Canada’s First Quantum Minerals Ltd has confirmed it was in talks with China-based Jiangxi Copper Co Ltd for a potential sale of a minority interest in its Zambian copper assets.

The company, however, said it had no knowledge of any potential takeover bids.

The shares were down about 12% in afternoon trading.

First Quantum’s shares had gained about 20% since Thursday after Bloomberg reported, citing sources, that the Canadian miner had attracted preliminary buyout interest and was working with advisers to weigh options.

The company has been embroiled in a dispute with the Zambian government after being handed a $5.8 billion bill for unpaid import duties last year.

The Zambian government’s decision to appoint a provisional liquidator to run Vedanta Resources’ Konkola Copper Mines, claiming license breach, has added to concerns for international miners such as First Quantum.

A Jiangxi Copper source said the company had recently bought a stake of almost 10% in First Quantum on the secondary market, below the threshold for disclosure for Toronto-listed companies.

Jiangxi did not respond to a request for comment.

A minority stake in First Quantum’s Zambian assets – Kansanshi and Sentinel – could fetch about $2 billion, according to Scotiabank analysts.

They said a deal would enable the company to repay debt at the same time production at its massive Cobre Panama copper mine gears up.

“In our view, a transaction that simultaneously reduced the company’s African exposure while improving the balance sheet via a cash infusion would be positively received by investors,” Scotiabank analyst Orest Wowkodaw said in a research note.

First Quantum’s net debt stood at about $7.3 billion at the end of the second quarter, according to Jefferies.

“From a strategic perspective, now is a good time to acquire copper assets as the copper price remains low and the implied value of assets in copper mining equities is depressed,” Jefferies analyst Christopher LaFemina told clients.

First Quantum produced 605,853 tonnes of copper in 2018, with the Kansanshi

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14 COMMENTS

  1. When the Chinese takeover, all the copper figures from these mines will disppear…they will the lowest producer in Zambia. No figures to show for in all Chines owned mines in Zambia.

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    • Well you wanted the western companies to go….. lets see if the chinese will pay you tax. What a country of banfoons

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    • LT be selective in what you post here. Not even you LT can understand a shirt about 12% has to do with poor people.
      These kind of business transactions can only be understood by like of HH.
      All you what is to insight people against Chinese.

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    • Please keep the tax evader, inside trading thief and money laundering thief to PANAMA out of this. When he dies, the money in PANAMA shall die as well but he has no clue about it! UPND should invite knowledgeable people to give a talk at a seminar about Mobutu, Savimbi and others who loved Switzerland, Cayman Islands and other offshore tax havens. PRIVATIZATION THIEF also known as HAZALUZA HAGAIN.

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  2. Zambian mines need Chinese ownership. The following synergies are to be derived:
    1) Economy of scale when buying inputs like:
    **Explosives
    **Tyres
    **Mining chemicals
    **Mill balls
    **Explosives
    **PPE, etc
    All of which can be sourced from China
    2) The Chinese work ethic
    3) Efficiency enhancement, and
    4) Labour and salary rationalisation

    However, there will be a few inevitable downsides such as:
    a) The entire labour force will have to accommodate a wage cut of 10-15%
    b) Expat labour will be terminated and replaced by Chinese
    c) Zambian superintends and managers will be shadowed by a Chinese national

    ALL ZAMBIAN MINES NEED TO FALL UNDER THE UMBRELLA OF CHINESE INVESTORS IN ORDER TO REMAIN VIABLE…This formula worked successfully in Namibia with…

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  3. @PADAM YOU ARE AN EXPERT WHO SHOULD BE ON THE LIQUIDATOR PANELS IN ZAMBIA COULD YOU SEND YOUR APPLICATION TO ME WILL PUSH THE GOVERNMENT TO EMPLOY U EITHER AS CONSULTANT OR FULLTIME , U ARE QUIET KNOWLEDGEBLE ,RIGHT ON SPOT

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    • Can I have your contact please Anyoko
      I’ll consider it an honour to be back in Zed, having spent 18 years there

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  4. Is Richard Musukwa aware about this transaction or he’s busy organising slime dumps for jerabos? These transactions that are concluded offshore have always made us a laughing stock because our assets are sold without our knowledge and no tax is collected. Bwalya Ng’andu please update us on this one

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  5. You mean Richard Musukwa the same man who said black mountain is safe the same man who labeled concerned citizens as PF detractors, unpatriotic etc. Awe kwena PF is useless

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  6. HH and Chiluba started this mess by selling our mines for cheap. These leeches are just running away from the money in taxes they owe the nation. Africans need to choose better business partners. I question the reliability of people that tried to make a black Jesus a white man.

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  7. “The company has been embroiled in a dispute with the Zambian government after being handed a $5.8 billion bill for unpaid import duties last year.” This is the real reason they are trying to flee. Zambians open your eyes and fight for Africa.

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  8. THE BIGGEST PROBLEM IS WE ALWAYS WANT TO ATTACH EVERY THING TO POLITICS
    WE HAVE AN EXAMPLE OF WHAT IS HAPPENING WITH KCM AND NOW WE GET THESE STORIES FROM KANSANSHI LETS JUST PUSH THE RIGHT WAY AND GET THE RIGHT RESULT LETS US TAKE OUR PAST MISTAKE AS LESSONS AND DO THE RIGHT THING TODAY LETS STOP FINGER POINTING IT WILL NOT HELP
    ITS NOT TOO LATE LETS WAKE UP MINISTER OF MINES MINISTER OF FINANCE ZRA AND MANY OTHER GOVERNMENT WINGS OPEN YOUR EYES LETS NOT TALK POLITICS LET EACH WING PLAY ITS ROLE

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