First Quantum Mineral ordered to stop its operation

Panama’s Supreme Court

After Panama’s Supreme Court of Justice has ruled that the mining contract for the Cobre Panama copper mine is unconstitutional the First Quantum Minerals has been asked by Panama to stop their operation. The decision of the Supreme Court has ended the six weeks of protests against the First Quantum Minerals contract which was at first triggered by the government’s renewal of its contract with the company. Among others protesters blocked the Pan-American highway and other key roads, causing fuel and food shortages in some regions. The contract which was at first renewed has given the company the right for 20 years of mining operation with an option to extend the rights for the next 20 years in return for a $375 million annual revenue fee.

Transition has started

Panama’s President Laurentino Cortizo Cohen has stated that he would “abide by the decision of the Supreme Court”. He has further added that “the transition process for the orderly and safe closure of the mine” has started.

Concerns

Minera Panama, First Quantum Minerals’s local unit has announced that concerning the ruling of the Supreme Court of Justice, it reiterates that transparency and compliance with the laws have always been fundamental for the development of its operations and reiterates the interest in promoting dialogue to find solutions. Moreover, the company believes some key questions need to be answered among others how does the Government plan to prevent the arrival of illegal miners, what are the plans of the Ministry of Labor for the support, training, and continuous development of the 40,000 people employed directly and indirectly by Cobre Panamá in the future.

Cobre Panama

The company has indicated that Cobre Panama has more than 7,000 direct employees and 33,000 contractors and suppliers which will be affected by this decision.

First Quantum announced that it would comment further once it studied the details of the ruling.

Cobre Panama copper mine began producing copper in 2019. It was providing around 1% of the global copper output. According to government data, the copper operation in Cobre Panama accounted for 3.5% of Panama’s GDP in 2021.