President Edgar Chagwa Lungu inspects the processing plant at First Quantum Minerals’ Sentinel Mine in Kalumbila.

Bloomberg reports that First Quantum Minerals Ltd. has offered to buy the Zambian government’s 20 percent stake in Africa’s biggest copper mine for as much as $700 million, according to two people familiar with the transaction.

Vancouver-based First Quantum already owns 80 percent of the Kansanshi mine in Zambia’s North-Western Province, while state-owned ZCCM Investments Holdings Plc holds the rest.

The proposal, which was submitted last year, includes $300 million to $400 million in cash, and an equal amount in special royalties, over more than 10 years, said the people, who asked not to be identified because they’re not authorized to comment.

First Quantum spokesman John Gladston declined to comment.

Amos Chanda, Zambian President Edgar Lungu’s spokesman, didn’t immediately respond to a call and message seeking comment, and neither did a spokeswoman for ZCCM-IH.

The deal would also include ZCCM-IH dropping a $1.4 billion legal claim against First Quantum over a loan the company received from Kansanshi, the people said.

The government is still considering the proposal, according to one of the people.

First Quantum and the government have been at loggerheads over other issues too.

The country’s revenue authority handed it a $7.9 billion tax bill last year, while an increase in royalties this year prompted First Quantum to announce plans to fire 2,500 workers.

The company has since backtracked on the proposal.

Kansanshi is First Quantum’s biggest mine, and accounted for more than half the company’s revenue in 2017.

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52 COMMENTS

  1. Am sure the PF guys are like take the money.
    But what of building on indeginous Zambians capacity by empowerment through the same 20%.
    Think twice ba PF, winning elections at all costs with that $700 million in your pocket will take the country backwards,first quantum will externalise the profits and all that will be left will be hugh empty holes, a polluted environment and displaced communities.
    For once edgar and co do the right thing for our childrens children.

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    • Lose the 20% and Quantum will become a worse bully than they are now!

      There is a reason why Quantum wants full control of Kansashi….it is their CASH COW, plain and simple. If Kansanshi mine alone accounts for more than half of Quantum’s revenue, this alone should tell misguided MINE ONWERS’ SYMPATHIZERS, like HH, that they are being used as USEFUL !D!OTS.

      Remember that HH, more than half of Quantum’s revenue comes from Zambia….. do you know how many billions of dollars that is? Our Govt raises mine taxes only a few percentage points and mines such as Quantum threaten all manner of catastrophies that will befall our Country. How can a business making losses year after year want to involve itself even more (100% shareholding) in a venture that continue to show negatives on…

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    • Continue….

      its balance sheets?This is proof that the story these people have been telling all along is a FREAKING LIE….and HH should take note and stop his corrosive politics even on issues that call for unity of purpose and speak with one voice as a Nation.

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    • Alá imwé Bafi Colour…. you think we are kids ka!

      We actually want you out! We want to get back at least 60 percent!!!

      Mwempefu mwé

      Idiiiot white baaaastards!!!

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    • With the debt situation and the greed of Lungu and friends, am sure they are itching to sell so that they can offeset some of the debt and facilitate for further plunder of our scant resources.
      But I hope they are divinely restrained from such a foolish thing. Never sell those shares

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    • We now know why Lungu fired Dr. Pius Kasolo last week as ZCCM-IH CEO. It is so that they could halt the $1.4-Billion legal case against First Quantum & then buy off Govt/ZCCM-IH shares in First Quantum.

      First Lungu tried to bully Dr. Kasolo from suing First Quantum KCM. Then he tried to secretly buy ZCCM-IH for himself for a joke-of-$100-million through an unknown Israeli shelf company called Sapir Capital, but Dr. Kasolo fought it off.
      Guys protect ZCCM-IH from Lungu & First Quantum. This Lungu of yours is a thief & corrupt.

      wwwDOTzambianobserverDOTcom/exclusive-unknown-israeli-company-behind-the-buying-of-govnt-satke-in-stake-in-zccm-ih-revealed/

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    • Bafikala, that’s why you brought in corrupt Eric and fired Dr. Pius Kasolo. This is not ZAFFICO, you will go faster than you come.

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    • Really laughable …sell our 20% for a mere $700 million and then drop a winnable claim for $1.4 Billion against them. They must think we are stupid then again knowing Lazy Lungu …he will go for it

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    • How can the chairman of ZCCM-IH be a lawyer of the same mining companies making offers?
      Why First Quantum is fighting ZCCM boss Kasolo
      4 July 2018 07:48
      In January 2018, Lusaka High Court judge Winnie Mwenda dismissed an application in which First Quantum Minerals Limited(FQM) and six others were seeking to dismiss a case where ZCCM-Investment Holdings (ZCCM-IH) sued them for fraud and recovery of funds involving over US$2.3 billion.
      ZCCM-IH cited FQM chairman and chief executive officer Philip Pascall, Directors Arthur Pascall, Clive Newall, Martin Rowley and Kansanshi Mining Plc.
      Lawyers Eric Silwamba , State House Aides and other have attempted to drop this case but ZCCM-IH and get kickbacks.
      But Chief Executive Officer Dr. Pius Kasolo want nothing short of recovery of the $2…

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    • … recovery of the $2.3billion.
      A mining engineer who worked and ran mines for Anglo-America in South Africa and Ghana, Kasolo has not been an easy nut to crack.l for the wheeler dealers at state House.
      But Kasolo’s tenure at ZCCM-IH maybe short-lived as government has appointed a friend and lawyer  Eric Silwamba as chairperson of this exploitative mine houses. It now means Silwamba is the boss of Dr Kasolo. How long will Dr Kasolo survive ?
      ZCCM-IH, which holds the country’s stake in foreign-run privatised mines, sued FQM in the High Court in November 2016 and simultaneously filed a Notice of Arbitration in London claiming the Vancouver-based company swindled it out of US$2.3 billion.
      ZCCM-IH had further accused FQM of defrauding it by using money from its Kansanshi Mining Plc as…

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    • … ZCCM-IH had further accused FQM of defrauding it by using money from its Kansanshi Mining Plc as cheap financing for its other operations as well as investing in multibillion dollar greenfield projects in Panama, without the Zambian state’s investment company’s consent.

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  2. DO NOT EVEN THINK of offloading GRZ’s 20% stake ,that’s a $700m windfall that Lungu’s reckless government is bound to waste.It shouldn’t happen.

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  3. Increase our shares to 49% and still collect the money on offer as windfall tax. We must not sale out our only resources

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    • Anybody who is not passionate about running ZCCM-IH as the Pilar of our diversification program should not be allowed anyway near the ZCCM-IH.
      — July 28, 2017
      “This is why we have embarked on a diversification program away from mining to include energy, cement production, forestry and agriculture, among other viable sectors,” Dr Kasolo said.

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  4. These mappets take us for fools. Who in their right thinking capacity will nod to this gibberish. Government sells 20% so that you can have a field day to oppress us you morons. In fact government should demand for more stake like 45% so that we take ownership for what is rightfully ours. They threatened us with job cuts following an increase in taxes and royalties but they have backtracked instead. This law suit should not be dropped and whoever gets a cut to drop it will be in hot soup in the future. US1.4 billion must be paid by FQM and the taxes that they have evaded over the years so that our reserves can be propped up. Why even run to the IMF when we have the money right here in Zambia? This is were we should show true leadership and not personal aggrandizement taking center stage…

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  5. continued Enough is enough. We have all the resources we need to develop this country and one wonders why we are always globe trotting with begging bowls all the time. FQM has realized that they are fighting a losing battle hence this maneuver. We will not be swayed by cheap offers devoid of sensible reasoning. These minerals belongs to us and in fact its high time we passed a law in parliament for government to increase its ownership in these mines. Tanzania and Botswana have done that, why cant we? This is not political so patriotism should be the driving force. Lets take back what belongs to us.

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  6. Badly rotten $700m deal that will further make Zambians economic slaves in their own land.That 20% GRZ stake should actually increase much further to ensure more profits remain for the natives.

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  7. SELLING GOVT STAKE IS OUT OF QUESTION. PRIVATISATION HASNT WORKED FOR ZAMBIA. PRIVATISED MINES HAVE ONLY BECOME SPECIAL PURPOSE VEHICLES FOR MASS LOOTING OF NATIONAL WEALTH , TAX EVASION, ARM TWISTING OF GOVT, ALL OF WHICH IS AT EXPENSE OF TRUE OWNERS OFTHE WEALTH, ZAMBIANS.
    DONOT BE FOOLED, IN THE PAST WHEN MINES WERE STATE OWNED, ZAMBIA BENEFITTED THE MOST.
    INFACT ZCCM IH MUST BE CAPITALISED TO BUY MORE SHARES IN THE MINES

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  8. Our dunderhead leaders with a big appetite for money are still considering the offer. They can’t believe the number zeros in this offer. Isn’t this the same thing that made Chiluba and his minions to sell ZCCM in the first place. Now its Lungu’s turn to sell off everything and it will be good bye to ZCCM-IH.

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  9. When a capitalist offers you $700m for your shares, just know that your stake is worth much more maybe even ten times more.
    Zambia should not sell but instead collect the new tax imposed.

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  10. The Zambian govt should not entertain the offer. In fact we should increase our holding to 50% with the copper in the ground as our purchase consideration like Botswana did with Debeers. Botswana never paid a penny for their 50% holding in the joint venture thus the benefit.We should also demand more seats on the board so that we get know what hell goes on in these mines. These guys have 80% and they are a majority shareholder, what is their motivation to increase to 100%? Do they want to be free and do whatever they want and loot without looking over their shoulders? It is transparency they want to avoid.

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  11. if 20% is equal to USD700 m then total is USD3,500m.
    If the value of the mine is USD3,5Bm and Quantum owes Zambian government USD9,3billion ( 1.4B Legal fees +7.9B tax).
    You would say Zambian Government has already paid to get 100% shares of the mine.
    Why would you be offered what is already yours?
    I think there is a lot that does not make sense in this article.

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    • Good analytical thinking @12.The GRZ should actually use the debt the mine owes to increase its shareholding in mine to 51%.NOT SELLING EVEN ONE PERCENT OF IT.

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  12. Hopefully the story is not true since in the face of it, it sounds like a really bad offer not worth consideration. As we go to the age of electric vehicles, copper is the new oil. This age is rapidly falling upon us perhaps even as close to as 5 years from now. If our copper resource even as little as now remains were well harnessed, it becomes our oil and not FQM’s. FEM must also be aware then even if this govt were to behave unadvisedly and sold, the next, hoping offcourse it’s not our brother HH, would expropriate or nationalise. FEM knows this offcourse but its a risk they are willing to take. They have not been a good partner in any case. We actually need to get rid of investors like FQM always try to use whatever method to make a free back on Zambia. The blessing of copper is…

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  13. The blessing of copper is upon us. Let not another be its beneficiary for sheer short sightedness or greed. I trust ECL to act in the best long term interest of the country. We are almost there.

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  14. Care must be taken. The Government must not be attracted with such an amount. We should aim to increase the shareholding instead of selling the little that we have.

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  15. That bait is attractive but will mean “shut up” you have nothing to do with your minerals. Currently the first chance of refusal goes to the share holder who is the Government. Once you surrender the mine shall be owned by the opposition leader whom I suspect is behind this dangling of the carrot. Say NO, its none negotiable. Whats wrong with having a share in the mines?

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  16. If the a foregoing story is true, I earnestly ask ECL and PF government not to even entertain the offer. Imagine Zambia owning no mine let alone no Kwacha (ZMW) then that’s the end of our Country Zambia in our full view of the goings on. Let’s cry out to God in Spirit and Truth He will surely set us free and heal the land. We are the Nation named after His Name. Genuine effective petitions are derived from our KNEES. We are capable of blocking the pending Evil of extreme AVARICE.

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  17. if this is true, it will be CONFIRMATION THAT WE HAVE NO OPPOSITION, NO UNIONS AND NO PROPER NGO’s APART FROM THE CORRUPT ONES MAKING NOISE FOR VARIOUS POLITICAL PARTIES!! Just on reading or hearing this, WE SHOULD HAVE HEARD HUGE OPPOSITION FROM THE MENTIONED PRESSURE GROUPS, Alas, NON!! This government lacks: foresight, patriotism, decency and wisdom! They may just accept that!! That is what RB did to Lumwana, he sold the few ZCCM – IH shares, we lost control of the entire mine!! IT CAN HAPPEN AGAIN!!

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  18. I would recommend the Zambian Government increases the stake to 30% instead of selling off all the shares. We are tired of threats to downsize the labour force and unwarranted leakages from the economy.

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  19. Zambia is in this predicament because of poor leadership over the privatization process. Zimbabwe is better than us because they still own their mineral resources including diamonds. We blindly followed stupid policies from the west that meant enslaving Zambians. It must not be allowed anymore.

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  20. ALERT!!! Government should NOT even entertain this scheme, its meant to usurp all the control powers, regulations and operations monitoring of the mine owners. These the schemes HH has been strategizingin order to weaken Government’s ability to do the right things regarding the mines.
    Copper industry projections for the next 20 years is very positive because the demand for the the red stone is expected to rise exponentially following the ban and reduction of producing Diesel Vehicles in Germany and China in preference to ELECTRIC Vehicles. The biggest component in this new technology is Copper and its hybrid and thats why these mine investors are playing tricks. Government needs to create Think Tanks who do nothing but just provide Government with sound and solid inputs through…

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  21. contd
    Government needs to create Think Tanks who do nothing but just provide Government with sound and solid inputs through research, monitoring and evaluation of local and global trends! What’s wrong with us kanshi? Lets institutionalise these Think Tanks so that the lies and tricks of these multi-national companies and their stooges can be checked SMARTLY! Zambia isnt a poor country and this is a fact, so lets do the correct things!!!

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  22. Government must ensure the new tax pronouncements are made law. Even if the mine owners threaten Government with job cuts, we the Zambian people will all go to the Copperbelt and explain to our miners that Government means well. We are better off these mine investors pay greatly to the treasury and use the same money to create wealth and other economic ventures which in turn will create better and more rewarding employment, its called thinking and working smart, period. We cant continue to be enslaved today by these crooks. HH, you are a crook and a sellout. Dont you dare attempt to set your foot on the Copperbelt or Lusaka, you oppose development due to your personal ego, shame.

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  23. I’d!it’s!!!!!!!
    Pius fired and then you bring in a lawyer who wanted the ,1.4 billion dollar legal case dropped, I smell a rat here. This PF is up to no good.

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  24. Just spitting mad! Are you kidding me. THIS IS FAKE NEWS surely ( it’s that Pius Kasolo gremlin being naughty)!

    First of all just 20% in Africa’s biggest copper producing mine? Not selling but wanting bigger share surely.

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    • My fellow Zambians lets start marching to get our mines back! This is our children’s future being mined to benefit foreigners! LETS GET IT BACK. Make Zambia great again! Sorry to borrow from Trump…!

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  25. Knowing lungus corruption and need for cash to hang on to power , anything is for sale in Zambia.

    This is a done deal…..

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  26. HH is right, high business taxes ultimately hurt the ordinary citizens.

    By Kalapashi

    You do not need to be a noble prize winning economist to know that countries with low tax regimes tend to have higher economic growth. And conversely countries with high tax regimes have the lowest economic growth rates.

    Ireland and the United Arab Emirates (UAE) are good examples of countries that have attracted investment and consequently strong economic growth, in the recent past, riding on low taxes. This is what Donald Trump has been doing in America to take jobs back to that country.

    Tax is a cost to business. Consequently when business taxes go up, companies simply transmit this increment to their customers by increasing the prices of their goods and services. Companies may also…

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    • Yes low taxes encourages investment, but the good ends there when corruption is a second product in the mix. No one is against investment, we are against the unholy mess that is African politician misconduct.

      Unfortunately the temptation to steal from the people is so overwhelming in Poor developing countries. Add the racist misconduct of conglomerates that think they can buy in and take it all from the people. The jobs are not stable and the investors are quick to shift responsibility to create wealth for their shareholders and not the citizens of that country.

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  27. I just this is not the motive for firering Kasolo.
    Coz the article say the offer had been there for sometime but it has not been made public!!! Smell a rat there

    We should actually reverse this offer and say we drop the 1.4bl in exchange of 40% shares at your calculation/valuation.

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  28. We will never ever escort free anyone selling any government company or shares.we will fight to the end.ediots

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  29. PF needs to wake up to the Zambian opinion on our mines. How we vote should be heavily influenced by ‘seen’ good financial astuteness.

    We want controlling shares and greater income out of our mines. We want new explorations by foreigners stopped. The new found wealth will be for future generations. We should set a limit of how much comes out of the mines a year and stop over mining.

    For elections and teaching of the masses, it would be great to understand how much each government administration has utilised our Mines wealth; whether that was to our benefit or to bad debts and corruption. People should use this to balance opinion on government performance.

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