Cecilia Jamasmie | February 21, 2024 |
Cobre Panama mine was First Quantum Minerals’ largest copper operation. (Image courtesy of Cobre Panama.)
First Quantum Minerals (TSX: FM) said on Wednesday it would get a $500 million injection from Jiangxi Copper, the Canadian miner’s largest shareholder, that will help it to shore up finances.
The three year prepay arrangement with Jiangxi will see First Quantum deliver 50,000 tonnes of copper anode per year to the Chinese miner. The material will be extracted at the Kansanshi mine in Zambia and is payable at market prices, the company said.
“This arrangement is a reminder of the strategic nature of copper as supply challenges abound across the sector, First Quantum said in a statement. “Constructive discussions with our lenders for an amendment and extension of our loan facilities, which are an important component to our fulsome solution, are well-advanced and there is a high degree of alignment among all parties.”
The company, which was forced to shut down in December its flagship copper mine in Panama, has quickly seen its financial situation deteriorate. Its exposure to nickel, of which prices have dropped to two-year lows, has added extra pressure.
Together with reporting a net loss for the fourth quarter, First Quantum recorded an impairment charge of $900 million, which includes $854 million at its Ravensthorpe nickel mine, due to significant margin pressure triggered by the battery metal’s weak prices and high operating costs.
First Quantum has billions of dollars of debt maturing in the coming years and concerns about the future of Cobre Panama, its main source of income, has put it at risk of a covenant breach in the coming year. This has resulted in “material uncertainty” that may cast doubt on the company’s “ability to continue,” the miner said.
The Vancouver-based company is in talks with lenders to amend and extend its loan facilities, and expects a conclusion “in the near term.”
First Quantum holds out hope the May Presidential elections in Panama may bring a change in fortune for its halted operation, one of the world’s largest new copper mines to open in the past decade
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First Quantum holds out hope the upcoming Presidential elections in Panama will bring a change in fortune for its copper mine. (Image provided by First Quantum.)
First Quantum is also considering a minority investment from strategic investors in its Zambian business, and is running a sales process for its small Las Cruces mine in Spain, chief executive Tristan Pascall said in a Wednesday call conference to discuss fourth quarter results.
The company is the sole owner of the Sentinel copper mine and has a 80% stake in the Kansanshi mine. Its presence in Zambia, Africa’s second-largest copper producer, includes the Fishtie copper project, near the border with the Democratic Republic of Congo. It also comprises two licence options through a deal with African Pioneer
First Quantum is also considering a minority investment from strategic investors in its Zambian business, and is running a sales process for its small Las Cruces mine in Spain, chief executive Tristan Pascall said in a Wednesday call conference to discuss fourth quarter results.
The company is the sole owner of the Sentinel copper mine and has a 80% stake in the Kansanshi mine. Its presence in Zambia, Africa’s second-largest copper producer, includes the Fishtie copper project, near the border with the Democratic Republic of Congo. It also comprises two licence options through a deal with African Pioneer
(LON: AFP).
First Quantum re-shuffles management at Zambian operation
Reuters | February 20, 2024 |
The Sentinel open-pit copper mine. (Image courtesy of First Quantum Minerals.)
First Quantum Minerals Ltd (FQM) is re-shuffling top-tier personnel at its Zambian operations in a bid to tackle production and safety shortfalls in the South African country, an internal memo seen by Reuters showed.
The latest action comes as the company continues to deal with fallout from the sudden closure order of its flagship Panama mine late last year. FQM has lost more than half its market value since public protests against the Cobre Panama project started in October.
“Whilst we recognize the solid efforts of the teams at both Sentinel and Kansanshi, the last two production years at our Zambian operations have fallen short of our overall expectations in terms of safety and production,” said an email sent by chief operating officer Rudi Badenhorst to the employees of the Kansanshi mine last week.
With the impact of the suspension of operations at Cobre Panama towards the end of last year, the memo said, “we recognise our need to reinvigorate our commitments to deliver on our investments in Zambia.”
Meiring Burger, who was part of First Quantum’s group mining team was promoted to general manager of Kansanshi mine, while Axel Kottgen who led the Enterprise nickel project in Zambia was promoted to assistant general manager “to achieve target outcomes at Kansanshi,” the note said.
Anthony Mukutuma, will lead external relations in Zambia to work on government and political strategy, the note added.
First Quantum did not immediately respond to a Reuters request for comment.
First Quantum suffered a major blow in Panama last November when the Panama government asked it to shut down one of the world’s biggest copper mines, accounting for 40% of the company’s revenues.
First Quantum exercises option over two licences as it looks to expand in Zambia
Earlier this year, FQM said it would move ahead with planned investments in Zambia even as the company cut production guidance.
The two Zambian mines, Sentinel and Kansanshi, generated $943 million in revenue for the quarter ending September 2023 and an operating profit of $210 million, company filings showed. In 2023 two contract workers died at the company’s Zambian mines in separate incidents.
Total copper production at Zambia in 2023 was 349kt, 10% lower than in 2022, due to a combination of lower throughput at both sites and lower grades at Kansanshi, the company said in a statement on Jan. 15.
First Quantum said in January that it was exploring the sale of smaller mines and stakes in its larger mining assets.
Fitch ratings agency has warned that permanent closure of First Quantum’s Panama mine could hurt the company’s borrowing capacity.
(By Divya Rajagopal; Editing by Veronica Brown and Susan Fenton)
Related Article: KoBold Metals expands Zambia footprint with Midnight Sun deal
Reuters | February 20, 2024 |
The Sentinel open-pit copper mine. (Image courtesy of First Quantum Minerals.)
First Quantum Minerals Ltd (FQM) is re-shuffling top-tier personnel at its Zambian operations in a bid to tackle production and safety shortfalls in the South African country, an internal memo seen by Reuters showed.
The latest action comes as the company continues to deal with fallout from the sudden closure order of its flagship Panama mine late last year. FQM has lost more than half its market value since public protests against the Cobre Panama project started in October.
“Whilst we recognize the solid efforts of the teams at both Sentinel and Kansanshi, the last two production years at our Zambian operations have fallen short of our overall expectations in terms of safety and production,” said an email sent by chief operating officer Rudi Badenhorst to the employees of the Kansanshi mine last week.
With the impact of the suspension of operations at Cobre Panama towards the end of last year, the memo said, “we recognise our need to reinvigorate our commitments to deliver on our investments in Zambia.”
Meiring Burger, who was part of First Quantum’s group mining team was promoted to general manager of Kansanshi mine, while Axel Kottgen who led the Enterprise nickel project in Zambia was promoted to assistant general manager “to achieve target outcomes at Kansanshi,” the note said.
Anthony Mukutuma, will lead external relations in Zambia to work on government and political strategy, the note added.
First Quantum did not immediately respond to a Reuters request for comment.
First Quantum suffered a major blow in Panama last November when the Panama government asked it to shut down one of the world’s biggest copper mines, accounting for 40% of the company’s revenues.
First Quantum exercises option over two licences as it looks to expand in Zambia
Earlier this year, FQM said it would move ahead with planned investments in Zambia even as the company cut production guidance.
The two Zambian mines, Sentinel and Kansanshi, generated $943 million in revenue for the quarter ending September 2023 and an operating profit of $210 million, company filings showed. In 2023 two contract workers died at the company’s Zambian mines in separate incidents.
Total copper production at Zambia in 2023 was 349kt, 10% lower than in 2022, due to a combination of lower throughput at both sites and lower grades at Kansanshi, the company said in a statement on Jan. 15.
First Quantum said in January that it was exploring the sale of smaller mines and stakes in its larger mining assets.
Fitch ratings agency has warned that permanent closure of First Quantum’s Panama mine could hurt the company’s borrowing capacity.
(By Divya Rajagopal; Editing by Veronica Brown and Susan Fenton)
Related Article: KoBold Metals expands Zambia footprint with Midnight Sun deal
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