First Quantum gives greenlight to $1.25 billion Kansanshi mine expansion

First Quantum Minerals yesterday revealed that its board has approved plans for a US$1.25 billion expansion of the company’s Kansanshi copper mine in Zambia, citing renewed confidence in the country’s investment climate.

The TSX-listed miner pointed to the business-friendly reforms implemented by the Zambian Government since President Hakainde Hichilema’s election last August, including one reform allowing mining companies to deduct mineral royalties from their income tax assessments.

The S3 Expansion at Kansanshi is expected to transition the mine from a selective high-grade, medium-scale operation to a medium-grade, larger scale mine. It will require the construction of a standalone 25 million tonnes per annum processing plant and a new mining fleet.

Once the project is completed, Kansanshi’s copper output is expected to average about 250,000 tonnes per annum throughout the remaining mine life to 2044.

The green light for the expansion, first considered back in January 2020, was announced by First Quantum on the eve of the 2022 Investing in African Mining Indaba, which kicked off today in Cape Town. In the day’s keynote speech President Hichilema rolled out a target to increase Zambia’s annual copper production from 830,000 to 3 million metric tonnes in the next 10 years.

In a tweet, Hichilema called the target ‘ambitious, but we’re confident Zambia can achieve it’.

First Quantum also announced the approval of another $100 million investment in its Enterprise nickel project in Zambia, which should come online in 2023. The $1.35 billion package represents the firm’s largest investment in Zambia since its Sentinel project was approved in 2012.