First Quantum Suspends Copper Concentrate Loadings at Panama Port in Export Row

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--First Quantum Minerals Limited (Vancouver, Canada) said this week it has suspended copper concentrate loadings at the Punta Rincon port in Panama, in the latest rift with government authorities.

First Quantum warned that its copper mine in Panama could shut down by mid-February, unless it is allowed to resume port loadings from its Cobre Panama copper mine.

The company said in a February 6 press release that it received a resolution on January 26 from the Panama Maritime Authority requiring the suspension of concentrate loadings, until evidence was provided that the certification of the calibration of the scales by an accredited company has been initiated. First Quantum said its Panamanian subsidiary submitted the required proof of the initiation of the certification process on February 3, but had yet to receive a response.

As a result, First Quantum said its subsidiary, Minera Panama S.A. (MPSA), has suspended loading operations while it awaits a response from the Panama Maritime Authority.

"It will be to the detriment of Panama, the mine's employees, suppliers and the broader Panamanian economy if the government of Panama forces MPSA to shut Cobre Panama, which may become necessary if concentrate is not shipped by mid-February due to limited storage capacity on site," First Quantum said in a press release.

The Panama Maritime Authority's resolution "is part of a series of escalating attempts by the government to pressure the company into accepting a refreshed (mining) concession contract on the government's terms," First Quantum said.

Despite concession talks that began in late December, the parties have been unable to reach a deal. In January, the mining company's chief executive officer said that conversations with Panama were ongoing and that First Quantum was willing to meet the government's demands on revenues, environmental protections and labor standards. Among the most important aspects was the minimum $375 million per year in government income, a profit-based mineral royalty of 12% to 16%, and corporate taxes.

First Quantum maintained it was eager to negotiate and not risk operations at the mine.

The government has asked for First Quantum to submit a plan to place the mine under care and maintenance, which is the process used to keep operations at a minimum to allow a quick restart after issues are resolved.

Finally, the company has condemned the changes in the government's position regarding the concession on the mine and its possible impact on the $10 billion investment.

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