Does anyone remember the discussions in February, in Parliament, when Jeremy Allen from First Quantum Minerals threatened that investors would stop developing the Zambian copper industry if new taxes were imposed unilaterally? Have a look at an old blog here.
I was just wondering, because Bloomberg today report that first-quarter profits for First Quantum more than doubled because of higher output and prices. Net income climbed to $182 million, or $2.65 a share, from $78.3 million, or $1.14, a year earlier. Net sales nearly doubled to $512 million. Making that kind of money it will be interesting to keep an eye on second quarter reports (i.e. after the new reguime kicks in)
The decisive factor in profits is, of course, not the local tax regime, which remains highly competitive. Rather, copper on the London Metal Exchange was 30 percent higher, on average, in the first quarter compared with a year earlier, and reached a record $8,880 a metric ton on April 17. First Quantum's total copper output may rise 32 percent to 310,000 metric tons in 2008, from 226,693 tons in 2007, Newall said on Jan. 22.
That estimate was higher than the 300,000 tons previously forecast because of better-than-expected performance at the Kansanshi mine in Zambia. Kansanshi yielded 52,303 tons in the first quarter, accounting for 69 percent of the company's total copper output in the period. Commercial copper production at First Quantum's Frontier mine in Congo, which began in November, will be about 84,000 metric tons in 2008, the company said. The earnings results were released after the close of regular trading on the Toronto Stock Exchange, where First Quantum fell 87 cents to C$91.35 at 4:17 p.m. The shares have risen 7.4 percent this year.
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