06 Jan First Quantum Minerals considers $1 billion expansion of Zambian copper mine
Canadian mining giant First Quantum Minerals is pondering an investment of around US$1 billion to boost falling production at the Kansanshi copper mine in Zambia, according to a company document seen by Reuters.
In the presentation given to Zambian government officials, First Quantum said the investment would add a decade of life to Africa’s largest copper mine, increasing annual production to 300,000 tonnes over time from an expected 235,000 tonnes last year.
The mooted expansion will offset production declines at the Kansanshi mine, which would commence in 2022 and continue to drop sharply towards the middle of the decade, when output is estimated at 130,000 tonnes without investment.
However, the prospect of securing board approval for the expansion is unlikely after Zambia increased copper royalty taxes by 1.5 percentage points last year and introduced a new 10% rate when global prices exceed $7,500 per tonne.
“We do not anticipate any fresh investments to extend the life of copper mines while this, and increased taxation, hangs over miners,” Verisk Maplecroft senior analyst Indigo Ellis told Reuters last week.
The situation is further complicated by an ongoing dispute between First Quantum and its joint venture partner ZCCM-IH over profits from the mine that have been set aside for the project. State-run ZCCM-IH owns 20% of Kansanshi Mining PLC.