Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
First Quantum Minerals’ (TSX: FM) subsidiary issued a media statement this weekend requesting proper access to the Cobre Panamá copper mine to maintain the environmental stability of the site located to the north of the Central American country, 20 kilometres from the Caribbean Sea.
In the brief, Minera Panamá notes that, following an order by Panama’s Trade and Industry Ministry (MICI) to end operations, work at Cobre Panamá has ceased but the mine remains under care and maintenance. However, ongoing blockades of the access roads to both the mine and the Punta Rincón international port have prevented the delivery of equipment and supplies necessary to fulfill what the miner calls ‘environmental stability and asset integrity measures.’
“Without these supplies, site environmental management will soon become increasingly difficult and could result in potentially significant environmental effects,” the communiqué states.
Minera Panamá noted that in its December 6 order to cease operations, the Trade and Industry Ministry demanded that the company take the necessary measures to ensure that the facilities remained safe and protected to avoid environmental damage, as well as to prevent other losses or damages in the mining area.
“For the company to maintain compliance and avoid environmental damage, the access road to the mine and the international port must be urgently cleared and respect for the law and order must be restored,” the statement reads. “The company asks for assistance from authorities, in accordance with national regulations and international treaties, to enable the company to comply with the above request for which it is crucial to receive critical supplies.”
Following months of protests against the contract Minera Panamá and the Panamanian government signed in October, which would allow Cobre Panamá to keep operating for the next 20 years, Panama’s Supreme Court ruled last month that First Quantum’s contract to operate the mine was unconstitutional.
After the ruling was issued and published in the Official Gazette, and the MICI issued the order to stop operations, First Quantum requested the authorization to lay off more than 4,000 of its employees. Last month, the miner suspended the contracts of 7,000 staff at the mine.
Cobre Panamá, in production since 2019, accounts for about 5% of Panama’s gross domestic product and makes up 75% of its exports of goods.
The mine generated 112,734 tonnes of copper in the third quarter of 2023, contributing $930 million to First Quantum’s overall third-quarter revenue of $2.02 billion.
First Quantum has asked the Miami-based International Court of Arbitration to protect its rights under the 2023 concession agreement that the government of Panama agreed to earlier this year, as well as the Canada-Panama Free Trade Agreement.
Comments
Laura
They can go to hell, they report nothing