UPDATE 1-First Quantum Minerals denies takeover talks

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Sept 23 (Reuters) - Canada's First Quantum Minerals Ltd said on Monday it had no knowledge of any potential takeover bids but confirmed it was in talks with Jiangxi Copper Co Ltd for a potential sale of a minority interest in its Zambian copper assets.

The company's shares have risen about 20% since Bloomberg reported on Thursday that First Quantum was attracting preliminary takeover interest and is working with defense advisers to weigh its options.

In Zambia, the company has been embroiled in a dispute with the government after being handed a $5.8 billion bill for unpaid import duties last year.

International miners such as First Quantum have also looked on nervously as the Zambian government appointed a provisional liquidator to run Vedanta Resources' Konkola Copper Mines (KCM), claiming KCM has breached the terms of its licence.

A Jiangxi Copper source said the company had recently bought a stake of almost 10% in First Quantum on the secondary market, below the threshold for disclosure for Toronto-listed companies. China-based Jiangxi did not respond to a request for comment.

Scotiabank analysts said a minority stake in First Quantum's Zambian assets - Kansanshi and Sentinel - could fetch around $2 billion.

As of Friday's close, First Quantum had a market valuation of C$8.42 billion.

Last year, the company produced 605,853 tonnes of copper, with the Kansanshi and Sentinel mines accounting for more than 78% of the total production. (Reporting by Debroop Roy and Shariq Khan in Bengaluru and Jeff Lewis and Tom Daly; Editing by Maju Samuel)