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FQM Secures $500 Million Copper Deal with Jiangxi Amidst Panama Mine Struggles

First Quantum Minerals (FQM) has secured a significant lifeline in the form of a $500 million deal with Jiangxi Copper, its largest shareholder. The deal comes amidst struggles faced by the Canadian miner, particularly with its flagship copper mine in Panama.

Under the terms of the three-year prepay arrangement, First Quantum will deliver 50,000 tonnes of copper anode annually to Jiangxi Copper. This copper will be sourced from the Kansanshi mine in Zambia, with payment based on prevailing market prices, the company announced on Wednesday.

“This arrangement underscores the strategic significance of copper, especially as the sector grapples with supply challenges,” First Quantum stated in a press release.

The company’s financial woes have been exacerbated by the shutdown of its Panama mine in December, coupled with a downturn in nickel prices. First Quantum reported a net loss for the fourth quarter, accompanied by an impairment charge of $900 million, primarily attributed to its Ravensthorpe nickel mine.

With substantial debt maturing in the near future and uncertainties surrounding the future of Cobre Panama, its primary revenue source, First Quantum has been in discussions with lenders to amend and extend its loan facilities. The company expressed optimism about reaching a resolution “in the near term.”

Looking ahead, First Quantum remains hopeful that the upcoming Presidential elections in Panama may bring about a positive turn of events for its halted operations.

Additionally, the company is exploring options such as minority investments in its Zambian business and initiating a sales process for its Las Cruces mine in Spain.

Despite the challenges, First Quantum maintains a strong presence in Zambia, including ownership of the Sentinel copper mine and an 80% stake in the Kansanshi mine, both significant assets in Africa’s second-largest copper-producing nation. 

Furthermore, the company holds exploration licenses, including the Fishtie copper project, highlighting its commitment to long-term growth in the region.

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