– It’s one of the reasons Pius Kasolo was fired as ZCCM-IH boss
By Matthew Hill and Taonga Clifford Mitimingi (Bloomberg)
First Quantum Minerals Ltd. has offered to buy the Zambian government’s 20 percent stake in Africa’s biggest copper mine for as much as $700 million, according to two people familiar with the transaction.
Vancouver-based First Quantum already owns 80 percent of the Kansanshi mine in Zambia’s North-Western Province, while state-owned ZCCM Investments Holdings Plc holds the rest. The proposal, which was submitted last year, includes $300 million to $400 million in cash, and an equal amount in special royalties, over more than 10 years, said the people, who asked not to be identified because they’re not authorized to comment.
The deal would also include ZCCM-IH dropping a $1.4 billion legal claimagainst First Quantum over a loan the company received from Kansanshi, the people said. The government is still considering the proposal, according to one of the people.
“There are multiple unsolicited offers on the table, including from FQM, which are based on preferential share conversions,” a Ministry of Finance spokesman said in a text message Tuesday. The offers relate to the ministry’s 17 percent holding in ZCCM-IH and a sale would be subject to cabinet approval, it said.
First Quantum spokesman John Gladston declined to comment when contacted on Monday.
First Quantum and the government have been at loggerheads over other issues too. The country’s revenue authority handed it a $7.9 billion tax bill last year, while an increase in royalties this year prompted First Quantum to announce plans to fire 2,500 workers. The company has since backtracked on the proposal.
Kansanshi is First Quantum’s biggest mine and accounted for more than half the company’s revenue in 2017. The Canadian miner’s shares dropped 2.1 percent on Monday, taking the decline for the past year to 18 percent. That values the company at C$10 billion ($7.6 billion).