Let the acquisitions roll!
For its part, Lumina is happy with the proposed acquisition. The company’s founder,
Encouraging shareholders to vote in favor of the transaction, Beaty also noted that First Quantum is “the most capable company in the world to develop Taca Taca into a major copper mine,” adding that “[t]his transaction provides Lumina shareholders with the option to retain exposure to Taca Taca’s future development in the hands of a world class mine development and operating team through ownership of First Quantum’s shares.”
Likewise, First Quantum Chairman and CEO
Furthermore, Pascall sees Taca Taca as significantly adding to First Quantum’s development pipeline, particularly because it is at the stage where the company can “apply [its] resources and development expertise to realize its full potential and further add to First Quantum’s copper production profile.”
Why this is important
The recent slowdown in equity markets, along with changes in management at many major producers and widespread slowdowns in spending, have together led to a lack of projects being brought online.
This lack of new development projects presents a problem for copper supply. Specifically, the future looks to hold a deficit that will impact the market in the latter half of the decade.
“When we look at copper, demand continues to grow very steadily,”
Lennon went on to explain that there aren’t very many large-scale projects being developed worldwide, and with demand growing by more or less 700,000 or 800,000 tonnes a year, “over a five-year period you will need upwards of 10 major projects [to come online].”
Echoing Lennon’s statement, Stefan Iaonnou from
That said, one issue currently impacting the copper market is low prices, which have resulted in both a lack of attractiveness to potential investors and difficulty for companies attempting to secure financing. So, when a company like First Quantum sees the potential and value of acquiring a company like Lumina, it indicates an important commitment to copper’s long-term potential.
Securities Disclosure: I,
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