First Quantum Reports Fourth-Quarter Loss Amid Copper Production Decline and Legal Challenges

First Quantum Minerals, a key player in the copper mining industry, has reported a significant fourth-quarter loss, further compounded by a strategic offtake agreement with Jiangxi Copper, its largest shareholder. The company announced a $500 million deal to supply copper anode material from its Kansanshi mine in Zambia to Jiangxi under a three-year prepayment arrangement. This partnership underscores First Quantum's efforts to stabilize its financial position while exploring additional investments in its Zambian operations from potential strategic partners.

During the fourth quarter, total copper production plummeted to 160,200 tonnes from 206,007 tonnes in the corresponding period last year. The decline was markedly noted at the Cobre Panama mine, where production fell by 30.2% to 62,616 tonnes. This downturn follows a forced shutdown of the Panama mine in November, triggered by a ruling from the country's supreme court deeming its operating contract unconstitutional. This decision came in the wake of nationwide protests against the mine's environmental and social impacts, leading to a significant devaluation of over half of the company's market value.

Adding to its financial woes, First Quantum recorded an impairment charge of $900 million, with $854 million attributed to the Ravensthorpe nickel mine in Australia. The charge reflects the dual pressures of declining nickel prices and escalating operating costs, further straining the company's profitability.

For the quarter ending December 31, First Quantum posted a net loss of $1.45 billion, or $2.09 per share, a stark contrast to the $117 million profit, or 17 cents per share, reported in the same quarter the previous year. This downturn highlights the challenging environment faced by the copper mining sector, influenced by volatile commodity prices, operational disruptions, and increasing scrutiny from both legal and environmental perspectives.