A top official of Canadian miner First Quantum Minerals FM-T told a Scotiabank conference on Wednesday it is too early and likely too challenging to consider bringing a new partner into its flagship Panama project due to the situation in the country.
The future of First Quantum’s Cobre Panama mine, which accounts for about 1 per cent of global copper output, has become uncertain after Panama President Laurentino Cortizo on Tuesday ordered the closing of the mine. This followed the top court’s decision to declare First Quantum’s contract unconstitutional.
Bringing a new investor who could help diversify the risk and fortify First Quantum’s balance sheet has been suggested as a likely solution.
The comments were made by First Quantum Minerals CFO Ryan MacWilliam at an annual mining conference organized by Scotiabank, according to a note prepared by the Canadian bank seen by Reuters.
First Quantum’s Panama future in jeopardy after top court says mine contract unconstitutional
When asked for comments, First Quantum referred to the Scotiabank note. Scotiabank was not available for an immediate comment.
The comments are the first by the company on the future of the Cobre Panama mine’s ownership since Tuesday’s court ruling.
Panama has seen unprecedented public protests after the government signed a new contract with First Quantum for its Cobre Panama mine. The protesters choked supplies to the mine, forcing First Quantum to suspend the mine last week.
MacWilliam told the conference that given the events in Panama, it remains unclear when Cobre Panama will be able to resume operations.
Separately, the company said in a statement on Wednesday it was interested in pursuing dialog with the Panama government, and warned of environmental damage if the mine were not shut in an orderly manner.
The protests have wiped out about $11-billion from First Quantum’s market value. On Wednesday, the stock was down about 10 per cent.
China’s Jiangxi Copper Co Ltd is First Quantum’s biggest shareholder.
The mine closure also has consequences for the Central American nation, as Cobre Panama contributes about 5% to Panama’s economy and supports about 40,000 jobs.
First Quantum, which has spent over $10-billion to develop the mine, has launched two separate tracks of international arbitration to protect its assets, the CFO said, which accounted for about 46 per cent of its third quarter earnings.