Receiving a US$500-million prepayment from a Chinese shareholder
A Canadian miner is receiving a US$500-million prepayment from a Chinese shareholder with hopes of strengthening its balance sheet after its key copper mine in Panama was forced to stop production late last year. In return, Toronto-based First Quantum Minerals Ltd. will annually supply Jiangxi Copper Corp. with 50,000 tonnes of copper for three years from its Kansanshi mine in Zambia. The Canadian miner will also have to pay interest on the prepayment, the company said.
The Panamanian government ordered First Quantum to shut down its lucrative copper mine in December following protests from environmentalists and a Supreme Court order that annulled a mining contract the company had signed with the country.
First Quantum’s agreement with Jiangxi comes at a time when Canada is trying to reduce its dependence on China for metals such as copper and lithium that are considered important for the transition away from fossil fuels.
In November 2022, Ottawa ordered three Chinese companies to divest their shares from three junior Canadian lithium miners. Industry Minister François-Philippe Champagne in December said he would not compromise on national security, reaffirming Canada’s stance of distancing itself from the Asian giant.
For the rest of this article: https://financialpost.com/commodities/mining/first-quantum-financial-boost-from-chinese-company