First Quantum warns of “catastrophic” results after mine closure in Panama

Panama’s decision to close the giant copper mine of the Canadian First Quantum Minerals Ltd ignores the rights of workers and does not consider the financial, social and environmental damages “catastrophic” which will cause its closure, the mining company warned.

In a statement released Wednesday, the company said it remains open to a “constructive and transparent dialogue” and that he will seek clarification on a Supreme Court ruling that declared his mining license unconstitutional.

Shares of the Canadian copper producer fell 11% in Toronto to the lowest price since July 2020 after the Government of Panama said it will close the mine. The decision dashes hopes that the company can reach a new agreement to keep the facility operating.

The company said that the court decision does not take into account a “planned closure” that it would take five to 10 years and that a premature closure of the Cobre Panama water treatment plant could harm water quality.

“To ensure environmental protection against an unplanned closure, similar schedules and actions must be observed regarding environmental, economic, labor, social and legal considerations.”the company said in the statement.

The decision does not considerthe breakdown of international free trade agreements or the harmful risk for Panama as an investment destination”the company said.

First Quantum said it will seek clarification on the ruling and “reserves the right to protect its investment, prioritize the safety and well-being of its employees”.

Closing Cobre Panamá would eliminate by far First Quantum’s largest producing asset, which accounts for about half of the company’s expected copper production this year. The miner has already lost more than half its market value since the protests began last month.

Suspend contracts

First Quantum suspended the contracts of 7,000 employees at its main copper mine in Panama, according to an internal memo to staff seen by Reuters on Wednesday.

The leader of the union that represents workers at the Cobre Panamá mine, Michael Camacho, confirmed the content of the document.

The Canadian mining company also said yesterday that it reserves all its legal rights to protect its investment in the copper mine in Panama, where the Supreme Court set its position on Tuesday in an expected ruling after weeks of protests by the population against the contract, which will lead to the closure of the Cobre Panama mine.

In a statement, Cobre Panamá, operated by Minera Panamá, a subsidiary of First Quantum, said that it has invested US$10,000 million in the country and that the Court’s decision “does not consider the catastrophic financial, social and environmental damage that this will cause.” .

After the Court’s announcement, the president of Panama, Laurentino Cortizo, said in a message to the Nation that once he officially receives the Court’s ruling, the transition process will begin “for an orderly and safe closure of the mine”.

With information from Bloomberg and Reuters