Impossible for Panama’s next government to ignore minings contribution to economy, says First Quantum CEO

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By LatAm Reports Editorial Team

The Donoso mine contributed 5% of Panama’s gross domestic product and generated 7,000 direct jobs, according to data released by the company.

The executive director of First Quantum, Tristán Pascall, revealed that the Canadian company would be looking for a “sensible solution” with the Panamanian government after the closure of the Donoso mine.

Although he considers that the company’s case is “extremely solid”, referring to the legal dispute after being left without a firm contract, Pascall told the Financial Post that there are two arbitration claims that the mining company filed against Panama, after the ruling of unconstitutionality. of the Supreme Court of Justice of the mining contract for violating 25 articles of the Constitution of Panama.

In addition to the arbitrations filed by the Canadian mining company, Korean media have reported that the state company Korea Mine Rehabilitation and Mineral Resources Corp. (Komir) is preparing to file a lawsuit against Panama for $747 million for the closure of the Cobre Panamá mine, in the province of Colón, in which it has a 10% stake.

The Korea Economic Daily newspaper reported that Komir is seeking compensation through an investor-state dispute settlement mechanism known as international arbitration (SDS).

After the stoppage of operations at the Donoso mine, which contributed 40% of the Canadian mining company’s income and which until November 2023 generated 330 thousand tons of copper, First Quantum has announced that it is exploring the possibility of some of its projects. smaller ones, including a mine in Spain. It is also studying the possibility of putting new shares into circulation, but this package would only be available to its current shareholders.

Pascall also mentioned that the unrest shown by the population against the mining issue has decreased in recent months, opening a door to discuss the positive impact that the activity has on the Panamanian economy.

It is impossible for the next government of Panama to ignore the contribution of the mining sector to the country’s economy, said the top executive director of First Quantum.

Reports from the company and the Government have indicated that the Donoso mine contributed 5% of the country’s gross domestic product with the generation of 7 thousand jobs and other contributions to the economy.

Pascall indicated that the company is focused on the maintenance and care plan that must be carried out at the mine while “the definitive plan” of the project is finalized, located in a concession of 13 thousand hectares in the mountains of the districts of Donoso and Omar Torrijos. in the province of Colón.

Minera Panamá, a subsidiary of First Quantum, confirmed last week to La Prensa that they have not yet received a response to the draft delivered to the Ministry of Commerce, Industries and Agriculture of Panama to execute the closure plan that would have a cost close to 20 million of dollars.

Denies interest

The CEO of Barrick Gold Corp, Mark Bristow, one of the main gold producers and seeking to increase its participation in the copper market, told Reuters that the company was not interested at the moment in acquiring any of the assets. by First Quantum.

On Wednesday, when asked if the company would consider bidding for any of First Quantum Minerals’ assets, the executive said that once First Quantum’s outlook becomes clearer, he could evaluate the company’s options in the case. In the meantime, assured that Barrick Gold Corp is not participating in negotiations with any of the shareholders of the Canadian company that has lost more than half of its market value after the closure of the copper mine in Panama.

Although First Quantum’s share price has recovered in recent days, it is still 60% below the $29.98 it registered on October 20, 2023, the day the Government of Laurentino Cortizo published in the Official Gazette Law 406, which contained the mining contract that would extend the presence of the Canadian mining company in Donoso for up to 40 years. On February 15, the share price closed at $8.83 and one million 42 shares were exchanged. First Quantum’s market capitalization reaches six billion dollars, after collapsing following the closure of the mine in Panama.

This article has been translated from the original which first appeared in Prensa