Rio Tinto, Saudi Arabia’s state-backed Manara Minerals eyes FQM shares

Rio Tinto Group and Saudi Arabia’s state-backed Manara Minerals Investment Company are reportedly among suitors considering bids for a stake in First Quantum Minerals’ Zambia copper mines.

According to a Bloomberg report obtained from Mining.com by Zambia Monitor on Friday, Japanese trading houses Mitsui & Company and Sumitomo Corporation have also been studying the assets, the people familiar with the transaction told Bloomberg.

First Quantum is reportedly open to selling as much as 30 percent in its mines in Zambia, depending on the offers it received and was said to be seeking first-round bids in the coming weeks.

The Sentinel and Kansanshi mines could also attract interest from Chinese companies such as Zijin Mining Group Copper and Jiangxi Copper Company which is First Quantum’s second-biggest shareholder.

The process is said to be in the early stages and there’s no certainty the parties would proceed with bids.

Read more :FQM confirms moves to sell smaller assets, minority stakes; raises $500 million to support operations

Shares of First Quantum were said to have risen as much as 6.9 percent to C$15.80 in Toronto after Bloomberg reported interest in the Zambian mines stake.

Zambia accounts for about half of First Quantum’s copper output and revenue last year and delivered more than US$450 million in operating profit.

According to Bloomberg, First Quantum is selling a stake in its Zambian assets after it was ordered to close its flagship copper mine in Panama last year following public protests.

That left the company scrambling to refinance the debt it took on to build the mine and that the firm sold about US$1 billion in stock and raised US$1.6 billion from a notes offering this year and said it might look at divesting smaller mining assets.

A spokesperson for Sumitomo said that the company continued to explore opportunities to acquire stakes in copper operations, declining to comment on specific deals.

The copper mines are reportedly attracting interest from a range of investors because demand for the metal if expected to soar in coming years.

Also read: rio-tinto-saudi-arabia-said-to-vie-for-stake-in-first-quantum-mine

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