First Quantum willing to work with next Panama govt to resolve copper mine challenges

Canada’s First Quantum Minerals said it is willing to work with the next Panamanian government, which will be elected this Sunday, to resolve the issues facing its flagship copper mine. 

Some 3mn Panamanians will vote on May 5 for a new president, who will take office in early July, along with legislators and local authorities.

First Quantum suspended its Cobre Panamá mine after the country’s supreme court ruled at the end of November that the operating contract was unconstitutional amid massive protests against the operation.

After the ruling, authorities ordered the closure of the open pit mine, although the company and local mining chamber Camipa argue that the supreme court's decision does not stipulate that Cobre Panamá must be permanently shuttered.

“With regard to the election, we certainly… want to see a strong democratic process. We will work with whichever party is successful and whoever the successful presidential candidate is,” First Quantum CEO Tristan Pascall said during the company’s Q1 earnings call.

“And the context around that will be to meet the challenges around the mine, but the challenges for the country as well,” Pascall added, saying the company will approach those conversations with humility and work to resolve the situation to the benefit of the people of Panama. 

The Toronto-based company believes it will be able to secure the permit to remove the copper already extracted from the mine after Sunday’s election.

Approximately 121,000t of copper concentrates remain at Rincón port. The company said the attorney general advised it on January 29 that ore extracted through mining concessions granted in accordance with the mining code belong to the concessionaire. The shipment of the concentrate is included in the preservation and safe management (P&SM) plan that is being carried out by the miner.

“In regards to the concentrate, the 121,000t sitting at the port, in terms of the timetable for when that will get out, we note the minister of commerce's recent comments that they are looking closely at the P&SM plan, and he made the comment that he would like to see that approved before the election,” Pascall said.

“Obviously, it's in the context of election politics and the strong debates around that. So, on the balance of probability, it probably spills over after the election. We'll just have to wait and see as to what the timing is there,” he added. 

The miner said in its Q1 report that, excluding one-time severance charges for employees, the costs for the P&SM plan in the quarter were approximately US$20mn a month, which included labor, maintenance spares, contractor services, electricity and other general expenses. 

For the remainder of the year, First Quantum expects P&SM expenses to be US$15-US$20mn a month, depending on the level of environmental stability and asset integrity programs.

Cobre Panamá is in litigation over the supreme court ruling and President Laurentino Cortizo’s order to close the mine.

“In protecting our investment in Panama, we continue to move forward with our two arbitration proceedings, that being the Canada Panama Free Trade Agreement and the second one the arbitration clause of the refreshed concession contract,” the CEO said.

“However, as we have consistently stated, arbitration is not our preferred outcome and we remain committed to Panama and being part of a long-term solution that delivers the best outcome for the country and the people of Panama,” Pascall said.

While a new government could change the mine's fate, most Panamanians appear to continue to oppose mining.

Cobre Panamá produced 330,863t of copper in 2023, down 5.6% on 2022, in addition to some gold. It did not produce any copper or gold in Q1.