First Quantum Minerals Ltd. (TSX: FM) is gearing up to fast-track a copper project in Africa following the recent shutdown of its Cobre Panama mine in Central America last week.
This week, the miner announced that it had signed an agreement with the Zambian firm Mimosa Resources to fast-track the Fishtie copper project in Mkushi in the Central Province. The revised agreement targets a maximum annual copper production of 30,000 tonnes by the end of the decade and sets up 2026 as the beginning of production. The endeavour will be fueled by a total investment of US$200 million, primarily led by Mimosa.
First Quantum and Mimosa first announced an agreement to develop the project back in 2012. Since then, the project has seen substantial technical groundwork and the establishment of crucial initial infrastructure.
“We look forward to working together with our partners at FQM, developing Kashime as a model mining operation, and delivering on the aspirations of the various stakeholders with whom we have maintained close relationships over the past years as we have progressed the project,” Mimosa Resources Executive Chairman Jordan Soko said.
The company recently saw its copper operations in Panama being shut down by the government after the Supreme Court declared its Cobre Panama contract unconstitutional. The declaration came after thousands of people protested against the project arguing that the mine would cause irreversible environmental damage to the region.
Read more: First Quantum starts international arbitration as Panama’s president orders mine shutdown
Read more: Panama Supreme Court rules First Quantum copper mine contract unconstitutional
Mimosa owns 37.5 per cent of Kashime Copper Ltd which has the Fishtie project. However, under the revised development agreement, Mimosa would increase its ownership to 75 per cent. The stake increase is conditional upon Mimosa’s successful completion of a feasibility study and securing the necessary financing for the project.
“We are determined that this resource should be developed now that the investment climate in Zambia has improved,” First Quantum Zambia Manager Godwin Beene said.
“We have committed a deep level of organizational support to Mimosa, so that they are able to successfully develop and run Fishtie, and in so doing provide inspiration to other emerging Zambian miners, ” Beene said. He added that Mimosa has clear commercial objectives that it must meet within a timeframe that keeps the project on track.
First Quantum has been a major miner in Zambia since 2005
First Quantum has a long history of mining in Zambia which includes an US$8 billion fine in 2018 by the tax agency because of unpaid import duties.
Its flagship project, the Kansanshi copper-gold mine near Solwezi has been in operation since 2005. The Sentinel open-pit copper mine was constructed over four years starting in 2012 and represents US$2.1 billion of investment. Sentinel is Zambia’s largest infrastructure investment since the Kariba Dam was constructed in 1959.
First Quantum also has nickel projects with its Enterprise project located 12 kilometers away from the Sentinel copper mine.
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