Panama has formally requested First Quantum Minerals to halt its visitor program at the contentious Cobre Panama mine, citing a lack of consultation with the government before launching the initiative. The Canadian mining company’s community relations program aimed at providing the Panamanian society with an on-site experience has stirred controversy, underscoring ongoing disagreements over the future of the major copper mine.
According to Panama’s Trade Minister, Jorge Rivera, the ministry emphasized the necessity for prior consultation with the appropriate government entity before implementing such activities. First Quantum has yet to respond to the government’s request for comment on the matter.
The dispute between the Panama government and First Quantum revolves around the operations and future trajectory of the Cobre Panama mine, a significant copper mining project in the region. The Central American nation had previously ordered the temporary closure of the mine following environmental concerns and public protests late last year.
First Quantum’s introduction of the community relations program was based on findings from a Gallup opinion poll indicating public interest in visiting the mine. However, the government’s response highlights the importance of engaging in dialogue and seeking approval for such initiatives to ensure alignment with national regulations and policies.
The suspension of operations at Cobre Panama has had significant economic implications, as the mine’s activity previously contributed around 5% to Panama’s GDP. The closure is projected to impact the country’s GDP growth in 2024, slowing it down from 7.5% to 2.5%, as estimated by the International Monetary Fund.
With Cobre Panama accounting for a substantial portion of First Quantum’s revenue in 2023, the company has faced financial challenges following the protests and subsequent suspension of operations. Seeking resolution through international arbitration, First Quantum is pursuing a $20 billion claim against the Panama government.
The market response to these developments was reflected in a 3.8% decline in First Quantum shares on Thursday, contrasting with a 0.9% rise in Canada’s benchmark stock index.