First Quantum says talks on Zambia stake sale stall on coronavirus

By Jeff Lewis

TORONTO (Reuters) - Copper miner First Quantum Minerals Ltd <FM.TO>, which in the past has been in talks with a Chinese company about a possible sale of assets, said on Friday discussions to sell minority stakes in its Zambian mines have stalled amid the coronavirus outbreak in China.

The Canadian miner last September disclosed it was in talks with China's Jiangxi Copper Co Ltd <600362.SS> for a potential sale of minority interests in its Kansanshi and Sentinel mines.

"Any actual face-to-face conversations haven’t been able to take place or even be arranged," First Quantum President Clive Newall told analysts on Friday. He did not name any specific company.

Toronto-listed First Quantum is eyeing asset sales and partnerships as it looks to reduce net debt that swelled to $7.6 billion as of year-end 2019 after finishing construction of its massive Cobre Panama mine.

The miner will publish a technical report on expanding the Kansanshi mine, Africa's largest, by the end of the first quarter this year but will not make a decision for at least three years as it prioritizes debt reduction, Chief Executive Officer Philip Pascall said. No expansion is needed until the end of 2024, he said.

"Because we have a strong incentive and desire to improve the balance sheet, we actually will seek to avoid any capital expenditure for as long as we can," he said.

Reuters in January reported First Quantum is weighing investment of around $1 billion to lift output and head off production declines at Kansanshi.

Newall said the company would consider strategic partners for projects, including its Ravensthorpe nickel project in Western Australia.

First Quantum on Thursday posted a surprise profit, helped by higher sales and expanding production at Cobre Panama.

The shares rose as much as 4% in Friday's session before paring gains and were last trading up 1.6% at C$12.06.

(Reporting by Jeff Lewis in Toronto; Editing by Franklin Paul and Matthew Lewis)