First Quantum Minerals (FQM) has reportedly offered to buy Government’s 20 percent shares stake in the mine for $700 million.

According to Bloomberg News, the deal would also include ZCCM-IH dropping a $1.4 billion legal claim against First Quantum over a loan the company received from Kansanshi. The government is still considering the proposal, according to one of the mining sources.

However, the Private Sector Association of Zambia (PSDA) has described the US$700 million offer by FQM for Government’s 20 percent shares in the mine as insulting, because the amount was peanuts.

The association has said accepting such an offer would be undervaluing its assets and shareholding in FQM.

PSDA chairperson, Yusuf Dodia, said if Government was going to consider the offer, it should be at least US$20 billion.

Mr Dodia explained that an offer of US$20 billion meant that FQM would have recovered what they were paying Government in a period of 10 years.

He was speaking in an interview yesterday.

“The US$700 million is peanuts because FQM is probably exporting in excess of a billion dollars a year in copper so it will just represent one or two years of the exports earnings for the entire mine.

“Government needs to look into the long term gains and remaining a shareholders offers those gains but if Government was going to consider the offer it should be at least US$20 billion because they would recover what they are paying Government in a period for 10 years not something they can recover a year,” he said.

Government, Mr Dodia said, should keep the 20 percent shareholding saying “It should not budge, it should refuse selling the shares.”

“I think Government should hang in there, keep the 20 percent and enjoy the fact that it is for the success of the mine and that they are keeping the equity for the people of Zambia.

“I am very sure that Government has the golden share which determines the partners who can come on board and the future of the mining company.

That is a very important responsibility the Government should be maintaining on behalf of the people of Zambia. So I believe that we should not sell,” Mr Dodia said.

FQM this week offered to buy Government’s 20 percent stake in Africa’s biggest copper mine for as US$700 million.