Panamanian Legislators Avoid Revoking First Quantum's Cobre Panama Contract

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--The National Assembly of Panama on Friday approved a moratorium on new metal mining concessions but stopped short of revoking First Quantum Minerals' (Vancouver, British Columbia) new Cobre Panama contract. The miner said its copper operations remained uninterrupted despite mounting protests.

The drama surrounding First Quantum's Cobre Panama mine continues. On Thursday, the National Assembly of Panama passed a law banning new concessions on the exploration, extraction and transportation of minerals. Legislators removed a section revoking First Quantum's mining contract.

Earlier this week, the country's president, Laurentino Cortizo, had called for a referendum in December to decide the fate of the mine. Nevertheless, the assembly has yet to discuss that request, and the electoral tribunal said there were no conditions to hold the vote.

Meanwhile, headwinds to First Quantum's contract are coming from the Panamanian Supreme Court of Justice, which is reviewing at least four lawsuits against the contract. The court could revoke the agreement signed earlier this year and bring an end to the concession.

At the same time, protests in Panama against First Quantum's Cobre Panama contract have intensified in the last few days, with several wounded and arrested.

On Friday, the Canadian miner said that operations remain uninterrupted despite the protests and blockades of key roads that have caused disruptions at the site and shortages of supplies.

Additionally, the company highlighted in its statement that "First Quantum is a responsible miner and takes its obligations in this regard very seriously. The company respects its legal obligations, both local and international, and conforms to high standards of ethical behavior in its business conduct. The company is also committed to the principles of integrity and transparency in its dealings with governments around the world."

The current outlook has triggered the collapse of First Quantum stocks in the market as uncertainty looms.

Cobre Panama is the country's largest copper mine and one of the biggest in the world. It represents about 4% of the nation's GDP, and more than US$10 billion has been invested in the asset.

Cobre Panama's production guidance of Cobre Panama for this year was updated to 365,000 to 375,000 tons, while production during the third quarter of this year stood at 112,700 tons, about 25% higher than during the second quarter and the highest quarterly volume in a year.

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