Home » Zambia’s Copper Mines Not for Sale, Says FQM

Zambia’s Copper Mines Not for Sale, Says FQM

The Canadian miner says it remains fully committed to its Zambian operations and the country’s economic and social development.

by Motoni Olodun

Zambia’s copper mining sector has been in the spotlight recently, amid reports that the country’s largest producer, First Quantum Minerals (FQM), was planning to sell a stake in its operations to a Chinese state-owned company.

The rumors, which were first published by Reuters last week, claimed that FQM was in talks with Jiangxi Copper Corporation to offload some of its Zambian assets, following a setback in Panama, where the Canadian miner was ordered to shut down a major copper mine.

However, FQM has strongly denied these allegations, stating that there is no truth in the report and that it remains fully committed to its Zambian operations and the associated economic and social contributions to the country.

FQM owns 80% of the Kansanshi copper mine and smelter in Solwezi, the largest copper mine in Africa, as well as the Sentinel copper and Enterprise nickel mines in the Kalumbila district. Together, these mines account for about 70% of Zambia’s annual copper output, making FQM the country’s biggest taxpayer and employer.

Jiangxi Copper Corporation, on the other hand, is China’s largest copper producer and holds an 18.2% stake in FQM. The Chinese company has been expanding its presence in Africa, with investments in the Democratic Republic of Congo, Guinea, and Tanzania.

The speculation about FQM’s possible sale of its Zambian mines comes at a time when the country is facing a debt crisis and a strained relationship with the International Monetary Fund (IMF). Zambia, which defaulted on its external debt payments in November 2020, has been seeking a bailout from the IMF, but the talks have been hampered by concerns over the transparency and sustainability of the country’s borrowing.

Zambia’s mining sector, which contributes about 10% of the country’s gross domestic product (GDP) and 70% of its export earnings, has also been affected by the global COVID-19 pandemic, which has reduced the demand and prices for copper. However, the industry has shown signs of recovery in recent months, as the vaccination rollout and stimulus measures have boosted the global economic outlook and the appetite for the metal.

According to the Bank of Zambia, the country’s copper production increased by 10.8% to 646,111 tonnes in the first nine months of 2021, compared to the same period in 2020. The central bank also projected that the country’s copper output would reach 900,000 tonnes by the end of 2021, surpassing the previous record of 861,946 tonnes achieved in 2013.

FQM, which has been operating in Zambia since 1996, has also expressed its confidence in the long-term prospects of the country’s mining sector, stating that it has invested over $7 billion in its Zambian operations and has plans to extend the life of its mines beyond 2030.

The company also highlighted its corporate social responsibility initiatives, which include supporting local communities, providing health and education services, and promoting environmental sustainability.

FQM’s statement of commitment to Zambia has been welcomed by the government, which has been seeking to foster a more cordial and mutually beneficial relationship with the mining industry, after years of policy uncertainty and disputes over taxes and royalties.

Source: Mining Weekly

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