China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
Canada’s First Quantum Minerals (TSX:FM) (LON:FQM) said Thursday it is selling its nickel, copper and platinum-group metals Kevitsa mine in Finland for $712 million to Boliden AB, as part of ongoing efforts to reduce debt.
The Swedish mining and smelting company will pay cash for the mine that has nickel, copper and platinum-group metals, subject to customary adjustments, First Quantum said. The sale requires regulatory and antitrust approvals and is expected to be completed in May.
First Quantum aims to reduce its net debt by more than $1 billion by the end of the first quarter through asset sales and other means.
“This transaction is one of the initiatives within our plan, announced in October 2015, aimed at strengthening the company’s balance sheet and improving its capital structure,” Toronto-based First Quantum’s Chairman and CEO, Philip Pascall, said in the statement. “We are continuing to advance other strategic initiatives, which are expected to be finalized at various times over the next several months, to meet those objectives.”
Last month, First Quantum warned it was struggling to manage its massive debt load amid very weak base metal prices. The miner aims to reduce its net debt by more than $1 billion by the end of the first quarter through asset sales and other means.
The company is currently focused on developing its Cobre Panama project, to begin production in 2018, which is expected to cost around $6bn and produce around 320,000 tons of copper, 100,000 ounces of gold, 1.8m ounces of silver and 3,500 tons of molybdenum by-products over a 34 year mine life.
