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LUSAKA Feb 8 Canada's First Quantum Minerals plans to invest over $1 billion in a new smelter and modernisation of a copper mine in Zambia, a senior Zambian official said on Wednesday, but the company said the investment was "very conditional".
Zambia's high commissioner (ambassador) to South Africa Emmanuel Mwamba told Reuters by telephone that First Quantum Minerals Chief Executive Officer Phillip Pascal had announced the investment on Wednesday when he met Zambian officials attending a mining conference in Cape Town.
First Quantum planned to invest $700 million in a new smelter whose location the company did not specify and $350 million would be invested in modernising its Kansanshi copper mine, Mwamba said.
"These are fresh investments which should help boost Zambia's economic growth," Mwamba said.
First Quantum owns 80 percent of the operator of Kansanshi, Africa's largest copper mine in northwestern Zambia.
Clive Newall, First Quantum's president, told Reuters in Canada that the possible new investment was "very conditional".
"Our intentions are at some point to invest a lot of money," Newall told Reuters by telephone, without confirming the $1 billion figure.
"But there are a number of conditions that need to happen before we do that, some of which are our own, you know balance sheet issues," he said. "Some are practical: We are building a very major project in Panama, which is taking up a lot of our energy."
"We need demonstrable fiscal stability in Zambia over a period of time before we do it," he said, summarising what he said First Quantum had told the Zambian officials.
Zambia proposed measures in November to curb its budget deficit at a time when slumping commodity prices have seen the country face mine closures, rising unemployment, power shortages and soaring food prices.
First Quantum had invested $5.7 billion in Zambia as of 2015 with $2.6 billion going into the Kansanshi Mine, $1 billion in the Kansanshi smelter and $2.1 billion in the Trident Project, which includes the Sentinel and Enterprise mines.
First Quantum has asked a Zambian court to dismiss a $1.4 billion claim by a state-owned firm, which accused the Canadian company of irregular transactions with its local subsidiary, according to court papers. (Reporting by Chris Mfula; Additional reporting by Nicole Mordant in Toronto; Editing by James Macharia and Adrian Croft)