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MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  First Quantum Minerals Ltd.    FM   CA3359341052

FIRST QUANTUM MINERALS LTD.

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Zambia expects to find new Mopani investor by year-end, IMF examines Glencore transaction

01/20/2021 | 12:32pm EST

* Zambia's ZCCM-IH aims to find Mopani investor by end-2021

* External investor expected to take stake and fund mine expansion

* IMF looking at deal, says it was not consulted on it

LUSAKA, Jan 20 (Reuters) - Zambia's mining investment arm ZCCM-IH said it expects to find a new investor for Mopani Copper Mines by the end of the year, as the International Monetary Fund looks into Zambia's deal with Glencore, Mopani's majority stakeholder.

Zambia became Africa's first pandemic-era sovereign default in November, but ZCCM-IH agreed on Tuesday to take on $1.5 billion in debt for Glencore's stake, making it the sole owner of the mine.

ZCCM-IH and government agency IDC say the debt, owed to Carlisa Investments Corp, a British Virgin Islands-based company controlled by Glencore, is guaranteed by Mopani, not by the government, and is therefore not part of Zambia's sovereign debt.

But analysts say the Mopani deal could compromise Zambia's drive for debt sustainability required as part of any support from the IMF.

"The Fund is working on understanding the details of the transaction," the IMF told Reuters, adding that it was not consulted about the deal.

Zambia's IDC, charged with promoting industry, holds 60% of ZCCM-IH while the ministry of finance has a 17% stake and the National Pension Scheme Authority holds 15%.

EXTERNAL INVESTOR

An external investor in Mopani would help ZCCM-IH pay off its debt to Carlisa, and is expected to fund expansion projects to boost annual copper output from a little more than 34,000 tonnes to 150,000 tonnes.

"We expect a strategic equity partner will be identified before the end of 2021," the IDC told Reuters. ZCCM-IH Chief Executive Mabvuto Chipata said he agreed with that target.

The investor will be expected to take a stake in Mopani and complete expansion projects at a cost of $300 million, mines minister Richard Musukwa said on Tuesday, adding that companies from Britain, Canada, China, Qatar, South Africa, and Turkey have shown an interest.

As part of President Edgar Lungu's policy of greater state control over mines, the stake on offer will not be as high as the 90% held by Glencore and First Quantum Minerals through Carlisa. Glencore holds 81.2% of Carlisa, with First Quantum holding the remaining 18.8% of Carlisa.

The minister did not specify how large a stake was on the table, but private companies will typically not want to be the minority shareholder in a state-owned entity.

(Reporting by Chris Mfula in Lusaka Additional reporting by Joe Bavier and Helen Reid in Johannesburg; Editing by David Goodman and Steve Orlofsky)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
DOW JONES AFRICA TITANS 50 INDEX 0.06% 537.28 Delayed Quote.1.14%
DOW JONES SOUTH AFRICA(ZAR) -0.05% 1927.41 Delayed Quote.9.34%
FIRST QUANTUM MINERALS LTD. -0.03% 30.61 Delayed Quote.34.22%
GLENCORE PLC -0.35% 302.5 Delayed Quote.30.71%
GOLD -0.35% 1799.44 Delayed Quote.-4.61%
S&P AFRICA 40 INDEX 0.65% 175.09 Delayed Quote.0.73%
SILVER 0.32% 27.741 Delayed Quote.7.08%
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Financials (USD)
Sales 2021 6 633 M - -
Net income 2021 693 M - -
Net Debt 2021 6 122 M - -
P/E ratio 2021 25,0x
Yield 2021 0,10%
Capitalization 16 756 M 16 760 M -
EV / Sales 2021 3,45x
EV / Sales 2022 3,17x
Nbr of Employees 20 000
Free-Float 80,0%
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Number of Analysts 23
Average target price 21,88 $
Last Close Price 24,35 $
Spread / Highest target 13,3%
Spread / Average Target -10,1%
Spread / Lowest Target -48,5%
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NameTitle
Philip K. R. Pascall Chairman & Chief Executive Officer
Geoffrey Clive Newall President & Director
Hannes Otto Meyer Chief Financial Officer
Tristan Pascall Chief Operating Officer
Andrew Bell Adams Independent Director
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