First Quantum backs Zambia with USD1.25-billion investment

First Quantum backs Zambia with USD1.25-billion investment

During his address to delegates at this year’s Investing in Africa Mining Indaba held in Cape Town, South Africa, Tristan Pascall, CEO of Canadian based First Quantum Minerals, announced that the company will invest more than USD1.35-billion in new Zambian projects.  

Renewed confidence in Zambia’s business environment has prompted the nation’s largest copper miner to unveil a trailblazing USD1.35-billion package of new projects.

First Quantum Minerals (FQM) this week approved plans to invest USD1.25- billion in its long-awaited expansion of Kansanshi’s operations in Solwezi – known as the ‘S3’ project – and a final USD100-million to start its USD250-million Enterprise nickel project in Kalumbila.

Together, the two investments represent the largest investment in Zambia since FQM’s Sentinel project was approved in 2012 and are the first step in realising the Zambian government’s vision for the mining sector, which includes increasing production to 3 million tonnes of copper a year within the next decade.

Safeguarding the present Kansanshi has been the lynch pin of Zambia’s copper mining industry over the last decade and a half, and was the first of the three massive, ultra-modern copper mines that have put North-Western Province on the mining map.

In 2020, Kansanshi paid more than USD495-million in taxes and other public contributions to Zambia, a significant portion of the total FQM contribution to the country of more than USD850 million. However, as with all mines, ore grades have deteriorated over time, and without a pit expansion and realignment, together with significant investment into the processing facilities, the mine was destined to come to an early end in a matter of years.

The ‘S3’ project will extend the life of the mine at Kansanshi until the 2040s and increase copper and gold production by at least 25%. It will also add about 800 permanent jobs, and a further 1800 during the construction phase.

Crucially, it also safeguards the future of the 8500 people already employed at Kansanshi.

Building for the future

The new Enterprise nickel mine, located approximately 14km from FQM’s Sentinel mine in Kalumbila, has also now been given the go-ahead, following FQM’s pledge this week to invest a final USD100- million.

The mine is expected to be operational within 12 months and will employ more than 700 full-time staff. Zambia has long been synonymous with, and economically dependent upon, the copper mining industry.

Minerals’ diversification has been a vital national aim of the new government, and with this week’s announcement it is now a distinct reality.

Once operational, the Enterprise mine will be a top-10 global nickel mine, producing some 30 000 tonnes of nickel in concentrate annually, making Zambia Africa’s pre-eminent nickel producer.

Enterprise’s high-grade nickel sulphide deposits provide the type of nickel that is required to manufacture batteries for Electric Vehicles (EVs), thus positioning Zambia as a producer of strategic metals, namely copper and nickel, that are vital to the production of new technologies and the ‘green’ energy revolution.

According to Minister of Mines and Minerals Development Paul Kabuswe, FQM’s investment will translate into tangible benefits for the Zambian people in terms of jobs and participation in the supply value chain.

First Quantum’s representative, Dr Godwin Beene, says the mining company has always been deeply committed to Zambia, with 78% of its annual global financial contributions paid over in Zambia, but that recent years had been characterised by an unhealthy stalemate. “These investments have been waiting in the wings for years now, and it is deeply gratifying to me that, through these two major projects, First Quantum is committing itself to a long and bright future in Zambia, to the benefit of the company and the nation jointly.

“The government deserve a great deal of credit for the approach they have taken since this administration commenced last year. They want to see a radical improvement in the size and scale of the industry over the next decade, confident in the belief that when mining does well, so does Zambia. These things do take time to come to fruition, but it does feel today like we are entering into a new and better future for the industry,” says Beene.

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