In the latest developments from the mining sector, sources report that several global entities are contemplating offers for shares in First Quantum Minerals's copper operations in Zambia. Among the potential bidders are Rio Tinto Group and the sovereign investment firm Manara Minerals Investment Co. from Saudi Arabia.
Well-known Japanese traders, Mitsui & Co and Sumitomo, are also reviewing the prospects of First Quantum's Zambian assets. The process is still in its infancy, with invitations for preliminary offers expected soon.
These assets, especially the Sentinel and Kansanshi mines, have garnered attention due to their significant contribution to First Quantum's output, which comprises about half of its copper production and revenues. Last year, the Zambian operations alone brought in an operating profit surpassing $450 million.
The move to divest comes on the heels of challenges in Panama, where First Quantum faced directives to halt operations at its key copper mine amid protests. This action spurred a rush to restructure debts incurred during the development of the mine. The company has already initiated steps to alleviate its financial burden, including a $1 billion equity sale and a $1.6 billion note issuance.
Interest in the Zambian mines is peaking as copper's role in electric vehicle manufacturing and renewable energy infrastructure becomes increasingly vital. The global appetite for the metal is on the rise, yet there is a dearth of new mining projects and high-quality assets on the market.
Historically cautious firms, such as certain Japanese traders, are revisiting their stance on investments in African mines. Rio Tinto, traditionally hesitant to engage in non-operational roles and ventures in central Africa, is also reassessing its strategy, recognizing the potential in new developments over existing ones.
For Saudi Arabia, securing a stake in Zambia’s copper assets aligns with its broader vision to diversify its economic interests beyond petroleum.
Official statements from the companies involved have been scant, with a Sumitomo spokesperson acknowledging a general interest in copper ventures but not commenting on specifics. Others, including First Quantum, Rio, Mitsui, Jiangxi Copper, and representatives from Manara and Zijin Mining, have not publicly addressed the speculation.
