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Saturday, Dec 2, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


First Quantum may halt Cobre Panama operations due to blockades at main port

The company is starting to ramp down operations at the mine to only one ore processing train

Cobre Panama operations ramping down amid protests
First Quantum Minerals Punta Rincon port. Photo via Ersi Group.

Canada´s largest copper producer First Quantum Minerals Ltd. (TSX: FM) may suspend operations at its subsidiary´s Cobre Panama copper mine if blockades continue to impede delivery of essential supplies.

The Vancouver-based miner said on Monday that it is starting to ramp down operations at the mine to only one ore processing train. The power plant is close to running out of supplies because of the blockades at its Punta Rincon port, where small boats and cohorts of protesters are impeding access.

If the blockades continue, the company will run out of supplies by the end of the week.

To meet its contractual obligations, Minera Panama made a tax and royalty payment last week of $567 million for the Dec. 2021-Oct. 2023 period. Last week, the union representing First Quantum workers said that it had reached an agreement to guarantee salaries despite the protests and blockades preventing them from working.

“The blockades put at risk the daily bread of some 7,000 workers who are also Panamanians who have not been able to return to our posts to make a living in a dignified way,” the union said in a statement. The mine contributes to 1 per cent of copper production worldwide and contributes 5 per cent to Panama´s gross domestic product.

Franco-Nevada (TSX: FNV) which has a deal with Minera Panama has also cut its guidance for the year in sight of the reduced operations. Its original guidance was 490,000 to 530,000 precious metal gold equivalent ounces (GEOs) and 640,000 to 700,000 total GEOs. Its revised guidance is now 480,000 to 500,000 precious metal GEOs and 620,000 to 640,000 total GEOs.

At its maximum operational capacity, the mine can process 85 million tonnes of ore annually, yielding over 300,000 tonnes of copper per year. The extraction process recovers gold, silver and molybdenum. The infrastructure of the complex comprises two open pit mines, a processing plant, two 150MW power stations and a port.

Read more: Two killed in blockade against controversial First Quantum Minerals Panama contract

Read more: Panama to hold referendum for revoking First Quantum Minerals copper mine contract

Leonardo Dicaprio joins anti-mine activist efforts, aims to create global awareness

Hollywood actor Leonardo Dicaprio posted a video via Instagram saying the mine is in the Bosque Donoso rainforest which is at the heart of the largest biological corridor in Mesoamerica and is a lifeline for many migratory species. The video was produced by the NGO Re:Wild and endorsed by the actor.

“[The area] is critical to the livelihoods and cultures of local and Indigenous communities, and is home to wildlife that includes macaws, tapirs, monkeys and jaguars. This activity would destroy the surrounding ecosystems, species and people,” said the movie star via social media.

“A global spotlight can help Panamanians win a critical victory for biodiversity and can pave the way for a more sustainable future.”

In October, the firm and the government of Panama reached an agreement that would allow the open pit mine run by Minera Panama to operate for 20 more years. After the agreement was enacted into law, protests erupted across the country.

Protesters argue that the mine poses dangers to the environment and that the new terms are “too generous”. In sight of the protests, President Laurentino Cortizo Cohen announced a referendum to determine whether the contract should be revoked, scheduled for December 17.

The blockades have already taken the lives of people including two protesters being shot by a frustrated driver during a highway blockade.

“First Quantum wishes to reiterate its willingness to open new forums of dialogue to address the concerns of diverse sectors of society, in order to create lasting relationships based on respect, cordiality, understanding, and mutual benefit,” said the company.

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