operations in Zambia, after it was forced to shut its flagship mine in Panama in late 2023. Chief executive officer Tristan Pascall said the deal this month to sell part of Kansanshi’s gold output to Royal Gold Inc. has helped change the need to divest.

“Whilst we’re definitely open to partnerships and we continue to look at that, we are not looking for a transaction in Zambia,” Pascall said in an Aug. 22 interview. “We’re not looking at the Zambian minority stakes’ sale.”

First Quantum had been in talks with companies including Japanese trading house Mitsui & Co. and Saudi Arabia’s state-backed Manara Minerals Investment Co. over acquiring a minority shareholding in the Zambian assets, Bloomberg News previously reported.

The gold streaming transaction was the biggest such deal globally in the last 10 years, according to RBC Capital Markets, which advised the firm. Together with debt refinancing and two copper prepayment agreements totaling $1 billion, that has shored up First Quantum’s balance sheet.

The Aug. 19 commissioning of a $1.25 billion expansion at the Kansanshi copper mine also means the Zambian operations will again positively contribute to cash flow, Pascall said.

As the $10 billion Cobre Panama mine is shuttered, First Quantum’s Zambian operations provided more than 90% of the firm’s output last year. They also account for more than half of the production in Africa’s second-biggest copper producer.

With the company’s net debt falling to about $4.5 billion, First Quantum has some breathing space as it engages with the Panamanian government on potentially restarting its mine in the country, the CEO said. The company’s shares have gained more than 50% since a low in early April.

Panama’s government in June allowed First Quantum to start exporting stockpiles of semi-processed copper concentrates from the operation. The timeline for a possible restart will be up to the government, said Pascall, who declined to comment on whether formal talks had started around resuming operations. That would be a matter for President Jose Raul Mulino to address, he added.

“We can be constructive, we can be patient,” Pascall said. “Very much we believe that will be led by government, led by the president in terms of their expectations for the timetable as we walk our way though.”

source: mining.com