China’s Jiangxi Copper, First Quantum Minerals‘ (TSX: FM) largest shareholder, has increased its stake in the Canadian miner, which is still reeling from the heavy losses caused by uncertainty regarding the future of its flagship copper mine in Panama.
Panamanian legislators were very close to cancelling the Vancouver-based miner recently ratified 20-year contract to operate the giant Cobre Panama copper mine. After three consecutive days of extraordinary meeting, the Congress chose to leave the decision or whether or not kill the agreement to the Supreme Court.
Jiangxi Copper stopped short of securing a 20% interest in First Quantum because the Canadian miner adopted a poison pill takeover defence in 2020. The move aimed at adding a barrier to potential plans by the Chinese company to buy more than 20% stake.
Shares in First Quantum have recovered some of the loses suffered a week ago, last changing hands at $16.67, but still far from the $27.96 they closed the day before an explosion of popular rage among Panamanians rocked the company and forced authorities to backpedal on the signed deal.
The company, Canada’s largest producer of the coveted metal, produced 816,000 tonnes of copper in 2021, its highest ever, thanks mainly to record output at Cobre Panama.
The mine, in production since 2019, contributes almost 5% of the country’s GDP. It also makes up 75% of Panama’s export of goods and has created at least 40,000 jobs, directly and indirectly.
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