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First Quantum sees no 'contagion' risk in Zambia after Mopani deal – COO

18th February 2021

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TORONTO – First Quantum Minerals sees no risk of nationalization in Zambia following the sale last month of Mopani Copper Mines to the country's mining investment arm ZCCM-IH, the Canadian miner's chief operating officer, Tristan Pascall, said on Wednesday.

“We don’t see any contagion or any element or risk in that more broadly in Zambia," he said on a call.

Zambia became Africa's first pandemic-era sovereign default in November, but ZCCM-IH in January agreed to take on $1.5-billion in debt for Glencore's Mopani stake, making it the sole owner of the mine.

ZCCM-IH has said it expects to find a new investor for Mopani by the end of the year as it looks to boost copper output from a little more than 34 000 tonnes to 150 000 tonnes.

First Quantum, which previously held 16.9% of Mopani, operates the Kansanshi and Sentinel mines in the country.

The miner aims to resolve talks with the Zambian government over expansion of the smelter at Kansanshi before August elections, Pascall said. First Quantum wants a deal that allows it to deduct royalties from costs, he said.

He said efforts to sell minority stakes in the Zambia mines continue, but the company has to take rising copper prices into account.

"That's the challenge for copper producers looking to embark in M&A," he said.

Edited by Reuters

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