Essential reading
Fresh off my KvN KAT Blog over at Seeking Alpha, essential reading this Patrick Smith piece published today. I classify it as important as it very succinctly summarises exactly what has happened on the Central African Copperbelt and where Glencore, the Chinese, Zambia & DRC presently sit.
https://www.theafricareport.com/17266/china-africa-copperbelt-key-to-the-race-for-the-21st-century/
Unverifiable, but entirely probable, is this passage quoted from Smith's piece: "Jiangxi Mining has quietly purchased about 9.9 % of FQM, listed on the Toronto Stock Exchange. Its purchases have come through derivatives and direct stock purchases and have so far cost about $800 million. It would take about $2 billion to give Jiangxi a shot at majority control."
As a fellow African Copperbelt boy, and copper miner, I have long wondered about what Phil Pascall's end-game was going to be. He and Clive Newall have been at the helm of First Quantum for numerous years, through both up and down cycles and including a near-death experience with FM's lenders back in January 2016 when this once mighty +$50/share mid-tier copper producer could be purchased for under $3/share. If indeed Jiangxi are at 9.9% (the threshold for legally reporting ownership blocks on the Canadian TSX commence begins at 10%) this could foretell the end for those boys and maybe one internally sanctioned and supported by their BoD.
They will all walk away very, very rich men and walk away too, from Zambian tax squabbles, seemingly never-ending African graft scandals, as well as all the other, sometimes insurmountable challenges Mine Builders face. Daily. It's extremely challenging and I think those boys are some of the best Mine Builders in the business... but they are all a lot older now and maybe just tired and now more than ever, a little fed up.
Also up for discussion and conjecture, is Smith's claim that Glencore are preparing it's Mutanda and KAT units for sale: "Glencores Zambian mine Mopani may be ready for auction. Industry insiders say Glencores two majority-owned DRC companies Mutanda and Toronto-listed Katanga Mining, which operate the Kamoto Copper Project, are being prepared for sale".
Smith doesn't name his "industry insiders".
I'm not sure about GLEN giving up just yet. Their 1st big move (shutting in Mutanda) has already benefitted the underlying commodity price by +30%, so why walk now? Upside from here is another $15k/t on the LONG TERM cobalt price according to Citi (and others) so perhaps a treble still on the KAT sp? But we civilians aren't party to what the DoJ (and others) are going to wring out of Glassenberg, his lieutenets & GLEN due to that companies alledged prior, corrupt behavior.
These are my views only. Thanks for reading.
NB: at the point KAT breaks past my ASP (68c CAD) I will be winding up my Seeking Alpha KvN KAT Blog.