Saudi Arabia’s Manara Minerals is nearing a deal to acquire a minority stake in Canadian miner First Quantum Minerals’ Zambian copper and nickel assets, sources familiar with the situation have informed Reuters.
The joint venture, which consists of Saudi Arabian mining company Ma’aden and its $925 billion Public Investment Fund, is in advanced negotiations for a 15% to 20% equity stake in the Zambian assets. This stake could be valued between $1.5 billion and $2 billion.
The transaction could potentially be finalized by the end of the year, although negotiations are still ongoing, and no deal is guaranteed. Both First Quantum and Manara Minerals have refrained from commenting on the sale.
This potential acquisition is significant, given the growing demand for copper, which is critical for the clean energy transition, especially in electric vehicles and AI data centers. Earlier this year, First Quantum announced plans to sell a partial stake in its Zambian mines while also considering the sale of its Las Cruces mine in Spain to raise capital and reduce debt, following the shutdown of its Cobre Panama mine by the Panamanian government.
Manara’s interest aligns well with First Quantum’s strategy of retaining a majority stake in its operations, making them a leading candidate for this transaction. First Quantum owns key assets in Zambia, including the Kansanshi and Sentinel copper mines, which have gained increased importance following the Cobre Panama shutdown. The Enterprise nickel mine is also part of their Zambian portfolio.
Citi analysts noted that this move is not surprising, given First Quantum’s ongoing efforts to strengthen its balance sheet and the Saudi firm’s active pursuit of mining stakes. Following the news, First Quantum’s shares rose by as much as 4.9% in Toronto. The Zambian mines contributed $1.08 billion to First Quantum’s revenue in Q2 of this year, while Zambian state firm ZCCM-IH holds a 20% stake in Kansanshi.
First Quantum plans to invest an additional $1.3 billion into Kansanshi over the next five years, part of a broader $2 billion initiative aimed at boosting copper output to around 277,000 tons per year by 2033, up from approximately 130,000 tons in 2023.
The Canadian miner has faced a 40% revenue loss due to the closure of Cobre Panama, once one of the largest copper mines in the world. Earlier this year, the company undertook significant capital restructuring, including a $1 billion share offering, to bolster its financial standing.
As part of Saudi Arabia’s strategy to secure key minerals, Manara has made substantial investments in copper, nickel, and lithium, seeking to establish the country as a hub for battery and electric vehicle manufacturing. The firm is also negotiating with the Pakistani government regarding participation in the Reko Diq copper mine, which is co-owned by Barrick Gold and local state enterprises.
Anticipated price rallies for copper, driven by a widening supply gap, are projected to keep prices above $10,000 per ton by the end of 2025, according to Bank of America.
