Reports that PF government wants 35% shares in mines not true, says First Quantum chairman

TORONTO ( – Copper miner First Quantum Minerals, which saw its shares plunge over 12% in Toronto on Wednesday, said that supposed plans by the Zambian government to take a 35% stake in the country’s mines were “misreported”.

Speaking in a conference call, chairperson Phillip Pascall said he is confident the new government, led by Michael Sata, would be “consultative and constructive” in dealing with the mining sector.

“At times various statements get made that the government is at pains to point out are misreported – and certainly that one of 35% ownership falls in that category,” he added.

Reports emerged in October quoting Mines Minister Wylbur Simuusa that government wanted to increase its shareholding to at least 35% in all projects, depending on how well negotiations with mining firms over reform went.

“As far as we can tell so far, it is their intent to work in a constructive way,” said Pascall.

Sata came into power in September after a campaign that promised to focus on creating more employment and increasing benefits to the country from its natural resources. Ernst & Young earlier this year said a poll of mining executives found resource nationalism to be the greatest risk the industry is facing.

Pascall commented that his company had a “very good and businesslike relationship” with the govenment.

First Quantum owns the Kansanshi mine in Zambia, where it aims to lift production to around 400 000 t/y by the end of 2014.

The company cut its 2011 production guidance to 265 000 t, partly because of acid availability in Zambia.

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