Protests Rock First Quantum: In a significant turn of events, First Quantum Minerals, a major player in the mining industry, faces disruptions at its Cobre Panama mine due to escalating protests that have effectively blocked coal supplies. The protests stem from opposition to the government’s recent contract with the mining giant, which has resulted in a clash between local communities and the authorities. As a response to the ongoing unrest, First Quantum has announced plans for maintenance at the Panama mine starting on Nov. 23, a move that will lead to the suspension of production until the supply chain can be restored.
Sources familiar with the matter, who requested anonymity as the information is not yet public, revealed that the blockade of coal supplies has left the Cobre Panama mine unable to operate without power. This has prompted the company to take the necessary measures to address the situation, with the hope that production can resume once the coal supplies are no longer impeded.
The impact of these developments has reverberated through financial markets, causing copper prices to reach a two-month high. However, the stock of First Quantum Minerals experienced a decline of as much as 5.7%, reflecting concerns and uncertainties surrounding the mining operations. Despite the setback in stock performance, the broader Canadian index witnessed a modest rise of 0.4%.
Protests have gained momentum since the signing of a new contract between the government and First Quantum on Oct. 20, pertaining to the Cobre Panama concession. This particular mining operation holds significance, contributing 1% to global copper production and accounting for 5% of Panama’s gross domestic product. The tensions have escalated to the point where a ship carrying essential supplies for the mine was unable to dock due to local boats blocking access to the key port.
A spokesperson for First Quantum Minerals declined to provide specific comments on the Nov. 23 suspension but acknowledged the temporary halt in production due to what was described as an “illegal blockade.” The company expressed optimism, stating that production could quickly ramp up once the port reopens.
Also Read: Panama Copper Mine Dispute Shakes Global Markets
Earlier on Monday, the mining company announced a further ramping down of operations at Cobre Panama, reducing it to one remaining ore processing train. The company expects to exhaust supplies for the on-site power plant during the week commencing Nov. 20. In the interim, the focus will be on maintaining the tailings pond, a critical aspect of mining waste management that requires continuous attention and care.
The legal landscape surrounding the contract between First Quantum and the Panamanian government is set to unfold further. Panama’s top court is scheduled to hear arguments on the contract’s legality starting from Nov. 24, as indicated in the company’s statement.
This contract has faced numerous legal challenges, with protesters claiming favoritism toward the mining company and alleging corrupt practices in the approval process. The protests have evolved into a broader anti-government movement, reflecting concerns not only about the perceived benefits given to the mining giant but also about the environmental impact of the massive mining operation.
Over the weekend, these protests garnered attention and support from Hollywood actor Leonardo Di Caprio, who shared a video from an environmental group calling for the Supreme Court to cancel the contract awarded to First Quantum.
Cobre Panama, a significant contributor to the company’s financial performance, produced 112,734 tonnes of copper in the third quarter, contributing $930 million to the overall Q3 revenue of $2.02 billion. The fate of the mining operation hangs in the balance as legal battles, environmental concerns, and public sentiments intertwine, shaping the future trajectory of First Quantum Minerals in Panama.
Our Reader’s Queries
What is the first quantum minerals controversy?
Panama has been rocked by protests as thousands of people have taken to the streets to voice their opposition to the government’s decision to extend First Quantum’s mining license. The move has caused widespread anger due to the 20-year extension granted to the company’s assets. Additionally, the government has received a larger share of revenue, which has only added fuel to the fire. The situation remains tense as protesters continue to demand that the decision be reversed.
Who owns First Quantum?
Barrick has reportedly reached out to several shareholders of First Quantum, including China’s Jiangxi Copper Co., which owns 18% of the company. The Capital Group is currently the largest shareholder with a 22% stake, according to Bloomberg data.
How much did the Cobre Panama mine cost?
In 2019, Cobre Panama commenced production after a massive investment of US$6.8-billion by the company. This colossal mine is the largest one owned by the company.
What is the origin of first quantum minerals?
First Quantum, originally known as Xenium Resources, was established in 1983. Over the years, it underwent several name changes, including Zeal Capital, First Quantum Ventures, and finally, First Quantum Minerals in 1996. The company’s initial major venture was the acquisition of the Bwana Mkubwa mine in Zambia in the same year.