First Quantum Awaits General Elections In May, Maintains Hope For Cobre Copper Mine

The Panamanian government’s decision to close Toronto-based First Quantum Minerals' FQVLF Cobre Panama copper mine in December marked a challenging period for the company amidst ongoing issues in Central America.

Panama and First Quantum initially negotiated a new contract for the mine’s operation. Despite reaching an agreement, environmental concerns sparked widespread protests.

The nation’s Supreme Court subsequently annulled the deal and closed the mine.

Per Bloomberg's report, on Monday, Panama's electoral court stated it can't organize a referendum regarding the mine.

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"At this moment, there are no conditions to organize the intended popular consultation," the electoral authority said, citing logistics and legal reasons.

Still, according to CEO Tristan Pascall, recent developments offer a glimmer of hope for First Quantum. The intensity of protests has diminished, potentially paving the way for discussions on the mining sector’s contribution to Panama’s economy, especially as the country prepares for general elections scheduled for May 5.

Supporters of the mine insist that Cobre Panama has a net-zero environmental impact and won’t be taking water from the Panama Canal. First Quantum is also expected to clear 5,900 hectares of forest space, but is committed to reforesting 11,175 hectares.

Meanwhile, the company has received support from the Canadian government.

“First Quantum Mineral is a really important Canadian company,” Trade Minister Mary Ng recently stated, per Reuter's report.

“I’ve met with them, I continue to meet with them, and really, I’m really looking to supporting the Canadian company … as best as we can,” Ng said.

The government has been making efforts to prop up one of the largest companies in the country's strategically important sector, Ng added.

 As discussions unfold about the economic repercussions of the mine’s closure, former Panama finance minister Dulcidio De La Guardia expressed concerns over the significant impact on the country’s growth rate, expecting a substantial slowdown compared to previous years.

Cobre Panama is a vital asset for First Quantum but also plays a noteworthy role in Panama's economy. It contributes approximately five percent to the country’s GDP. It also employs over 7,000 individuals directly, with an additional 33,000 dependent on the mine’s operations.

While some anticipate a possible reactivation of the mine following statements from presidential candidates, legal hurdles remain significant. The Environmental Advocacy Center of Panama (CIAM), which has long protested against mining in the country, emphasized ongoing concerns about environmental and social viability.

Although the biggest, Cobre Panama isn't the only hurdle First Quantum recently faced. Slumping nickel prices prompted the company to temporarily halt mining operations in Australia. Management is considering further cost-cutting and selling non-strategic assets.

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