First Quantum to seek talks with Panama’s Mulino on closed mine
First Quantum Minerals will seek talks with Panama’s incoming president in an effort to resolve the dispute that shuttered the Cobre Panama copper mine.
President-elect Jose Raul Mulino, seen as an investor favorite, has said little about First Quantum’s $10-billion mine, which closed last year following months of civil unrest. But his pro-business credentials and historical support for the mining industry are raising hopes for a reopening.
“We look forward to a dialogue with the new administration and to working together once it takes office to find a resolution that is in the best interests of Panama,” First Quantum wrote in a statement Monday.
Mulino takes office July 1.
The $10-billion copper mine has been idle since December after outgoing-President Laurentino Cortizo ordered its closure following a Supreme Court ruling that invalidated a contractual agreement. The project represented 5% of Panama’s gross domestic product and the shutdown wiped out more than half of the miner’s market value.
Mulino’s victory is a “good outcome” for First Quantum, wrote Royal Bank of Canada analyst Sam Crittenden in a note, though “there is still uncertainty around Cobre Panama with work to be done to improve public sentiment towards mining and negotiations with the new government before contemplating a re-start.”
The election result “is not likely to accelerate discussions related to reopening the mine,” National Bank of Canada analyst Shane Nagle wrote in a note. “Highlighting persistent headwinds in country were comments made last week by Trade Minister Jorge Rivera that the company would be barred from extracting copper during the closure and questioned the company’s ability to sell existing concentrate stockpiles on site.”
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