Canada’s First Quantum Minerals will face production disruption at its Cobre Panama mine due to protests against a government contract, according to sources familiar with the matter. The mine’s coal supplies have been blocked, forcing the company to carry out maintenance from November 23. The suspension of production will continue until the resumption of coal supplies, as the mine relies on power to operate.
Protests have escalated following the signing of a new contract between the government and First Quantum on October 20. The Cobre Panama mine is a significant contributor to Panama’s gross domestic product and 1% of global copper production. Demonstrators have impeded access to the key port, preventing a ship carrying necessary supplies from docking.
First Quantum Minerals confirmed the temporary halt in production but expressed confidence in quickly ramping up production once the blockade is lifted. The company also highlighted the importance of properly maintaining the tailings pond during this disruption. Tailings ponds are essential for storing mining waste and require continuous upkeep to prevent environmental issues.
In an effort to challenge the legality of the contract, Panama’s highest court will begin hearings on November 24. The uncertainty surrounding the contract has had a significant impact on First Quantum’s stock, which fell by as much as 5.7% following news of the mine’s suspension. The stock has already experienced a decline of 48% since the government announced a potential referendum to determine the contract’s future. This decline has resulted in a market value loss of approximately C$9.38 billion ($6.8 billion).
As the situation develops, the protests and legal battle over the contract will continue to impact First Quantum Minerals’ operations and investment stability in the region.
1. Why are there protests against First Quantum Minerals in Panama?
Demonstrators are protesting against a new contract signed between the Panama government and First Quantum Minerals for the operation of the Cobre Panama mine. The protests are based on concerns regarding the legality and terms of the contract.
2. How long will production at the Cobre Panama mine be halted?
The suspension of production at the Cobre Panama mine will continue until the blockade on coal supplies is lifted. The exact duration is uncertain.
3. What impact does the Cobre Panama mine have on Panama’s economy?
The Cobre Panama mine contributes 5% to Panama’s gross domestic product and accounts for 1% of global copper production. Its suspension will have significant economic implications for the country.
4. How has First Quantum Minerals’ stock been affected?
First Quantum Minerals’ stock has experienced a decline of approximately 48% since the announcement of a potential referendum to determine the future of the contract. This decline has resulted in a market value loss of approximately C$9.38 billion ($6.8 billion).
5. What are tailings ponds?
Tailings ponds are reservoirs used to store waste generated from mining operations, including materials such as rock, sand, and chemicals. Proper maintenance of tailings ponds is crucial to prevent environmental contamination.