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Zambia to buy gold from First Quantum Minerals for foreign reserves

Christian Fernsby |
The Bank of Zambia will begin buying gold from Canadian miner First Quantum Minerals as it resumes holding the precious metal as part of its foreign reserves, the central bank governor and a company executive said on Friday.

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Topics: ZAMBIA   

The southern African nation a major copper producer became Africa's first pandemic era sovereign default last month after it failed to pay a coupon on one of its dollar denominated bonds.

"During periods of market stress when assets would be losing value gold would be adding value, thereby shielding the whole portfolio from large losses," Bank of Zambia Governor Christopher Mvunga said.

Under an agreement signed between the central bank and First Quantum, a Toronto listed copper miner, Zambia will buy gold from the company's Kansanshi copper mine.

First Quantum Director of Operations Rudi Badenhorst called the agreement an important step in building financial resilience in Zambia.

He added that the company was in talks with Zambia's government to incentivise large scale mining.

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