Canada’s First Quantum Minerals has announced a temporary suspension of operations at its Cobre Panama mine due to ongoing protests. The mine, one of the world’s largest and newest copper mines, relies on coal supplies for power, which are currently blocked by demonstrators opposing the government’s contract with the mine.
The suspension of production, set to begin on November 23, comes as a result of the inability to operate the mine without a stable power supply. Copper prices saw a two-month high in response to the news, while the company’s stock experienced a decline of up to 5.7%. Despite this setback, the benchmark Canada index rose by 0.4%.
Protests have intensified since First Quantum and the government entered into a new contract for the Cobre Panama concession on October 20. The mine, responsible for 1% of global copper production and 5% of Panama’s gross domestic product, has become a focal point for activists concerned about environmental impacts and alleged corruption in the approval process.
The ongoing demonstrations have resulted in a blockade preventing the arrival of essential supplies for the mine. A ship carrying these supplies was unable to dock due to the actions of local boats, further complicating the operational challenges faced by First Quantum.
While the company has remained optimistic about a swift resolution to the situation, Panama’s highest court is set to examine the legality of the contract awarded to First Quantum beginning November 24.
As a result of the suspension, First Quantum plans to focus on maintaining the tailings pond, which is crucial for managing waste generated during mining operations. These tailings ponds require regular maintenance to mitigate environmental risks.
Overall, the temporary halt in production at Cobre Panama highlights the significant impact that protests and political challenges can have on the mining industry. It remains to be seen how the situation will unfold and the potential long-term consequences for both First Quantum and the government’s contract.