First Quantum Minerals – FQM, Zambia’s largest copper miner has recorded a 15% increase in copper production at its Sentinel Mine at Kalumbila in the first quarter (January to March) of 2019.
Overall, the group which has two mines in Zambia has reported a drop of 3% in revenue to US$857 million while gross profit grew by 2 percent to US$185 million for the three months to March 31, 2019, compared with the same period last year.
Production at the company’s Kansanshi Mine in Solwezi has been impacted by the planned processing of lower grade oxide ore and lower throughput.
The initial forecast for 2019 was that the country’s mining sector would record a moderate increase in production but due to changes in the fiscal regime, the import of concentrate from the Democratic Republic of Congo (DRC) has been scaled back by other Zambian processors resulting in reduced output.
FQM sources concentrate locally from its two mines hence the recent import tax on concentrate has had less impact on production at its Kansanshi smelter.
FQM’s Sentinel mine delivered another strong quarter with copper production of 57,716 tonnes, a record for the first quarter.
“Our first quarter financial results reflect solid operational performance despite the rainy season in Zambia and lower production from Las Cruces resulting from the land slippage early in the year. We expect operational results to improve through 2019 as the ramp-up at Cobre Panama accelerates. In the coming years, we will be able to deliver on our commitment to deleveraging our balance sheet,” said Philip Pascall, FQM’s chairman and chief executive officer.
Pascall explained that the refinancing announced earlier in the year was a step towards improving liquidity and pushing out debt maturities and that the company would continue this effort throughout the year with further progress expected in 2020 as Cobre Panama starts to meaningfully contribute to cash flow, while also consolidating work done on its project pipeline to enable future growth.
“As ramp-up progresses, Cobre Panama will allow us to deliver on our stated objectives of increased geographic diversification and increased copper production. We are now realizing the benefits of good design and quality assurance in construction,” he said
FQM has recorded a significant milestones achieved at its Cobre Panama mine. The project remains on schedule to deliver between 140,000-175,000 tonnes of copper in 2019 with approximately 80% of total production expected in the second half of the year and is expected to be running at an annualized rate of 72 million tonnes per year by year end.
According to the 2018 full year results, the FQM group generated over 70% of its group copper production from its two mines in Zambia.
