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FQM CUTS CAPITAL EXPENDITURE AS IT BRACES FOR UNCERTAINTY

COVID-19 has brought unprecedented challenges to communities, industries and the global economy

First Quantum Minerals has reduced operating costs and capital spending as it braces itself for the impact of the COVID-19 on the mining sector.

The virus has brought unprecedented challenges to communities, industries and the global economy, and that First Quantum’s priority is the health and safety of its employees and communities, said the company in its financial results statement for the first quarter of 2020.

“The COVID-19 pandemic has brought unprecedented challenges to communities, industries and the global economy. Our priority continues to be the health and safety of all of our employees and the communities where we work,” said Philip Pascall, FQM’s Chairman and CEO.

He added that the company is managing the restrictions and protocols implemented in each country where it operates, to help protect all, particularly those most vulnerable.

Mr Pascall explained that the reduction in capital expenditure included moving construction work on the fourth crusher at its Sentinel mine in Kalumbila into 2021 and deferring development project capital expenditure and some process improvement and sustaining maintenance program at operations.

He said that underlying sustaining capital expenditure was expected to be approximately $200 million in 2020, adding that supported by the mining firm’s banking group, the company had improved its flexibility and liquidity, and would continue to make the changes necessary to deal with the global crisis.

However, despite Sentinel achieving record throughput in the first quarter of 2020, copper production was down 2% compared with 2019 due to lower grade and recovery.

“Kansanshi achieved higher copper production for the quarter compared to 2019. However, Kansanshi smelter processed 329,946 dry metric tonnes of copper concentrate, produced 80,280 tonnes of copper anode and 315,000 tonnes of sulphuric acid,” he continued.

The mining firm has also revealed that with the closure of the South African and Zimbabwean borders, the export of the company’s copper from Zambia was currently being managed through alternative routes.

It added that to date, there had been no significant disruption to sales, supply chains and product shipments at the company’s other operations, but that its exploration programmes have been affected by international and local travel restrictions associated with COVID-19.

Under the assumption of an extended period of health protocols, travel restrictions and depressed commodity prices, First Quantum’s main overall priority is the active management of all capital spending and operating costs while maintaining a high level of safety and productivity.

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