First Quantum Minerals Ltd. is considering a US $1Bn investment in Zambia’s Kansanshi copper mine. The funds, according to media reports, will go towards lifting output at the mine.
The investment will go a long way in adding a decade of life and head off production declines at the Kansanshi copper mine. This, in turn, will increase annual production to 300,000 tonnes over time from an expected 235,000 tonnes last year.
However, and according to analysts and miners with knowledge of the country, securing board approval, which would be needed over the coming year, is likely to be complicated by disputes between miners and the Zambian government over taxes and assets.
According to media reports, these plans will be presented to the company’s board this year, but the project is unlikely to win approval without significant changes to Zambia’s tax regime.
The possible investment comes at a time when the Canadian-listed company is entangled with Zambian state miner ZCCM-IH over profits from the mine that have been set aside for the project. ZCCM-IH owns 20% of Kansanshi Mining PLC, with First Quantum holding the balance.
Over the period of December 2019, First Quantum began arbitration proceedings against ZCCM-IH following a criminal complaint made by the state miner to Zambian police over a transfer by Kansanshi Mining to a First Quantum subsidiary.
