First Quantum Minerals announced that Jiangxi Copper will have the right to nominate one individual to its board of directors. This decision comes as part of a new shareholder rights agreement (SRA) aimed at maintaining a cautious distance from its largest shareholder.
Under the terms of the SRA, Jiangxi has agreed to a customary standstill restriction, preventing it from acquiring additional shares of First Quantum while the agreement is active and for six months thereafter. Additionally, Jiangxi has committed not to sell its shares in a block deal and will not withhold its vote on director nominees put forth by First Quantum’s management or oppose any board decisions, except those concerning the acquisition of First Quantum shares by third parties.
As of March 2024, Jiangxi held an 18.5% stake in First Quantum, according to regulatory filings. Although Jiangxi has been a significant financial supporter of First Quantum, their relationship has been strained since 2019, when Jiangxi attempted to acquire a majority stake in the Canadian miner. This led First Quantum to implement a poison pill strategy to fend off a potential takeover.