https://www.miningweekly.com
Copper|Cutting|Financial|Operations
Copper|Cutting|Financial|Operations
copper|cutting|financial|operations

Coronavirus stalled First Quantum’s Zambian stake sale talks

First Quantum president Clive Newall

First Quantum president Clive Newall

17th February 2020

By: Bloomberg

  

Font size: - +

TORONTO – The coronavirus has temporarily derailed talks to sell a minority stake in First Quantum Minerals’s Zambian operations, company executives said.

The virus outbreak is preventing face-to-face meetings with potential Chinese buyers, postponing a sale that’s key to the Vancouver-based First Quantum’s $2-billion debt-reduction plan, the copper miner said during its fourth-quarter earnings call.

Concerns that the virus outbreak will slow demand in China, the largest consumer of most commodities, have rattled markets around the world. That sent copper prices tumbling, highlighting the need for miners to hedge against volatility.

The epidemic hasn’t yet materially affected First Quantum’s physical sales, president Clive Newall said on the call, and the broader market impact is being mitigated by the miner’s hedging program.

“Our hedging program, now extended through 2020, provides some protection from copper price volatility,” Newall said. At the same time, a stronger balance sheet has “made us more resilient to black swan events such as this.”

About 37% of First Quantum’s revenue came from China in 2018.

In an interview in December, Newall said the company’s focus for the next two to three years will be cutting debt by at least $2-billion.

The timing of that reduction is highly dependent on copper prices, executives said during today’s call, but debt likely peaked in the fourth quarter and will continue to decline. First Quantum has sufficient liquidity through the next 12 months to carry out its operating and capital expenditure plans while remaining in full compliance with financial governance, executives said on Friday’s call.

The sale of a minority stake in First Quantum’s Zambian operations would help achieve the debt reduction target faster, but talks are unlikely to resume until the second half of the year, they said.

Jiangxi Copper has been seen as a potential buyer. In December, Newall said First Quantum required the Chinese company sign a non-disclosure agreement restricting it from buying more than 20% of First Quantum’s shares. The company has taken various steps to defend itself against hostile takeovers, most recently adopting a shareholder rights plan.

 

Edited by Bloomberg

Comments

Projects

Showroom

GreaseMax
GreaseMax

GreaseMax is a chemically operated automatic lubricator.

VISIT SHOWROOM 
Stewarts & Lloyds
Stewarts & Lloyds

Stewarts & Lloyds today supplies steel and tube, pipe and fittings, valves, pumps, irrigation, fencing, profiling and roofing products. The cash...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.13 0.163s - 90pq - 2rq
Subscribe Now