First Quantum Minerals Ltd.’s share price dropped more than 30 per cent on Wednesday on news that its Cobre Panama mine may get a second life on its way to winding down operations for good. In a report released Wednesday, a Panamanian commission recommended that President José Raúl Mulino’s government negotiate with the Canadian mining company to restart production at its open-pit copper mine under a framework that would self-finance the site’s future closure and rehabilitation. Cobre Panama, located about 120 kilometres outside of Panama City, was a key piece of the country’s economy before it closed in November 2023. The mine contributed around five per cent to Panama’s gross domestic product (GDP) and employed more than two per cent of the country’s total workforce, according to First Quantum’s website. The mine was also a moneymaker for First Quantum and previously accounted for 40 per cent of the company’s revenue. Cobre Panama closed after local protests and a ruling from the country’s Supreme Court declaring that a 20-year operating concession granted to First Quantum was unconstitutional. Its shutdown delivered a negative shock to Panama’s exports, government revenue and GDP growth, and the commission’s report said 6,000 direct jobs and 30,000 indirect jobs were lost. Since then, the mine has sat in a state of temporary “reservation and safe management.” This means we are working with a smaller team to implement environmental stability and asset integrity measures as we continue to manage the mine safely and responsibly,” First Quantum says on its website. With the commission’s report in hand, next steps and final decisions around Cobre Panama’s fate is up to President Mulino. First Quantum said to seek sale of stake in giant copper projectFirst Quantum could be a step closer to reopening giant Panama copper mine In a statement, First Quantum acknowledged the commission’s recommendations and said it is awaiting guidance on next steps from Panama’s government. “First Quantum recognizes that a new agreement must respect Panama’s sovereignty, democratic institutions and the Government-led process,” the company said. “First Quantum will engage constructively and in good faith with the objective of establishing a legal framework for Cobre Panamá that is fair, transparent, durable, and aligned with Panama’s Constitution and laws.” • Email: jswitzer@postmedia.com
Commission recommends First Quantum restart copper mine to fund future wind-down
