FQM shifts to Panama?
... as it downgrades investments in Zambia to prop up huge investments in tax haven country
WE are not surprised that First Quantum Minerals wants to run away from Zambia on flimsy grounds but is ready to invest heavily in Panama, a tax haven, an opposition leader has said.
Enock Tonga, president of 3rd Liberation Movement said reports that the FQM is poised to fire up a giant copper project in Panama, thousands of miles from its beleaguered mines in Zambia, were not surprising.
Mr Tonga said government should remain resolute and not give in to arm twisting tactics over the mines because Zambians deserved to benefit from the natural wealth generated in the country.
He said, government should just take over the mines and that there were many investors ready to take where others fail.
“There is no apology to this. There is no excuse to refuse to pay taxes. Let us get what belongs to the people. We cannot be held at ransom by mines. This all part of cartel strategy,” Mr Tonga said.
Reports indicate that First Quantum Minerals is poised to fire up a giant copper project in Panama, thousands of miles from its beleaguered mines in Zambia. For bondholders, that’s a welcome distance.
The Canadian copper company is ramping up production at the Cobre Panama plant this year, even as a mining tax hike forces it to shed jobs and cut production at its Zambian facilities. With Panama slated to become a more prominent place of operations, bondholders should benefit as Panama’s stronger credit rating feeds into the debt’s prices, First Quantum president Clive Newall said in an interview.
Where First Quantum does significant business matters to bondholders who closely follow risks associated with lending to companies operating in that particular country. Panama has an investment-grade rating, while Zambia is ranked more deeply into junk.
Any subsequent boost to the bonds from a shift would be a reprieve for First Quantum’s lenders, who’ve seen their notes post significant losses in recent months.
The firm, and producers like it, also faced pressures as the copper price tumbled, amid trade tensions and fears of slowing global growth.
President Edgar Chagwa Lungu (left) talks to Vice-President before departure for South Africa at Zambia Air Force Base in Lusaka on Tuesday: