Tag Archives: Tristan Pascall

First Quantum and Panama Government agree on draft contract for Cobre Panama

First Quantum Minerals Ltd and its Panamanian subsidiary, Minera Panamá, S.A. (MPSA), have agreed and finalised the draft of a concession contract with the Government of Panamá related to continuing operations at the Cobre Panamá copper-gold mine.

The Proposed Concession Contract meets the objectives outlined by the Panamanian Government in January 2022 related to government revenues, environmental protections and labour standards, according to FQM. It also provides legal protections necessary to both parties to ensure durability and stability.

The contract is subject to a 30-day public consultation process and approvals by the Panamanian Cabinet, Comptroller General of the Republic and the National Assembly. The Proposed Concession Contract will have an initial 20-year term, with a 20-year extension option and additional extensions for the life of mine.

Additionally, the Panamá Maritime Authority has confirmed it will issue a resolution today for MPSA to resume concentrate loading operations at the Punta Rincón port. Loading operations were halted back in January with FQM saying the reason was tied to allegations its scale was improperly calibrated. Soon after this, First Quantum halted ore processing operations, saying the action was a result of the Panamá Maritime Authority’s refusal to permit copper concentrate loading operations at the mine’s port, Punta Rincón, in accordance. Ore processing is expected to resume and restore the mine to full production levels over the next several days.

The two companies have been engaged in a long-running contract dispute that hinges on disagreements over tax rates and royalties at the Cobre Panama mine.

The proposed contract will include the following principal economic terms once it takes effect:

  • Payment by MPSA of $375 million plus an additional $20 million to cover taxes and royalties up to the year-end 2022
  • Payment by MPSA starting in 2023 of an annual minimum contribution of $375 million in government income, comprised of corporate taxes, withholding taxes and a profit-based mineral royalty of 12 to 16 percent, with downside protections;
  • Downside protections to the annual minimum contribution under the following conditions:
    • Until the end of 2025, copper price below $3.25 per pound; and
    • From 2026 and beyond, a total tax contribution for that year of less than $300 million.
  • Applicable royalty rate (the operating margin and the effective royalty rate) at various operating margins as shown below:
    • 0-20% – 12%
    • >20-30% – 13%
    • >30-40% – 14%
    • >40-50% – 15%
    • > 50 – 16%
  • Application of the general regime of income tax, including deductions for depletion, and withholding taxes in Panamá.

Tristan Pascall, Chief Executive Officer, said: “After a lengthy and arduous negotiation process, the finalised Proposed Concession Contract outlines the basis for the future of Cobre Panamá for all stakeholders, including the government, our investors and the country of Panamá. I am pleased that we now have a pathway to continuing our ongoing substantial investments in the country. I wish to thank our Panamanian and international employees and their families and our suppliers for their patience and resilience during this time. We now await formal approval of the Proposed Concession Contract and look forward to a long and constructive partnership with the Government of Panamá for many years to come.”

First Quantum and AES sign renewable energy deal for Cobre Panama

First Quantum Minerals’ majority-owned Cobre Panama operation has signed a long-term contract with AES Panama for the supply of renewable energy, starting in January 2024.

The agreement establishes that the energy supplied by the electricity generation company to the copper mine will be certified renewable energy from solar, wind and hydroelectric sources.

The CEO of First Quantum Minerals, Tristan Pascall (right), and the President of AES Panama, Miguel Bolinaga, gathered to sign the contract (pictured).

“As a responsible mining company, we recognise our obligation to contribute to the management and mitigation of climate change and part of our contribution is through a transition to clean energy sources in our operations, including Cobre Panamá,” Pascall said.

“The global need to accelerate the transition to the use of cleaner energy will require an increase in the production of minerals and metals, such as copper, used in solar panels, wind farms and electric vehicles. This agreement for the energy transition of our operations is also a logical step to increase the sustainability of our production.”

Miguel Bolinaga, President of AES Panama (left), said: “One of the main goals of AES at a global and local level is to lead the energy transition, which is why for us offering cleaner energy solutions to our clients is a priority.”

The Operations Superintendent of the Panama Copper Power Plant, Boris Batista, said the agreement with AES would cover the plant’s need for more power, and that all this additional power – 64 kW – would come from renewable energy sources.

Other steps would follow in the process of reducing carbon emissions at Cobre Panama. By 2025, 30% of the energy used in Cobre Panama’s operations is expected to come from renewable sources. For its part, the First Quantum Minerals group plans to reduce its carbon emissions in its global operations by 50% by 2030.

First Quantum board signs off development of Kansanshi S3 Expansion, Enterprise nickel project

The First Quantum Minerals Ltd Board of Directors has signed off on the S3 Expansion at the Kansanshi mine and the Enterprise nickel project, both in Zambia.

The approval will lead to work on both projects starting immediately, with the company re-commencing detailed engineering works for the S3 Expansion to determine purchase orders for key long-lead items, including the SAG mill, ball mill and in-pit crushing station; and a mining contractor being mobilised for the Enterprise nickel project in order to commence pre-stripping of the pit in June 2022.

This could see Kansanshi’s life pushed out to 2044 with the introduction of new electrical loading and drilling equipment along with the extension of the current electric trolley assist infrastructure, with Enterprise contributing some 30,000 t/y of nickel concentrate in upcoming years.

“First Quantum has been working constructively with the Government of Zambia’s New Dawn administration as part of their efforts to reform the mining sector, attract investment and increase Zambia’s copper production,” Tristan Pascall, Chief Executive Officer, said. “The approval of the projects reflects First Quantum’s increased confidence in the investment climate in Zambia.”

The S3 Expansion and the Enterprise nickel project are a key part of the company’s brownfield growth strategy, according to Pascall.

“The Kansanshi mine has been a cornerstone asset for First Quantum for 15 years and the S3 Expansion will expand production and extend the mine life for another two decades,” he said. “The low-cost, high-grade Enterprise nickel project is well placed to supply the rapidly growing electric vehicle battery sector.

“The approval of these two projects is an important milestone for the company’s path towards responsible production growth of the metals needed for the global green energy transition.”

The approval of the projects follows the efforts of the New Dawn administration to enhance both the investment climate for mining and to seek commitments from the mining sector to contribute to the national economy and to corporate social responsibility, First Quantum says. These initiatives will help establish a platform for more stable, durable and responsible mining in Zambia.

The Government of Zambia’s commitments address the ease of doing business in Zambia, covering areas such as expediting immigration procedures in exchange for commitments for local employment levels, competitive pricing of power transmission and power procurement from independent sources which in turn will support renewable energy projects, and measures to ensure the ease of importing and exporting goods.

The approvals follow the re-introduction of the deductibility of mineral royalties for corporate income tax assessment purposes that became effective in January. This measure realigned Zambia with international best practice, according to First Quantum. The government’s commitment to improve the predictability of the mining fiscal regime also provides the certainty needed to support large capital investments in Zambia.

“Furthermore, First Quantum and the government have successfully resolved all points of contention that have been stumbling blocks to progress on the S3 Expansion and Enterprise nickel project,” it said. “This includes reaching agreement in respect to the outstanding value-added tax receivable sum and an approach for repayment based on offsets against future mining taxes and royalties.”

The S3 Expansion is expected to transition the current selective high-grade, medium-scale operation to a medium-grade, larger-scale mining operation that will be more appropriate for the higher proportion of primary, lower-grade sulphide ores at depth, First Quantum said. As outlined in the NI 43-101 Technical Report filed in September 2020, the S3 Expansion, when completed, will comprise of a standalone 25 Mt/y processing plant with a new larger mining fleet that will increase Kansanshi’s total annual throughput to 53 Mt/y.

Once the expansion is completed, copper production from Kansanshi is expected to average approximately 250,000 t/y for the remaining life of mine to 2044.

A significant portion of the initial construction works for the S3 Expansion have been previously undertaken with much of the civil and structural work on-site completed, First Quantum said. The remaining work includes completion of the remaining engineering design works, procurement and installation of equipment, electrics, controls and infrastructure. The S3 processing train will comprise of a 28 MW SAG mill and a 22 MW ball mill. The open-pit mine will be expanded to increase the supply of sulphide ore from the Main Pit and extend into the South East Dome deposit. The expanded mining fleet will use similar ultra-class equipment as First Quantum’s other key mines and will benefit from new electrical loading and drilling equipment along with the extension of the current electric trolley assist infrastructure, First Quantum said.

In parallel with the expansion of the mine and processing facilities, the company plans to increase the throughput capacity of the Kansanshi smelter from 1.38 Mt/y to 1.65 Mt/y of concentrate. This will enable the smelter to produce over 400,000 t/y of copper anode.

The total capital expenditures associated with the S3 Expansion is expected to be $1.25 billion, which includes $900 million on the S3 plant and mine fleet and $350 million for pre-stripping of the South East Dome pit. Approximately $800 million of this spending is included in the company’s current three-year guidance released on January 17, 2022, with the balance falling beyond the guidance period. First production from the S3 Expansion is expected in 2025.

The Enterprise nickel sulphide deposit is located 12 km northwest of the Sentinel copper mine. As outlined in the NI 43-101 Technical Report, filed in March 2020, proven and probable reserves at Enterprise total 34.7 Mt of ore at 0.99% Ni.

The Enterprise nickel project will consist of a single, main open pit and one extension to the southwest. It will use the existing 4 Mt/y nickel circuit that was previously built as part of the original Sentinel processing complex. The main workstream to bring the project online will be the pre-strip of waste. The development timeline for Enterprise is expected to be approximately 12 months. At full production, Enterprise is expected to produce an average of 30,000 t/y of nickel in high-grade concentrate.

The total capital expenditures associated with the Enterprise nickel project is expected to be approximately $100 million. Pre-stripping of the Enterprise pit of $60 million is included in the three-year guidance provided earlier this year along with $40 million related to infrastructure and plant commissioning. Expected first nickel production of 5,000-10,000 t of nickel in 2023 is included in the company’s three-year guidance.

Tristan Pascall to take the First Quantum reins in May 2022

First Quantum Minerals has announced that its Board of Directors will appoint Tristan Pascall, currently the company’s Chief Operating Officer (COO), to the role of Chief Executive Officer (CEO).

The appointment will take effect at the Annual General Meeting to be held in early May 2022, at which time Philip Pascall (Tristan’s father), the company’s current Chairman and CEO, will retire from the CEO role and will continue to serve as Chairman of the Board. The company will nominate Tristan Pascall for election as a director at the AGM.

The appointment of Tristan Pascall represents the culmination of a succession planning process led by independent directors on the Board’s Nominating and Governance Committee, comprised of Robert Harding, Andrew Adams and Kathleen Hogenson.

Robert Harding, Chair of the Nominating and Governance Committee and Lead Independent Director, said: “After a thorough search process, we are very pleased to appoint Tristan Pascall as First Quantum’s next Chief Executive Officer. Tristan has demonstrated impressive leadership in his current role as COO as he navigated the successful ramp-up of our largest asset through the challenging environment presented by the global pandemic.

“Tristan’s previous hands-on leadership experience of eight years in Zambia and four years in Panama has given him a deep knowledge of our assets, operating teams and local partners. His practical, on-the-ground experience with our people and projects, combined with lessons learned from the countries where we operate, embodies the company’s culture and makes Tristan the right leader for First Quantum.

“We believe Tristan’s combination of operational, strategic and capital markets experience, as well as the strong stakeholder relationships he has developed, are fundamental to the continuity of our unique core capabilities, namely industry-leading project execution and operational excellence.”

Tristan Pascall joined First Quantum in 2007 and held progressively senior operational roles in Africa and Latin America until 2020 when he served as Director of Strategy and later became Chief Operating Officer in January 2021. Prior to assuming his executive leadership roles, he was a key member of the teams that delivered on several major greenfield and expansion mining projects which now collectively represent most of the company’s net asset value, FQM said. His responsibilities from 2009 to 2015 included the initial development, construction and operating the Sentinel mine in Zambia. Starting in 2015, he led the development of the Cobre Panama mine (pictured), now the company’s largest copper mine with the world’s largest single-throughput copper concentrator plant, and built the operations team which now stands at more than 5,000 people.

Prior to joining First Quantum, Tristan spent eight years in corporate finance and investment banking with a focus on resources and heavy industry in Australia, Europe and Asia.

Tristan Pascall said: “I am very excited to continue to build upon the momentum we have established at First Quantum. It is deeply humbling to be selected to lead such a highly talented team, all of whom have contributed to establishing a unique entrepreneurial culture. As we enter our next stage of growth, I look forward to building on First Quantum’s accomplishments of the past two decades.”

Philip Pascall co-founded First Quantum Minerals in 1996 and has served as its CEO and Chairman ever since. He retires as one of the longest-serving CEOs among the world’s major mining companies. Over the course of his stewardship, the company has grown from the construction of the Bwana Mkubwa project in Zambia designed for 10,000 t/y of copper production, to become the world’s sixth largest copper producer. First Quantum has operations on five continents, employing more than 20,000 people and producing over 800,000 tonnes of copper annually.

Harding said: “On behalf of the entire company, I would like to thank Philip for his extraordinary leadership. Over the span of a quarter century as CEO, Philip has demonstrated a capacity to solve problems others could not and to bring unique solutions to complex project issues. The Board believes his ongoing involvement as Chairman will be a significant competitive advantage and form a uniquely complementary combination with Tristan’s hands-on, collaborative leadership style.”