Iron ore price rises on pre-holiday restocking, China stimulus hopes
"Winter restocking of iron ore among steel mills is still underway, so we believe ore prices will find some support in the near term," analyst says.
Jiangxi Copper, First Quantum’s (TSX: FM) largest shareholder, has increased its stake in the Canadian miner, which is still reeling from the heavy losses caused by uncertainty regarding the future of its flagship copper mine in Panama.
The Chinese miner grew its interest in First Quantum to 18.5% from 18.3%, after buying a total of 1.35 million shares this week.
Panamanian legislators were very close to cancelling the Vancouver-based miner’s recently ratified 20-year contract to operate the giant Cobre Panama copper mine. After three consecutive days of extraordinary meetings, the Congress chose to leave the decision or whether or not kill the agreement to the Supreme Court.
Jiangxi Copper stopped short of securing a 20% interest in First Quantum because the company adopted a poison pill takeover defence in 2020. The move aimed at adding a barrier to potential plans by the Chinese company to buy more than 20% stake.
Shares in First Quantum have recovered some of the losses suffered a week ago, last changing hands at C$16.67, but still far from the C$27.96 they closed the day before an explosion of populist rage among Panamanians rocked the company and forced authorities to backpedal on the signed deal.
The company, Canada’s largest producer of the coveted metal, produced 816,000 tonnes of copper in 2021, its highest ever, thanks mainly to record output at Cobre Panama.
The mine, in production since 2019, contributes almost 5% of the country’s GDP. It also makes up 75% of Panama’s export of goods and has created at least 40,000 jobs, directly and indirectly.
