First Quantum Minerals Ltd., a major player in global copper production, is navigating a challenging situation at its Cobre Panama mine, amid escalating protests following a new contract with the Panamanian government. The contract, signed on October 20, has significant economic implications, as the mine contributes 1% to global copper production and 5% to Panama’s GDP.
Tensions heightened when a supply ship for the mine was prevented from docking due to a blockade by local boats, as reported by the company last Friday. Despite the disruption, First Quantum declined to comment specifically on the suspension planned for November 23.
In a recent statement to Reuters, the company acknowledged the temporary production halt due to the blockade, expressing readiness to resume operations swiftly once access to the port is restored. As of Monday, First Quantum announced a scale-down in operations at the mine, with only one ore processing train remaining active. The company anticipates a shortage of supplies for its on-site power plant in the week starting November 20, focusing maintenance efforts on the tailings pond, which is essential for storing mining waste.
The legal validity of First Quantum’s contract is under scrutiny, with Panama’s top court set to review its legality starting November 24. The contract has been mired in controversy, facing legal challenges and protests alleging excessive favoritism towards the mining company and corrupt practices in its approval. These protests have evolved into a broader anti-government movement and criticism of the mine’s environmental impact.
Adding to the controversy, Hollywood actor Leonardo DiCaprio recently endorsed the protests against the mine, sharing a video from an environmental group calling for the Supreme Court to annul the contract with First Quantum.
Despite these challenges, Cobre Panama remains a significant asset for First Quantum, having produced 112,734 tonnes of copper in the third quarter and contributing $930 million to the company’s overall quarterly revenue of $2.02 billion.