Saudi Arabia targets Zambian copper mines for billions in investment
- Manara Minerals is negotiating a deal to acquire 15-20% of First Quantum Minerals' Zambian copper and nickel assets.
- This transaction is valued at $1.5-2 billion and aims to assist First Quantum in managing its debt while maintaining its key operations.
- Zambia's ongoing infrastructure and power supply challenges must be addressed to enhance its attractiveness to foreign investors in the mining sector.
Zambia, a key player in the global copper market, has faced ongoing challenges in its infrastructure and power supply, significantly impacting its mining sector. Manara Minerals, a joint venture between Saudi Arabia's Public Investment Fund and Ma'aden, is planning to acquire a 15-20% stake in First Quantum Minerals' Zambian operations for approximately $1.5-2 billion. This acquisition includes First Quantum's Kansanshi and Sentinel copper mines as well as the Enterprise nickel mine, aligning with the Saudi firm's broader investment strategy. In light of recent financial pressures, including revenue losses from the Cobre Panama mine closure, First Quantum is seeking to restructure its capital. By selling off non-core assets, the company aims to manage its debts while retaining control over critical operations. Despite the investment opportunities presented by Zambia's rich copper reserves, the country's mining activities are hampered by underdeveloped transport systems and frequent power shortages caused by reliance on hydropower amid inconsistent rainfall. With ambitions to increase copper output to 1 million tons by 2026, these infrastructural issues must be addressed to attract foreign investment and ensure the sector's growth.