Canadian copper producer First Quantum Minerals Ltd. has reached an agreement with China's Jiangxi Copper Co Ltd., its second largest shareholder, which limits Jiangxi's ownership of the Canadian copper producer. This is stated in the message of First Quantum.
First Quantum stated that the shareholder rights agreement prohibits Jiangxi from buying more shares of the company or selling a stake of 5% or more without First Quantum's consent.
The three-year agreement also gives Jiangxi the right to nominate one person to the board of directors for consideration by the First Quantum management committee.
According to a Jiangxi representative, the new agreement does not limit the Chinese company's ability to acquire assets from First Quantum. Acquiring and investing in overseas mining assets is the company's primary objective, and it will evaluate projects based on factors such as prices and government policy impediments to China, the representative said.
The agreement came as a result of the Canadian government's efforts to curb Chinese investment in the critical minerals sector. Earlier, the government said it would approve foreign acquisitions of Canadian mining companies only in "the most exceptional circumstances."
Canada and its Western allies are increasingly concerned about securing critical minerals needed to produce goods ranging from batteries for electric vehicles to electronics, prompting them to push for supply chain development to weaken China's global dominance in the industry.
Jiangxi (PRC), one of the largest copper smelting companies in the world, owns 18.5% of First Quantum shares and acquired additional shares worth $212 million in January 2024.
First Quantum is a mining company that produces precious and non-ferrous metals in Zambia, Panama, Finland, Turkey, Spain, Australia and Mauritania. The headquarters is located in Vancouver. The largest shareholder is the Chinese company Jiangxi Copper.
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