First Quantum further slows operations at Panama mine

20th November 2023

By: Reuters


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Canadian miner First Quantum Minerals on Monday said it has further reduced ore processing at its mine in Panama, as blockades at a local port have disrupted shipments of supplies needed to power operations.

Without shipments arriving at the mine’s Punta Rincon port, the company expects to run out of supplies for the on-site power plant this week.

The port blockade is part of ongoing protests which began after the Panamanian government and First Quantum signed a new contract on October 20 for Cobre Panama, a major copper mine operated by the company's local unit Minera Panama (MPSA). The mine contributes 1% to global copper production and 5% to Panama's gross domestic product.

The demonstrators say the new terms are too generous to First Quantum and allege corrupt practices in the approval of the contract. The company has denied the allegations.

If the "illegal actions" continue to prevent the delivery of supplies necessary to operate the power plant, MPSA will ramp down the remaining processing train this week and temporarily halt production, the company said in a statement.

The company, which had reached a deal on wages with the labor union earlier this month, said MPSA has made a tax and royalty payment of $567 million for the period from December 2021 to October 2023 to the Republic of Panama.

First Quantum's market capitalisation has fallen about 45% since the protests started in late October.

Panama's top court will, possibly as soon as mid-December, decide whether to revoke the contract. A Reuters survey earlier in November found that a majority of lawyers believe that the court would likely revoke the contract.

Canadian miner Franco-Nevada FNV.TO, which holds a stake in the Cobre mine, on Monday lowered its production outlook for the current year, hit by reduced operations in Panama.

Edited by Reuters



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