First Quantum Minerals Ltd. has not received any takeover offers from potential bidders, including from Rio Tinto, since September, Bloomberg News reported, citing a phone interview with First Quantum President Clive Newall.
In the report, Newall said that while management was surprised by Jiangxi Copper Co. Ltd.'s US$1.12 billion purchase of an almost 18% stake, there is no chance that would lead to a takeover.
In September, First Quantum confirmed it was in talks with Jiangxi Copper about the potential sale of a minority stake in Kansanshi and Sentinel copper mines in Zambia. As part of the talks, Jiangxi Copper is prevented from amassing more than a 20% stake in the company under a standstill agreement. The restriction is in place for "at least a couple of years."
In late November, First Quantum and Rio Tinto were reported to be engaged in early-stage discussions over a potential joint venture to develop the La Granja copper project in Peru. While Newall did not directly discuss Rio Tinto, he dismissed talk of a takeover bid as "scuttlebutt."
According to Bloomberg, Newall said the company would resist a takeover play. "There's no great desire to be taken over, but under the circumstances where you haven't got much choice then it's all about price," Newall said, adding that the company is not interested in buying up assets either and would instead focus on cutting debt by at least US$2 billion over the next two to three years.
First Quantum is not keen on disposing assets, either entirely or a majority stake, but is leaning toward keeping majority control. "Our only intentions are to sell minority stakes for a variety of reasons: partly deleveraging and, in Zambia, to share some of the political risks with a partner," Newall said.
Newall noted that talks with Jiangxi Copper over a potential sale of a minority stake in its Zambian assets will resume in early 2020, according to Bloomberg.