Canadian miner First Quantum Minerals is weighing investment of around $1-billion to lift output at Africa’s biggest copper mine in Zambia, a company document seen by Reuters showed.
The investment would add a decade of life and head off production declines at the Kansanshi copper mine, increasing annual production to 300 000 t over time from an expected 235 000 t last year, according to a company presentation given to Zambian government officials.
Western miners are on edge as Zambia and neighboring countries seek to increase their share of revenue from natural resources.
Canadian-listed First Quantum is studying the expansion even as it is entangled with Zambian State miner ZCCM-IH over profits from the mine that have been set aside for the project. ZCCM-IH owns 20% of Kansanshi Mining, with First Quantum holding the balance.
First Quantum last month began arbitration proceedings against ZCCM-IH following a criminal complaint made by the state miner to Zambian police over a transfer by Kansanshi Mining to a First Quantum subsidiary.
At issue is a transfer of $520-million, a separate document seen by Reuters showed. Two sources said the money had been set aside in a high-interest account to help fund expansion at Kansanshi.
First Quantum was not available for immediate comment on Friday. ZCCM-IH did not immediately respond to a Reuters query.
Sources declined to be identified as the information was not public.