[ad_1]
(Bloomberg) – First Quantum Minerals cuts spending and suspends dividend in drastic effort to free up cash after being ordered to close its $10 billion copper operation in Panama The company plans to put its small-scale mine up for sale.
Most Read Articles on Bloomberg
The Canadian mining company said Monday it is considering various options in the capital markets to maintain its financial position and is working with banks to “address and expand” its bank credit facilities. It is also considering selling stakes in larger mining assets following expressions of interest from potential investors.
First Quantum is reeling from Panamanian President Laurentino Cortizo’s sudden order late last year to shut down its largest asset, following a Supreme Court ruling invalidating the mine’s operating contract. . The closure of Cobre Panama, which accounted for 78% of First Quantum’s operating profit in the first nine months of 2023, wiped out more than half of the miner’s market capitalization as billions of dollars in debt mature. , the company’s finances fell into uncertainty. In the next few years.
First Quantum plans to cut capital spending by $400 million this year to a range of $1.2 billion to $1.4 billion, partly due to slowing spending at Cobre Panama and moves to counter rising costs at its Zambian mine. is.
The company also said it expects copper production to be nearly half of last year’s level if Cobre Panama is not operational. The company expects to produce 708,000 tonnes of copper in 2023 and between 370,000 and 420,000 tonnes in 2024.
First Quantum previously announced plans to suspend mining operations at its Australian nickel mine. Bloomberg also reported last week that the company had begun the process of selling its copper mines in Spain.
The crisis has drawn the attention of rival Barrick Gold Corp., which Bloomberg reported earlier this month reached out to some of First Quantum’s largest shareholders to gauge support for a potential deal.
Read more: Barrick says he will assess possible bids from First Quantum holders
The company said in a statement on Monday that it held discussions this month with Panama’s Ministry of Commerce and Industry regarding the mine’s current outage, which it described as “maintenance and safety management.” The company says the cost to maintain the site is estimated at $15 million to $20 million per month. The company plans to submit an initial plan to the government on January 16th.
First Quantum says it remains “committed” to Panama despite setbacks, campaigning to tout the mine’s benefits ahead of a crucial presidential election in May that could decide the project’s fate embarked on.
Cobre Panama is one of the world’s newest and largest copper operations, producing about 1.5% of the world’s copper supplies until it ceased operations last year due to protests blocking access to key sources. .
(Updates 8th paragraph with details about Cobre Panama.)
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
[ad_2]
Source link
