El Salvador lawmakers overturn mining ban Bukele called absurd
El Salvador became the first country in the world to ban all forms of metals mining in 2017.
First Quantum Minerals (TSX: FM) says the law governing the mining concession for its Cobre Panama copper mine was passed and published in the Official Gazette of Panama on Oct. 20. Thus ends a period of uncertainty that began last year for the company.
The Panamanian government last December ordered First Quantum to halt operations at Cobre Panama amid disagreements during contract negotiations, which later broke down. Talks eventually resumed and the parties reached an agreement in March. First Quantum had estimated that suspensions at the mine which lasted for more than two months caused up to $8 million in losses per day.
The new contract guarantees a minimum annual income of $375 million to the government and will be effective for 20 years. An option to renew is included.
“We are pleased that the revised contract establishes the basis for a renewed long-term relationship between Panama and First Quantum,” said company CEO Tristan Pascall in a statement.
“This will provide for both continued investment in the mine and for its important contribution to Panama and its people. We are committed to the obligations of the contract and to responsible stewardship of the Cobre Panamá mine, including a continued positive impact on our workforce, the surrounding communities and the environment.”
The Cobre Panama mine began commercial production in 2019. At full capacity it can process 85 million tonnes of ore annually and produce more than 300,000 tonnes (661.4 million lb.) of copper each year. Gold, silver, and molybdenum are also recovered. Currently, the complex includes two open pit mines, a processing plant, two 150-MW power stations, and a port.
First Quantum recently finished commissioning the CP100 expansion, which will take mill throughput to 100 million tonnes annually by the end of this year. Annual output will also rise to over 400,000 tonnes (881.8 million lb.) of copper. The expansion included new primary screens, bypass bins, and bypass feeders; the addition of a sixth ball mill; and process water upgrades.
An additional 64 MW of power has been added from 100% renewable sources.
First Quantum shares were down 1.8% to C$29.43 on Monday, valuing the company at C$20.4 billion.
