Future of First Quantum mine is for the people of Panama to decide, US official says

6th March 2024 By: Reuters

Future of First Quantum mine is for the people of Panama to decide, US official says

TORONTO - A dispute between First Quantum Minerals and Panama over the Canadian company's flagship copper mine in the Central American nation is an issue for the people of Panama to decide, a top US official told Reuters.

In a surprise move late last year, Panama ordered the closure of Cobre Panama mine, one of the biggest and the newest copper mines in the world, which accounted for about 40% of First Quantum's revenue in 2023.

"We have followed the case, and it is an issue for the Panamanian people to decide... and I know it is a situation where some communities, not all have expressed opposition," Jose W. Fernandez, US under secretary for economic growth, energy and the environment said late on Monday.

Fernandez was responding to Reuters' question whether the US, which has close relations with Canada and Panama, had taken up the issue of weakening investment climate in the Central American country.

“The US and Canadian governments have been very supportive but we do not comment on specific discussions,” First Quantum said in reply to a Reuters query on whether it had asked Canada or US to intervene in the issue.

The company is seeking $20-billion through international arbitration from Panama over the mine closure order.

Canadian Trade Minister Mary Nag said in February the government aims to support First Quantum "as best as it can" without elaborating.

Panama holds presidential elections in May, and the future of Cobre Panama mine has emerged as a flash point among opponents and supporters of the mine.

First Quantum shares have lost about half their value since the street protests and last month it announced a series of capital restructuring measures to reduce debt.

Without specifically referring to Panama, Fernandez said that communities need to be convinced they will benefit from mining.

On Monday, the US and its thirteen allies announced a critical minerals partnership to only support projects that follow high environmental, social and governance standards, Fernandez said.

But he said the initiative is not an attempt to force developing countries to choose one country over the other, but to provide alternative.

Currently over 90% of the world's critical mineral supply chain is dominated by China, and western countries have expressed the need to diversify the supply chain in critical metals.