FQM confirms moves to sell smaller assets, minority stakes; raises $500 million to support operations

First Quantum Minerals (FQM) now says it is evaluating the possibility of a minority investment by strategic investors, following a number of inbound expressions of interest.

Chief Executive Officer, Tristan Pascall, said according to the Mining Weekly publication seen by Zambia Monitor that the miner was confident in the investment climate in Zambia, adding that First Quantum remained committed to the S3 expansion at Kansanshi.

First Quantum Minerals, which is facing a major challenge with the closure of its flagship Panama mine, is reportedly making progress with its balance sheet initiatives.

These include, among others, selling some of the copper miner’s smaller assets and minority stakes in its larger assets, as well as a US$500million arrangement with its second-biggest shareholder.

First Quantum has received “strong interest from highly credible counterparties”, he said on Tuesday, referring to the sales process for the Las Cruces mine, in Spain, and its Zambian business.

The Las Cruces sale is “well advanced”.

Other balance sheet initiatives include the suspension of the group’s dividend, a $400 million reduction in planned capital programmes this year, followed by a $250 million reduction next year and operating cost savings.

As a continuation of the balance sheet efforts, First Quantum also announced a $500 million copper prepay arrangement at competitive terms with Jiangxi Copper.

“This arrangement is a reminder of the strategic nature of copper as supply challenges abound across the sector,” Pascall said.

First Quantum had net debt of $6.4 billion at the end of 2023 and its earnings before interest, taxes, depreciation and amortisation (Ebitda) were $2.3 billion.

The situation at Cobre Panama has impacted the company’s Ebitda generating potential, putting at risk its ability to meet the net debt to Ebitda ratio covenant.

“Management has a strong expectation that the balance sheet initiatives initiated earlier this year will be realised in the near term,” Pascall said.

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