Protests force First Quantum to reduce copper ore processing at Panama mine
Reuters
Published Nov 13, 2023 12:53PM ET
Updated Nov 13, 2023 04:06PM ET
By Sourasis Bose and Valentine Hilaire
(Reuters) -First Quantum (NASDAQ:QMCO) Minerals has reduced ore processing at its Cobre Panama mine as protests against the project block port access, the Canadian miner said on Monday, the first sign that output at one of the world's biggest copper mines could at be risk.
The disruption was caused by an "illegal blockade" of small boats at the mine's Punta Rincon port, the company said in a statement. The delivery of supplies for the mine's on-site power generation plant had been affected, it added.
The protests began after the Panamanian government and First Quantum signed a new contract on Oct. 20 for Cobre Panama, which contributes 1% to global copper production and 5% to Panama's gross domestic product. The demonstrators say the new terms are too generous to First Quantum and allege corrupt practices in its approval. The company has denied the allegations.
The contested contract provides First Quantum a 20-year mining right with an option to extend for another 20 years, in return for $375 million in annual revenue to Panama.
The contract has faced numerous legal challenges and Panama's top court will now decide whether to revoke it. A Reuters survey earlier in November found that a majority of lawyers believe that the court would likely revoke the contract.
The dispute has wiped out about 43% of First Quantum's market value, or about C$8.4 billion ($6.1 billion). The stock was down 2.8% on Monday afternoon.
A company spokesperson said there were about 3,000 workers at the mine on Monday, compared to the usual average of 4,000.
A reduction of ore processing could potentially impact about 2% of Panama's national workforce, the company said, adding that two ore processing trains remain operational.
The mine would need to reduce the purchase of supplies and services that are equivalent to $20 million in weekly revenues for more than 2,000 Panamanian companies if the stoppages continue, the company added.
($1 = 1.3788 Canadian dollars)
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Written By: Reuters
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