First Quantum Minerals Ltd (FQM) is restructuring its key personnel lineup at its Zambian operations to address production and safety challenges in the region, according to an internal memo obtained by Reuters.
This move follows the ongoing repercussions of the sudden shutdown of its flagship Panama mine late last year, which has led to a significant decline in the company’s market value amid public protests against the Cobre Panama project since October.
Acknowledging the efforts of the teams at Sentinel and Kansanshi mines, FQM’s Chief Operating Officer, Rudi Badenhorst, expressed concerns in an email to Kansanshi mine employees last week, noting that the past two production years at the Zambian operations have fallen short of safety and production targets.
The memo underscored the necessity to revitalize commitments to Zambia investments, particularly in light of the suspension of operations at Cobre Panama.
In response, Meiring Burger, formerly part of First Quantum’s group mining team, has been appointed as the general manager of Kansanshi mine, while Axel Kottgen, who previously led the Enterprise nickel project in Zambia, has been promoted to assistant general manager with a focus on achieving target outcomes at Kansanshi.
Additionally, Anthony Mukutuma will spearhead external relations in Zambia, focusing on government and political strategies, as outlined in the memo.
First Quantum has yet to comment on the matter in response to Reuters’ request.
The company faced a significant setback in Panama when the government ordered the closure of one of the world’s largest copper mines, which accounted for 40% of FQM’s revenues.
Despite this setback, earlier announcements by FQM indicated plans to proceed with investments in Zambia, albeit with revised production guidance.
The two Zambian mines, Sentinel and Kansanshi, collectively generated $943 million in revenue for the quarter ending September 2023, with an operating profit of $210 million, according to company filings. However, incidents resulting in the deaths of two contract workers in 2023 highlighted ongoing safety concerns.
Copper production in Zambia in 2023 totaled 349kt, a 10% decline from 2022, attributed to reduced throughput and lower grades at Kansanshi, according to a statement released on Jan. 15.
First Quantum also announced its intention to explore the sale of smaller mines and stakes in larger mining assets.
Fitch ratings agency has cautioned that a permanent closure of First Quantum’s Panama mine could impact the company’s borrowing capacity.
