(Ecofin Agency) - Canadian miner First Quantum has been grappling with financial challenges since the abrupt closure of its flagship Cobre Panamá copper mine in late 2023. The company is actively exploring options to secure additional liquidity and maintain operations.

In Zambia, First Quantum Minerals has secured a copper prepayment agreement with its main shareholder, Jiangxi Copper, which will contribute $500 million. The funds will increase the Canadian company's liquidity as it faces the closure of the largest copper mine in its portfolio since late 2023. Panama abruptly ordered the closure of the Cobre Panama mine at the end of November, depriving the company of almost half of its annual production, and First Quantum's market capitalization fell sharply in the aftermath. Concerns also emerged about the company's ability to finance its continued operations, prompting rumors of the sale of one or more copper mines in Zambia.

The company denied these rumors and is examining other options to overcome the crisis. The agreement signed with Jiangxi is part of this process and will enable the Chinese group to obtain annual deliveries of 50,000 tons of copper anodes produced from the Kansanshi mine in Zambia at market prices. To raise further cash, First Quantum is also expected to dispose of minority stakes in its main assets, notably in Zambia, and sell off smaller assets.

"Constructive discussions with our lenders for an amendment and extension of our loan facilities, which are an important component to our fulsome solution, are well-advanced," said Tristan Pascall, the company's CEO.

First Quantum Minerals' current portfolio includes the Sentinel and Kansanshi copper mines in Zambia, which delivered 349,000 tons in 2023, out of total production of 708,000 tons. The company also operates the Pyhäsalmi (Finland), Cobre Las Cruces (Spain), Çayeli (Turkey), and Guelb Moghrein copper mines in Mauritania.

First Quantum, the leading copper producer in Zambia, aims to produce 370,000 to 420,000 tons of copper by 2024, including at least 350,000 tons from its two Zambian mines. 

Emiliano Tossou