First Quantum guides to new record copper output in 2022, adopts dividend policy

Copper pour

FIRST Quantum Minerals forecast copper production in 2022 of between 810,000 to 880,000 tons increasing to between 840,000 and 910,000 tons next year with some 55% derived from its Zambian assets in the current financial year.

The Kansanshi and Sentinel mines were forecast to produce between 190,000 and 210,000 tons and between 260,000 and 280,000 tons respectively in 2022.

Copper production for 2021 of 816,000 tons was First Quantum’s highest ever largely owing to the performance of Cobre Panama, the company said in an update today. The two Zambian mines both recorded lower production year-on-year.

At Sentinel, full year production output of 233,000 tons was 18,000 tons lower owing to a ball mill failure in the first quarter and lower grades. Kansanshi reported 19,000 tons lower production reflecting the depleting oxide in the maturing mine.

Capital cost guidance has increased to $1,25bn in 2023 and 2024 and $1,38bn in 2024, principally due to inflationary pressures.

First Quantum, which this year gets a new CEO in the shape of Tristan Pascall, also unveiled a dividend policy in which it would pay 15% of available cash flow generated after capital spending and distributions to non-controlling interests.

Within the performance dividend, there is expected to be a minimum annual base dividend of 10 Canadian cents a share comprising of biannual dividends of five Canadian cents per share, the company said.

First Quantum said it would on track to reduce debt its previously announced by $2bn, but it had also increased its short-term debt reduction by $1bn.

The company also produced an inaugural climate change report in which it said it would reduce greenhouse gas emissions 50% by 2030