FQM shifts to Panama?

... as it down­grades in­vest­ments in Zam­bia to prop up huge in­vest­ments in tax haven coun­try

Daily Nation Newspaper - - Front Page - By NA­TION RE­PORTER

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.

-PIC­TURE BY SALIM HENRY/STATE HOUSE

Pres­i­dent Edgar Chagwa Lungu (left) talks to Vice-Pres­i­dent be­fore de­par­ture for South Africa at Zam­bia Air Force Base in Lusaka on Tues­day:

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